Small Is Back In Style
I read with interest a Toronto Star article asking whether the era of the big-box retailer is over. The large warehouse-style, self-serve stores were a product of the baby boom generation as a new generation married, took out mortgages, raised children and shopped for all their household needs.
Whether it was bedding or consumer electronics, there were big-box stores in each category waiting to fulfill consumers’ dreams at a suburban location with free parking. These stores were able to cut prices by negotiating bulk discounts and eliminating the middleman.
Well, apparently the format has reached the saturation point, industry experts say. In home improvement renovation alone, there are now nearly 280 superstores, or one for every 26,000 families. Small is back in style. Partly due to changing demographics and the current economic downturn, but mostly because the market is saturated, many big-box retailers are downsizing to smaller formats or opening fewer stores of any size. According to the latest quarterly report by the online industry trade publication, Hardlines, the home improvement industry will open just 10 big-box stores this year, from an average of 18.4 new stores a year for the past 15 years.
Twenty-five years ago, the baby boomer wanted to shop at big stores. The new generation has different needs. Young people starting out don’t want to spend 35 minutes walking around a 100,000 square-foot store looking for things the way their parents did. They want to get in and out fast and they value good service. In a tough economic environment, the focus will be more on the repair and renovation market, which can be served just as easily by a small independent store as it can be by a big-box store.
Whether we’re part of Gen X, Gen Y or a baby boomer, we all want good service and the biggest bang for our buck. Any retailers who can offer both to their customers will emerge as winners in this economic downturn.
