Change or perish : retailers go for right sizing strategies

Retail stores today have become a part of the customer's shopping experience. The crucial factor influencing the customer's feelings is the retail space itself. Earlier, retailers developed their own models based on their retail expansion or contraction strategies. Decisions were mainly influenced by their belief on 'increase in the floor space results in the increase in sales volume'. Their chase for space consequently ended up in a distortion. Retailers see themselves in a 'Catch-22' situation. Customers prefer small stores while they demand variety merchandise, good prices, and convenience in shopping which chain stores or big malls offer.

Getting the appropriate size and shape of the store portfolio needs an understanding of how an ideal retail footprint should look. This footprint tends to change frequently, in the consumer driven market. Retailers need to be flexible enough to adapt to the changes and determine how to migrate to the new environment. Considering of expanding the present retail store size is also constrained by the traditional lease structures.

Reconfiguring and improving the efficiency of the retail store is a major makeover for a retail outlet. With the drastically changing business environment, retailers need to incessantly test and change the size, shape, and purpose of their outlets to make sure they are in par with the changing retail landscape.