Small Footprints, Big Impact: Space Efficiency without Compromising Retail Experience

From Macy’s to Ikea to Best Buy to CVS, a wide variety of retailers are using small-format stores to engage and serve diverse and evolving shoppers in non-traditional locations.

And for good reason. Smaller footprints allow big box, national retailers to penetrate into more densely populated or downtown areas, expanding a brand’s reach.

But how do retailers developing smaller-format concepts ensure they use space efficiently without compromising the customer experience?

We have some thoughts.

Customer-centric design, optimized layout

Successful branded environments always start with strategic design that leans into innovation and purposefulness.

Smaller stores require efficient use of every square foot — horizontal and vertical. So, rethink floorplans and use modular fixtures, vertical shelving and multi-functional displays that highlight top categories and simplify wayfinding.

Space optimization includes many nuances, but it starts with fostering easy store navigation and curated product visibility. It’s possible to combine pleasing aesthetics with practical solutions for operational and associate challenges. These compact layouts also enable faster trips and an intuitive shopping journey, which is attractive to busy, convenience-driven shoppers.

Reliant located inside a Walmart. Miller Zell redesigned the small-format space with detailed attention to functional engagement through signage, fixtures, furniture, lighting, space planning and color choices. 

Smart zoning — grouping related products and integrating impulse-purchase areas near checkout — helps customers find what they need faster and increases basket size. For example, a smaller electronics section can feature top-selling gadgets, with touchscreen displays offering specs, reviews and in-store pickup scheduling.

Design also intersects with digital integration and localization. A plan to leverage in-store analytics should be intertwined with store design, helping to provide valuable data that supports informed decisions about what products to stock and how to present them. Continual gathering of insights into customer behavior allows you to optimize inventory and enhance the customer experience.

When customers can’t find exactly what they want, then digital kiosks or signage with QR codes can connect customers to the full online assortment for delivery or pickup. This blend of physical and digital fulfillment allows retailers to reduce square footage while still meeting broad product needs.

Integrate BOPIS into small-format experience…

No surprise that digital integration is now critical for all retail store development, small format included. And BOPIS will be a key part of that for many retailers.

BOPIS requires a robust order management system (OMS) that integrates real-time inventory across all stores (no matter the footprint) and warehouses. It also needs a brick-and-mortar physical experience that streamlines pickup logistics, whether customers never leave their cars or prefer to go inside your store.

Walmart located in Elm Springs, Arkansas. Customer pickup area in a parking lot located outside of Walmart. Employees are seen loading pickup bags into the customers car.

Obviously, smaller formats mean smaller spaces for BOPIS areas. That might mean curbside pickup is challenging or even not doable in high-traffic, urban areas, or that in-store spaces can’t support self-service lockers or multiple express checkout lanes.

Whatever the limitations, clearly branded, dedicated BOPIS areas that minimize customer wait times and wayfinding uncertainty upon parking lot arrival and/or store entry boost customer experiences and foster loyalty.

… and continue with technology-enabled services

To maintain a high level of service with a reduced number of associates on hand, many small-format stores lean into an upgraded digital experience, which also can provide learnings for your entire store fleet.

Self-service checkouts, mobile POS systems and AI-driven customer assistance are tools that provide support for associate, who can be cross-trained and empowered with tablets to handle sales, inventory checks and customer help on the spot.

Integrating apps with in-store experiences (e.g., real-time wayfinding, scan-and-go or personalized promotions) boosts customer service even in stores with minimal physical space and fewer associates on the floor.

Embracing curation, localization and flexibility

Instead of offering every single SKU available, smaller formats present a carefully selected assortment tailored to local demographics, purchasing patterns and immediate needs.

Connecting to local sports teams or institutions? Quick switches from celebrating summer to back-to-school to holiday décor? Highlighting home goods that make sense for big city apartment living?

Yep. Smaller formats make merchandising and marketing agility both easier and more important. It’s a matter of knowing your potential customers and giving them the experience they want and need, providing both convenience and surprise and delight.

This localized approach driven by strategic insights ensures that despite a reduced physical footprint, your small-format stores are not cookie-cutter creations but branded spaces that obsessively pursue relevance to and engagement with your targeted customers.

This is not about downsizing. It’s about “rightsizing” and optimizing space efficiency without compromising the customer experience.

When executed effectively, it will distinguish your brand versus your competition.