Retailers see smaller outlets as the next big thing.

Bigger is not always better. Just ask the biggest retailers in the country — and their customers.

Neng Yang, left, purchases a new phone at the Best Buy Mobile mini-store at Independence, Mo., with her brothers Cheng Yang and John Yang, right.

 Neng Yang, left, purchases a new phone at the Best Buy Mobile mini-store at Independence, Mo., with her brothers Cheng Yang and John Yang, right.
KANSAS CITY, Mo. — To Neng Yang, the Best Buy store in Independence, Mo., is just too overwhelming — so much so that she only shops there once a year, at the holidays.

So when she needed a new cellphone, she bypassed the 55,000-square-foot store with its many departments — appliances, big-screen TVs, computers, cameras, car audio, video and music. Instead, she stopped across the street at the Best Buy Mobile store.

The slimmed-down 850-square-foot sister store concentrates only on mobile devices.

“I ask about a thousand questions, and this is more personalized, more one-on-one attention,” said Yang of Blue Springs, Mo.

Yang bought a white Droid Razr, and her brother John Yang picked up a black one.

Bigger is not always better. Just ask the biggest retailers in the country — and their customers.

The recession and the growth of online shopping have conspired to cut chains down to size. One strategy they’ve employed has been to close underperforming stores. But Best Buy and an increasing number of companies are trying another strategy too — going smaller.

Among the retailers testing smaller concepts are Blockbuster, Ann Taylor, Gap, Kohl’s, Lowe’s and Sports Authority. RadioShack even is trying a “store-within-a-store” format in several OfficeMax stores in California.

Lower square footage makes for lower construction and remodeling costs, and that also tends to make them easier to finance. The smaller locations have less overhead costs and can be manned by fewer employees.

The small size also gives the chains more flexibility in locations, allowing them to squeeze into heavily developed urban centers, and compact spaces in airports, college campuses and strip centers. If the location isn’t successful, the chains can close the sites with less financial fallout.

“For a decade it was ‘build it and they will come,’ ” said Candace Corlett, president of WSL Strategic Retail in New York.

“It’s definitely a correction for retailers as well as restaurants, a direct result of consumers not having as much to spend on the extras. The strategy has to be to reduce your costs to offset less traffic. Usually that means less rent, shrinking retail and restaurants,” Corlett said.

Jeff Green, president of Jeff Green Partners, Phoenix-based real-estate consultants, has long criticized the “bigger is better” movement.

“They think the bigger they are the more exciting they are and that’s not necessarily the case, as Apple has proven,” Green said.

“Consumers like the smaller stores, like to be part of a ‘happening,’ and smaller stores have that feel.”

When retailers like Ann Taylor, Chico’s and the Gap opened larger stores, they didn’t necessarily see an equivalent rise in sales, if any rise at all, that would justify the added expense, Green said.

“Any retailer that is opening larger and larger stores, I question their long-term viability,” Green said. “Costco and Sam’s Club defy that theory. That’s because consumers really perceive them as great values and value trumps the inconvenience of size.”

One of the latest retailers to embrace small stores is Cabela’s. On Feb. 16, the outdoor-equipment and sporting-goods retailer said it would open its first Cabela’s Outpost Store this fall in Union Gap, just south of Yakima; up to three more are planned for next year.

The Outpost stores will be significantly smaller than traditional Cabela’s: about 40,000 square feet compared with, say, the 185,000-square-foot Cabela’s in Lacey, Thurston County.

Cabela’s also has plans to open an 110,000-square-foot store this year at Quil Ceda Village on the Tulalip Tribes Indian reservation. And it will target smaller markets — 250,000 people or less with a high concentration of them already Cabela’s customers.

Best Buy introduced its mobile locations in 2007 and there are about 260 nationwide, including the Independence Best Buy Mobile store, which opened in August. Best Buy has about 1,100 full-size stores.

“The customer wants a different shopping experience. We don’t work on commission, and we carry everybody,” said Kyle Cochran, manager of the Independence store, which is tucked between two specialty stores on the lower level of the Independence Center mall.

Still, consumers who have come to know a brand as a “category killer” might be confused by the new concept.

The Wal-Mart Neighborhood Stores are designed to provide shoppers with a quick, convenient stop for fresh produce, dairy items, and pharmacy products at low prices. The grocery stores are about 29,000 square feet compared with a 142,000-square-foot supercenter.

But some grocery store shoppers still expect to see the large selections of products Wal-Mart is known for.

Carolyn Shaw of Shawnee, Kan., was disappointed in the holiday selection at a Wal-Mart Neighborhood store earlier this month during a morning stop in a snowstorm.

“They didn’t have many Valentine’s items,” Shaw said. “Now I’ll have to go back out this afternoon to a bigger Wal-Mart.”

Stores Demand Mannequins With Personality

One size fits all no longer applies to mannequins.

With retailers fighting for customers in the sluggish economic recovery, the generic white, hairless, skinny mannequin is being pushed aside by provocative alternatives that entice shoppers with muscles, unusual poses, famous faces and lifelike bodies.

“The customer shops from the mannequin,” said Jenny Ming, chief executive of the youth retailer Charlotte Russe, where poses for new mannequins are drawn from red-carpet celebrity pictures, and feature pierced ears, articulated fingers for rings and flexed feet for high heels. “The No. 1 reason our customers come in is because they see something they like.”

The Disney Stores chain has added little-boy figurines that fly from the ceiling and little-girl ones that curtsey. Nike has made its mannequins taller, and added about 35 athletic poses. Armani Exchange has ordered models that will lie down to help shoppers imagine wearing lingerie. A new accessories-only store by Guess features glossy black mannequins in model-like poses on an actual runway, while Ralph Lauren’s new women’s store in Manhattan commissioned mannequins with the face of the model Yasmin Le Bon.

It is all part of a new appreciation for old-fashioned window dressing. During the 1990s and early 2000s, many stores cut costs by hiring inexperienced workers to outfit their mannequins, and generic was best as the dummies needed to be dummy-proof. But with shoppers getting increasingly persnickety, retailers are expecting their store displays to serve as “come on in” advertising, with the made-to-order mannequins sending a very specific message.

“They personify their brand with their mannequin statements, and they’re looking for something a little more customized or unique,” said Peter Huston, brand president at Fusion Specialties, a mannequin company in Colorado whose sales, almost all of custom mannequins, rose 48 percent last year.

One of Fusion’s customers is Athleta, the sportswear company owned by Gap Inc. It commissioned mannequins based on a catalog model, Danielle Halverson, a track-and-field athlete training for the Olympics.

Fusion Specialties digitally scanned Ms. Halverson in stationary and action sequences. Then, over about two weeks, seven sculptors created clay renderings of the 3-D digital scans that “hand-etched her from a tiny pile of clay down to the tiny delineations of the sinew in the muscle,” said Tess Roering, vice president for marketing at Athleta, which opened its first physical stores this year.
After making more prototypes, Fusion produced the Dani-quin, as Athleta executives started calling the mannequin, in five variations. The running pose, especially, looks realistic: she is in midstride, with only her left toes on the ground. The Dani-quin, by the way, is headless.

“We wanted to make sure that our customers weren’t worrying about the hair, or anything else,” Ms. Roering said.

Michael Steward, executive vice president of Rootstein USA, which makes mannequins for stores like Ralph Lauren, Chanel and Neiman Marcus, said the newfound appreciation for specialty mannequins came as many retailers reassessed the market.

“A lot of people have decided they have to specialize,” Mr. Steward said. “Nothing sells the clothing like a mannequin: it’s a subliminal message from the retailer, the first thing people see in the window or in a department when they go into the store.”

When mannequins first were used, they were basically molded dress forms to which clothing makers pinned garments. By the 1920s, they had developed into torsos with joints attached, and slowly started to get wigs, makeup and glass eyes. By the 1960s, when some women stopped wearing bras, “you started to have nipples on mannequins,” said Linda Scott, a professor studying consumer culture at the Said Business School at Oxford. “That was a big shift,” she  said.

But in the 1970s, as retail chains expanded nationally and cost pressures increased, mannequins shifted back toward the generic. “That’s when you saw mannequins that did not require makeup, did not require wigs, or so much attention to detail, to reduce the costs,” said Mr. Huston, the Fusion executive.
During the recession, companies curtailed spending wherever they could, and mannequin sales slowed. But after shedding unprofitable brands or merchandise during the recession, the retailers are focused on a specific customer and a particular brand position, and they want their windows to reflect that with custom mannequins.

“Over the past two years, everyone has really had to reassess their business and their client base,” Mr. Steward said, “and the market is so competitive that people are just focusing on what they do well, and what they sell.”

Prices of custom mannequins run from about $400 to $1,200 a mannequin, not including the $15,000 or more that places like Fusion charge for development. A mannequin makeover can cost a national chain millions.

Is it money well spent? Not always, said Professor Scott, because shoppers are an unpredictable lot. “Sometimes they’re imagining themselves in the clothes, sometimes they’re just entertaining themselves on an evening walk, sometimes they’re standing there with a girlfriend talking about how stupid the clothes look,” she said.

And Mr. Steward, the executive at Rootstein, said retailers sometimes ask too much of their mannequins.“Everyone thinks they’re going to reinvent the wheel,” he said. “As I always say, there’s only so many things a mannequin can do: would you like two heads with that, madam?”

Zara Kids unveils first UK store in London’s Covent Garden.

Spanish fashion giant Zara has opened its first standalone Zara Kids shop in the UK as it seeks to grab a larger slice of the £4bn childrenswear market.

The store has opened in London’s Covent Garden, next door to a traditional Zara shop. It was previously an accessories and apparel shop and has its own entrance and fascia.

Childrenswear is a lucrative market for retailers such as Gap, H&M, Next and Marks & Spencer, and is one of the more recession-proof sectors, because parents stop spending money on themselves before their children.

The market has also opened up further following the collapse of Woolworths, which had a large share through its Ladybird brand. Problems at Adams, which fell into administration and closed 147 shops before being rescued by its former owner, have also had a bearing on the market.

Research firm Verdict estimated the clothing sector as a whole will contract by 1.4 per cent this year, but that childrenswear will only fall 0.7 per cent, to be worth £4.6bn.

A Zara spokeswoman would not comment on possible roll-out plans. The retailer has around 200 Zara Kids stores globally, mostly in Spain, and sells childrenswear in many of its larger Zara shops.

Verdict senior retail analyst Maureen Hinton said the UK launch could be a shrewd move. “Zara Kids has been fairly low key – often downstairs in stores and not displayed in windows.” She added it could pose a threat to other mid-market players. “There is the possibility of taking share from Next, M&S and Gap. It is an attractive offer,” she said.

Bernstein senior research analyst Luca Solca said there is room for Zara to build its market share. He said: “The market is still fragmented and Inditex can certainly gain share. On the back of its Zara stores there could be an opportunity to make more of kidswear.” He estimated that Zara’s childrenswear offer generated sales of between €225m and €250m (£202.2m and £224.7m) in the year to January.

Make-up and marketplaces are tops for beauty and apparel shoppers.

In March, eBay came out on top for traffic to beauty and apparel retail sites while Mary Kay was No. 1 for time spent, Nielsen Online reports.

eBay was the traffic winner despite posting a 44% traffic decline. 6.5 million shoppers visited eBay Clothing, Shoes and Accessories last month, Zappos was second in line with 5.2 million visitors, a 55% increase from a year earlier.

Visitors to Mary Kay spent on average a whopping 2 hours and 23 minutes on the make-up site—far longer than Avon, which ranked No. 2 with nearly 50 minutes.

The top 10 online apparel and beauty shopping destinations in March with unique visitors in millions this year compared to a year earlier and the percent change, according to Nielsen Online were:

* eBay Clothing Shoes & Accessories, 6.57,11.64, -44%
* Zappos.com, 5.23, 3.38, 55%
* Victoria`s Secret, 4.89, 4.20, 16%
* Avon 3.94, 4.20, -6%
* Lands’ End, 3.88, 3.47, 12%
* The Gap, 3.81, 2.38, 60%
* Old Navy, 3.54, 3.36, 5%
* eBay Jewelry and Watches, 2.72, 4.81, -44%
* L.L. Bean, 2.48, 2.70, -8%
* Shoebuy.com, 2.25, 1.94, 16%

Unique visitors count only once each shopper who came to a site, no matter how many times the shopper visited. This is a custom list compiled by Internet Retailer of the top e-commerce sites in this category based on Nielsen Online data. Rankings may contain multiple web sites from the same retailer or manufacturer.

By length of visit, the top 10 apparel and beauty sites in March (hours:minutes:seconds), according to Nielsen Online, were:

* Mary Kay, 2:23:10
* Avon, 0:49:58
* Lane Bryant, 0:30:17
* Woman Within, 0:18:49
* Blair.com, 0:18:25
* OneStopPlus.com, 0:16:30
* Victoria’s Secret, 0:16:24
* Sierra Trading Post, 0:15:11
* DavidsBridal.com, 0:14:45
* eBay Clothing Shoes and Accessories, 0:14:04

The top eight consumer goods industry segments in terms of online ad impressions (in millions) in March, according to Nielsen data, were:

* Food & Beverage, 3,490.70
* Personal Care, 3,354.67
* Print Publishing, 1,159.02
* Home & Garden, 985.01
* Apparel & Jewelry, 685.80
* Automotive Supply, 417.50
* Toy & Hobby, 150.57
* Recreational Gear, 146.14

Stores play on politics for sales

Gap, Wal-Mart hope election season can jolt consumer spending

With the start of the Democratic National Convention in Denver on Monday, retailers, faced with the toughest economic environment in years, have latched onto the presidential election as a vehicle for jump-starting sales.

Among the first to step into the fray: Wal-Mart Stores Inc. and Gap Inc.

Gap, the San Francisco-based apparel chain, is resurrecting its legacy white T-shirt with a nationwide “Vote” campaign. The rollout began Friday in Chicago at the Gap’s Midwest flagship on North Michigan Avenue, where makeshift voting booths lined the storefront.

Inside, shoppers lined up for free white T-shirts with the words “Vote for _____.” A clerk filled in the blank according to customers’ wishes using a T-shirt press. Shoppers have their pick of an array of press-on letters, markers, buttons and patches.

What are shoppers voting for? It’s not all Obama and McCain. Some are voting ice cream or lower gas prices or, simply, change.

The store had 300 T-shirts at 9 a.m. They were gone by 1:30 p.m. Gap’s seven-city tour moves to Philadelphia on Tuesday and runs through Sept. 11.

At the same time, Wal-Mart, the world’s largest retailer, is launching a series of television ads during the Democratic and Republican National Conventions.

The 15-second ads focus on the economy, gas prices and health-care costs, and they pitch Wal-Mart as a place to save money. The first ad airs Monday and is slated to run through Sept. 7 on cable network news and talk shows focused on election coverage.

Meanwhile, a new survey found that when asked to vote as if the election were today, shoppers that favored Wal-Mart, Kohl’s and J.C. Penney are more likely to vote for Sen. John McCain, while Macy’s and Target shoppers say they would cast their ballot for Sen. Barack Obama.

The survey, released Monday from Worthington, Ohio-based BIGresearch, also found that while Wal-Mart and Penneys shoppers favored McCain, the group was fairly evenly divided between Republicans and Democrats. Kohl’s shoppers, on the other hand, tended to fall more squarely in the Republican camp. Macy’s and Target shoppers were more likely to call themselves Democrats.

“Perhaps McCain should consider a bus tour through Wal-Mart parking lots, and Obama could use Target,” said Gary Drenik, president of BIGresearch.

How bad is it? Retail guru Mickey Drexler, dubbed the “King of Cool” on the cover of Fortune magazine’s Sept. 1 luxury issue, tells the business publication that the current retail environment is the worst he’s seen during his 40 years in the business. The CEO of J. Crew and master merchant also says the days of big-name designers are over.

“Designer goods have become much too available, either through their own distribution or through logo counterfeiting,” he told the magazine. “I see the world moving away from carrying a bag around with the designer’s initials or designer’s logo. The more you see of anything, the less special it becomes.”

Lilliput to open 500 standalone stores

With a revenue target of Rs 700 crore, leading Indian kidswear brand, Lilliput, plans to increase its standalone outlets from the present 112 to 500 by 2009-10, opening one store every fifth day. It also intends to increase its shop in shop presence to 450 by 2010. The mega plans – first-time ever by a domestic kidswear brand – also include the company’s intention to target the overseas market, having already opened showrooms in Bahrain and China.

The company is close to cracking deals in Saudi Arabia and Egypt and will have 25 outlets in the Gulf in the next one-and-a-half year.

Having captured 15% of the domestic market, Lilliput leads the domestic kidswear brand market in a market that is worth a whopping Rs 14,000 crore. With the organised market sizing up to only Rs 3,000 crore, growing at 20% per annum, the scope for designer kidswear in the country is immense.

Says Sanjeev Narula, managing director, Lilliput Kidswear Ltd, “We have increased our revenue target from Rs 290 crore to Rs 700 crore for 2009-10. Succeeding in such a price sensitive market is not easy, but I sincerely believe that if you cannot win a gold medal, you should not participate in the Olympics. Apart from giving immense variety and quality, our products comply with all EU standards.”

Started as an export house, 40% of Lilliput’s export turnover comes from the international fashion brand, GAP. Other brands that it caters to are Children’s Place, Mothercare etc.

Apart from high street and malls, the company has now started targeting tier II and III cities and has set shop in Bikaner, Udaipur, Calicut, Asansol, Coimbatore etc.

%d bloggers like this: