Lowe’s and Target Go Smaller to Get Bigger

Lowe’s is a leading retailer that specializes in home improvement and hardware stores across North America. According to its Web site, Lowe’s generates nearly $60 billion annually in revenues, operates about 1,850 retail stores, serves about  million retail and professional customers every week, and operates more than 30 distribution centers. “A typical Lowe’s store stocks 36,000 items, including private brands such as allen + roth, Kobalt, and Utilitech. It also “offers more than 50 interior and exterior installation services,  such as appliances, flooring, and blinds; and extended protection plans, repair services, and credit financing.”
Target is a leading retailer that can best be defined as a supercenter chain. Many of its units include both a discount department store and supermarket under one roof. According to its Web site, Target generates around $75 billion annually in revenue, operates about 1,800 throughout the United States, and distributes most merchandise through its network of 38 distribution centers. “We offer our customers, referred to as ‘guests,’ everyday essentials and fashionable, differentiated merchandise at discounted prices.”
Why include Lowe’s and Target in one post? They have two things in common: (1) Both chains have jumped on the bigger-is-better store strategy in recent years. (2) Both chains are now looking to open smaller stores to fit the location and customer base — and grow sales (get bigger by getting smaller). 🙂
With regard to Lowe’s, Matt Millar reports the following for Innovative Retail Technologies:
“Big-box home improvement hit Manhattan over the summer when Lowe’s opened stores on the Upper West Side and Chelsea. Taking a brand built on 100,000+ square-foot stores into a dense urban market like Manhattan doesn’t come without its challenges, though. Lowe’s spokesman Steve Salazar says attempting to shrink its standard store footprint and product selection to fit a 30,000-square-foot shop was never an option. ‘We approached the design and merchandising of our Manhattan stores from the ground up, and as we worked through that process, it became clear that technology was going to play a significant role in the store experience.’”
As for Target, Christine Kern reports this for Innovative Retail Technologies:
“Target has set a growth plan for the new few years focuses on making stores more accessible to city dwellers. As part of its overall commitment to sustainability, community, and smart development, it will create buildings that ‘use space efficiently, improve connectivity for guests and team members, and enhance local communities.’ Although Target plans 11 new stores in 2016 and four in 2017, it is moving away from its larger suburban-sized stores, with only one such store of 122,000 square feet planned in Allentown, PA. A 45,000-square-foot store in Manhattan’s Tribeca neighborhood is also in the works, but the rest of the new stores will be less than 40,000 square feet in area.”

Source: Innovative Retail Technologies. Click here to access its story on Lowe’s.

Source: Fortune Magazine. Click here to access Fortune’s story on Target.

 

This entry was posted in Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 3: Targeting Customers and Gathering Information, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer, Part 8: Putting It All Together and tagged , , , , , , , , , . Bookmark the permalink.

One Response to Lowe’s and Target Go Smaller to Get Bigger

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