Key Strategies for Retail Success: Resizing, Renovating and Relocating

In the pragmatic & dynamic world of retail, to be seen and present everywhere and staying ahead of competitors engages more than just offering excellent products and services. Retailers must time and again adapt to growing and changing consumer preferences, technological advancements, and market shifts. Post Covid, especially in the last two years that have gone by India's retail sector is experiencing notable transformations, influenced by various trends and market dynamics.

According to Anarock data, the retail landscape in India has been experiencing significant changes. In the first half of 2023-24, the share of stores smaller than 2,000 square feet declined to 52%, compared to 61% in the same period the previous year. This trend indicates a move towards larger retail spaces as retailers aim to enhance the shopping experience by providing more spacious and engaging environments. Conversations with numerous retailers and franchisees reveal a significant evolution in the retail landscape, particularly regarding physical stores. Over the past year, there has been a noticeable proliferation of malls and an increase in the number of large-format stores.

India's organized retail sector is witnessing rapid growth, marked by the proliferation of malls and retail chains in numerous cities. This surge is fueled by rising consumer demand for diverse product offerings and enhanced shopping experiences.

Resizing for better opportunities

Keeping Up with Trends & Optimizing Space: Retailers must reassess store sizes to align with current market needs. Downsizing can reduce operational costs, while expanding can capture a larger market share. During economic downturns, smaller stores can lower expenses and increase profitability.  As consumer preferences shift, resizing helps retailers adapt. The rise of e-commerce has decreased foot traffic in physical stores, making it essential to balance online and offline presence through strategic resizing.

Talking about the need of relocating and resizing, Ashish Tewari, Regional Business Manager, North Titan Company Limited  says, “One thought of relocation of a store is as per need of the business, when you relocate a store you see an opportunity in the new market and expect that the store will grow manifold from this location to the changed location. We do a proper catchment analysis prior to relocating a store. Secondly, in a jewellery store in a particular size, the franchisee has a limited opportunity to cater to limited numbers and if the store is scaling and is in need of resizing the store then also the store is relocated to a another area.”

Enhancing Customer Experience: Right-sizing stores can improve the shopping environment. Larger stores reduce congestion, while smaller stores offer a more personalized experience, both of which boost customer satisfaction and loyalty.

Strategically Positioning for Growth: Relocating

Finding Prime Locations: Moving to high-traffic areas increases visibility and customer visits. Although prime locations may have higher rents, the potential for increased sales often justifies the investment, helping retailers reach new customer bases and markets.

Capitalizing on Market Opportunities:  Relocating allows retailers to seize emerging trends and untapped markets, providing a fresh start for underperforming stores and maximizing market potential. When asked about the significance of relocating in Retail, Akash Srivastava, National Head - Business Development and Real Estate Expansion, Raymond Limited says,

“The right size means having the correct inventory on display, optimizing utilization, and achieving adequate stock turnover ratios. Additionally, it improves store operations, ensures focused customer attention, and secures appropriate rent due to the optimal size, which also optimizes capex. Relocating to the right market with better and more relevant foot traffic, potentially closer to competition to create competitive zones, ensures better management of stores during peak hours."

Renovating the Retail Space

Modernizing Infrastructure & Improving Efficiency:  Updating stores with the latest technology and design trends, such as new lighting, fixtures, and digital displays, attracts tech-savvy customers and creates a more interactive shopping experience. Renovations can optimize store layouts for better product placement and inventory management, leading to higher sales and lower operational costs. Well-designed stores also enhance employee productivity.

Maintaining Brand Image: Regular renovations ensure that a store’s appearance aligns with its brand identity, strengthening brand recognition and customer trust while effectively showcasing new products and services.

In the competitive realm of retail, the ability to resize, renovate, and relocate can determine whether a business thrives or merely survives. These strategies enable retailers to stay relevant, improve customer experiences, and seize market opportunities. Despite the challenges and costs associated with each approach, the long-term benefits of adapting to change far outweigh the risks. Retailers who embrace these strategies are better equipped to navigate the complexities of the modern market and achieve sustainable growth.

By consistently assessing and implementing resizing, renovating, and relocating strategies, retailers can ensure they remain agile and responsive to the ever-changing retail landscape.