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The new footprint for physical retail


Broadway Shopping Centre crop“The world of retail is changing” say the headlines that believe they declare an epiphany. However, the world of retail has always changed.

The only constant is never ending change and great retailers have adaptability hardwired into their DNA.

Failures in retail usually come from the opposite end of the spectrum – inability or unwillingness to recognise and respond to the constantly changing context in which they compete.

One of the by-products of the online world redrawing the rules of distribution has been the reaction in formats and footprint in physical retail.

Less than ten years ago we were still suffering under the belief in this country that specialty retail could achieve maximum productivity from a store footprint of 100sqm or less.

Landlords built canyons populated by endless streams of 100sqm boxes and maximised their yields accordingly.

Today, many of the businesses that occupied these spaces are failing and for two reasons.

Firstly, thanks to the coverage provided by online and the massive pulling power of super-regional shopping hubs, consumers no longer need to access little stores everywhere.

Secondly, in order to entice consumer foot traffic, physical retail needs space to dial up the physical attributes that justify its existence.

With the invasion of international brands the proof has further been delivered in the ant trails that have formed to larger footprints and the customer experience they deliver.

The contemporary specialty store that succeeds has doubled in size in the last ten years. And critically the businesses that are sustainable pick the eye teeth out of the store location opportunities that are presented to them knowing that they no longer need a never ending growth spiral of store coverage because clever store location enhanced by multi-channel commerce and marketing enable greater cost controls and higher productivity.

The basic laws of retail are not new and don’t change – the context does.

Location and merchandising have always and will always be critical to profitability

What has changed are the quantum and quality of information available to us for targeting and the convenience and cost effectiveness of digital.

The right number of stores in the right locations is now a science.

The size of the store is now supported by data and yes Matilda – size matters.

Of course the customer experience and merchandise mix are a blend of art and equation but without the right footprint, optimising the profitability of the business is not possible.

Peter James Ryan is head of Red Communication. He can be contacted on (02) 9481 7215 or at

© Copyright 2014. Red Communication Australia.

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