Format flexibility is now one of the key requirements for a successful retailer growth strategy, especially in mature markets where growth is no longer being driven by rapid development of new cookie-cutter shopping centers.

Getting free of formulae that chain a retailer to a particular kind of real estate (e.g. neighborhood centers or suburban Main Streets) can open up a host of previously ignored real estate opportunities.  Each of these may provide a slightly differentiated way of getting close to customers who otherwise would be less accessible. For example, urban infill plots, large university campuses, factory outlet centers, mixed use developments, pop-up shipping containers and many overseas opportunities each have a distinct set of requirements for store size, store configuration and, of course, merchandising.

There are many examples of retailers that have become good at adopting flexible formats to suit local sites and conditions.  They have demonstrated the value of thinking outside their format comfort zones.

US department stores such as Bloomingdale's, Nordstrom and Neiman Marcus, with their forays into heavily edited  and value formats represent one example.

Walmart has become masterful at it.  The world's largest retailer has developed a whole slew of customised formats to suit every occasion, from 18,000 sq.m freestanding supercenters at one end of the continuum, through discount stores about half that size in suburban power and community centers, to 8,000 sq.m supercenters for urban areas, to 4,000 sq.m supermarkets, to 1,000 sq.m edited food stores.  This year it also came up with a 325 sq.m concept designed specifically for university campuses.  It includes a pharmacy and licensed apparel.

Australia's major retailers have not been quite so proactive in meeting the needs of their customers.  Myer and David Jones in particular will need to change this or their "growth" strategies will end up consisting of resisting store closures.

For small retailers in Australia who are frozen out of shopping centers, a number of opportunities exist for expansion both at home and overseas.

And the days of waiting until your domestic market is saturated before leaving home are over.  This should resonate in places like Australia where demographic limitations and planning controls at home make overseas markets look particularly tasty.


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