I have no idea how they arrived at only 6 percent of sales being lost due to too few employees — I’m sure it is much higher. The simple fact that J.C. Penney has 50 percent fewer associates on the floor than they did 10 years ago tells you their problems started long before Ron Johnson. Service takes people. Without service your brick-and-mortar store is just a slower, more expensive version of online.

I think the over-spaced narrative is overdone! It is certainly true that in some sectors there is too much space, but metrics that look at space on an overall basis are often very misleading. For example, the average American will not travel too far for certain products; combine this with the low population density across many parts of the U.S. and you have a situation where you need a lot of stores to generate sales and share. That’s unfortunate, but it’s a function of the market.

Some stores could do to be downsized, I agree. However, those that are downsizing are often those with failed retail propositions. Many Macy’s stores are too large because their retail and product strategy is lacking. IKEA and Home Depot have huge stores, but their strategy is on point.

I think a more balanced truth is that we have too much poor retail space in the U.S. And it’s not going to survive in an increasingly competitive era.

YES to all of your call outs. In addition, smaller store size would also force retailers to confront one of their long standing and ongoing maladies — the deep belief that “more is more.” More malls, more stores, more square footage, more customer choices, more emails, more and deeper discounts. All of which is creating more prior season inventory hanging at the back of the store. The “more” that is needed now is more focus and discipline. Better storytelling. Sure, the process of store closings is under way, but are retailers going to rethink HOW they make best use of this reduced space?

For the first time in history, most major retailers are true multi-format operators, even dollar stores. The trick is to create a balance between small, medium, large and even temporary and permanent spaces. Beyond this there is an opportunity to fine-tune assortments, particularly in small formats, to determine which categories and products make more sense in bricks and which are viable for clicks.

Loss prevention and asset protection teams should play a role here – using data and collaborating with merchandising teams to make better decisions on the front end rather than just catching bad guys. Setting a profitable “stage” in stores and shaping consumer behavior across all touch points is the new frontier. It’s time to give loss prevention/asset protection a seat at the big table.

Yes to all of this. America is way over-stored. In the U.S. there are about 23.6 square feet of retail per person. That’s nuts. Australia has 11.1 square feet and the U.K. 4.6. In my opinion, this amount of retail space is not sustainable, and we’re seeing the fallout now.

Another issue is how retailers are utilizing their space. Taking on a modern showroom approach instead of cramming in as much merchandise as possible is a better experience for customers, and makes shoplifting more difficult. Smaller stores, curated product selections, and accessible and attentive staff are all so important. As Bob pointed out, retailers have to treat their online and offline spaces differently. If customers are making the effort to shop in person, they want a great experience with friendly staff. If they wanted to browse your entire product catalog without talking to anyone, they would go online.

America is undoubtedly over-stored — it has excess capacity and many retailers have too large stores for the new world. However, to say they should simply shed that excess is easier said than done. Property owners are not falling over themselves to take back space because the cost of restructuring real estate can be large, as seen from Marks & Spencer’s results out earlier today. It is a long haul and one that needs to be thought through carefully. Another option is to look at the space and see if there are alternative uses rather than try and dispose of it. There are many new start-up retailers that may be interested in taking space in a well-run store that will take away the burden of space. Also, it’s true that staffing becomes an issue however retailers do not always look at their traffic flows or customer needs when they schedule their staff. Getting staffing right is another part of the equation, it is not the answer to the overcapacity problem in the U.S., but it… Read more »

All I could think about as I read this article is what it’s like to shop at a suburban Macy’s. The second floor generally has only one or two associates to manage 10+ departments, an impossible task, especially when you are anchored to the cash register. So other than ringing up a sale, there is no customer service.

Sure it’s easier for smaller retailers to provide better service and in-store experience, but even then it’s not something that automatically happens. A smaller footprint would definitely help decrease shrink and improve service in larger stores, but downsizing a giant store isn’t always an easy task. I agree with Bob here: 6 percent of possible sales lost because of lack of service seems awfully low.

The statistic I love to lead with was from L2, “Between 1970 and 2015 malls grew at twice the rate of the human population.” This is still an issue being dealt with by developers and PE groups, but that’s on the supply side. The composition of the individual stores’ bloated floor plans and sprawling inventories is a remnant of that era that is much trickier to fix. As populations (Gen Y/Z) are shifting more towards urban cities where smaller store footprints are the norm, the suburban outlets that already struggle to find talent for the shop floor experience a compounding effect: no staff, way fewer customers, but still the same costs. Unless the retailer can give back part of their oversized footprint to the shopping center (which is happening in some cases), they need to focus on repurposing that space for non-sales to generate awareness and interest through events or product demonstrations — just as examples. They then can create a sustainable area for sales management and LP risk, while attempting to attract new customers.

Interesting premise that larger format retailers may be contributing to theft. There are many other ways to thwart theft that involve technology, controlled access displays, etc. so I believe this challenge could be effectively overcome.

On the other hand, I definitely agree that the consumer experience — and lack of available staff — has greatly diminished the consumer experience. And that smaller format stores with well-trained and friendly, accessible staff give these retailers an edge over the bigger box operators.

If brick-and-mortar is to remain relevant to shoppers, there are three things I would advocate for: 1.) EXPERIENCE — there has to be an advantage of going to a physical store and it has to delight shoppers (think Wegmans or Ulta Beauty); 2.) EXPERTISE — whether with in-store staff readily available to help consumers navigate purchases or technology-enabled solutions, information must be at a shopper’s fingertips; and 3.) EXPECTATIONS — assortments that appropriately meet the needs of the intended shopper has become essential. Relevance matters!

Changing store sizes without fundamentally rethinking what the store needs to be is a bit like shuffling deck chairs on the Titanic. That building close to where the customer lives needs to be:

• A store with (curated assortments) of products to sell from the part that is the shop floor;
• A fulfillment/reverse logistics center;
• A showroom for that endless aisle, with some smarter ways of displaying/stocking/fulfilling the product that is not on the shop floor, or stored in the in store warehouse (aka as a back room).

Can it be smaller and less expensive to run? Sure, but not without considering new capabilities like some AI-supported Virtual Reality to support the presentation of that endless aisle of non-resident product, new fulfillment capabilities to get the non-resident product to the customer’s home same-day and, of course, better curated assortments for the shop floor.

How do you fundamentally change the 100-year-old department store to something new, without fundamentally rethinking that building close to the customer’s home?

No. Understaffing is not a function of size, but retail model. It is just like flying on a domestic airline where there are 2-3 flight attendants on a flight. Per square foot, that would appear to offer great service for a great customer experience. However, when you compare it to many foreign airlines, especially premium airlines, where there are at least double the number of flight attendants on the same airline (often for fewer passengers), and the customer experience is superior. We can do the same when we compare a convenience store with 2-3 employees, compared to a larger store (double the size) with double the employees, and the customer experience is clearly superior. The same applies to shrink, customer service, etc.