Big city, small world Urban migration and its impact on retail
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Big City, Small World: Urban migration and its impact on retail by Bertrand Chovet and Scott Jeffrey
The biggest macro-trend of the moment, urban migration, is already having an impact on retail formats. Over half the world’s population now lives in cities, according to the United Nations, and the move from rural to urban continues at a high pace. In addition to the challenges climate change presents, cards of city planners, design engineers, and architects are grappling with waste and inefficiency, faced with the need to transform tomorrow’s cities into lean, clean, people-friendly places.
As such, the pressure is on for retailers to ensure that their stores adapt to the new city model. Urban retail sites with their slim land parcels require a slightly adjusted brand focus to make stores more relevant to a city population. It’s here that big-box retailers in particular may find themselves in the zoning crosshairs, subject to bans, or at least building limitations that prevent them from executing their traditional strategies and sizes. Indeed, it is already forcing many retailers to explore alternative formats to overcome these restrictions. The likes of Carrefour, J.Crew, and Rewe have been experimenting with new formats. Carrefour With sales lagging slightly in its hypermarket format, Carrefour decided to focus its attention on the growing urban market. It created a new format called Carrefour City, which focuses on customers who are onthe-go, with limited transportation means.
The new format, which is much smaller than the hypermarket, suits a dense, city environment and focuses on its audiences three main needs: saving time, value for money, and fresh food. Since implementing the stores, Carrefour has seen a turnover increase of 30 percent and a frequency increase of 25 percent. The positive response has led to the continued roll-out of the format in various locations. Carrefour Contact, a slightly larger version of Carrefour city, is another model it has introduced in small towns and village centers, which offer produce, a butcher’s department, and other meal-preparation products. REWE REWE has been rolling out a multi-format strategy across Europe to expand its customer base since 2009 – a strategy that has so far proved successful, helping it to catch up to market leader Edeka. Similar to Carrefour, one of the new formats that it continues with includes REWE-City, a small, full-service supermarket that is focused on fresh and organic produce to cater to urban shoppers.
Big City, Small World: Urban migration and its impact on retail
REWE has also been focusing on revitalizing its convenience stores, which are growing in popularity. In 2009, for example, REWE addressed its struggling Nahkauf neighborhood chain in Germany, lowering shelf heights, reducing prices, upgrading store fixtures, and creating new signage to enrich store section segmentation. In just the first few weeks, Rewe reported an increase of four percent in sales.
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are only the beginning. When combined with the increase in online shopping and m-commerce, the idea of what a store will and can be is likely to shift even more radically. The future brings with it change – and opportunities for deeper levels of engagement. (See our Store of the Future infographic for more.) ■
J. Crew In 2008, the previously mall-based J. Crew set a trend, by opening a men’s store designed by Andy Spade, of Jake Spade fame, in a former Tribeca bar. To adapt to the urban space, Spade modeled the store after the New York classic watering hole, The White Horse Tavern (a West Village favorite of Jack Kerouac and Dylan Thomas). When it opened, the store created a stir for its originality, with displays that felt at home in the small room (including antique books and chests) and ties slung over the stocked bar. While the overall experience feels very J.Crew, the store experience has a city-boutique feel and is infused with an element of surprise to engage shoppers on a deeper level. Since the J.Crew liquor store’s opening, other brands like John Varvatos have followed suit, opening a store in former and iconic, East Village club, CBGB. Similarly, Gap recently opened a pop-up store in a small New York Fifth Avenue space, that featured items for sale that one would not entirely expect from the brand that made its name in jeans and chinos. Meanwhile, in 2010, J.Crew followed the success of its own model, opening up another specialty boutique store on Madison Avenue: J.Crew Bridal.
Piaget’s London Flagship Store A lesson in adaption
Overall, in J. Crew’s case, the new formats represent something more than just fulfilling a need. It inspires affinity – experiential attachment.
Interbrand worked with luxury brand Piaget in creating a London flagship store on the exclusive Bond Street – a move that will help Piaget build its own distribution network in the U.K.
Multi-format is only the beginning The migration to the city is impacting retailers and consumers in numerous ways, creating shopper demands for new retail formats and challenging retailers to adapt to new space constraints. And yet, new formats
Initially, the historic city location posed a number of constraints. The look of the older building and its staircase, for example, didn’t immediately mesh with Piaget’s modern vision. But rather than work against local authorities and the architecture, Piaget used the historical aspects of the building to enhance and interact with the design. The final product is a welcoming store that truly conveys the Piaget brand – a perfect balance between tradition and modernity.
Bertrand Chovet
Scott Jeffrey
Bertrand Chovet is Managing Director of Interbrand in Paris and he leads his office’s branding practices, including brand valuation, analytics, corporate design, and retail. In his 15 years at Interbrand, he’s focused on building brand distinctiveness and preference into all of his work. Bertrand has wide experience with corporate, consumer, retail, and non-profit work.
As Chief Creative Officer of Interbrand Design Forum, Scott Jeffrey manages the everyday activities of the design staff. As brand expert and guardian, Scott makes sure every project stays focused on bringing the brand to life in the retail environment. As a designer, Scott and his creative team have been part of many client success stories over the past 18 years.
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