Big Box Stores Spin Off Downsized Brands

Retailers looking for the upside of a down market are thinking small. OfficeMax, Walmart, RadioShack, Best Buy and Lowe’s are just a few of the big box chains that have launched or are studying space- and cost-saving scaled back versions of their core brands, spin-offs or niche-sized specialty stores, according to The New York Times.

OfficeMax is testing its 1500- to 2000-square-foot Ink Paper Scissors concept with three new stores in the Seattle area. Not only does this small footprint reduce the development price tag, it also opens up opportunities in urban markets with walk-in business. The merchandising focus will be on the hottest selling items in full-size OfficeMax stores—from flash drives, ink and toner to paper, pencils, filing and mailing supplies and calendars.

As The Times’ report noted, companies are using small or niche format prototypes to tap the potential of new markets: Walmart with its four specialty food shops in the Phoenix area; Best Buy with its 900- to 1200-square-foot mobile phone concept and RadioShack with three upscale 1500-square-foot Point Mobl wireless stores in Dallas. Lowe’s is testing stores that are 30- to 50 percent smaller than the brand’s 117,000-square-foot warehouse as a means of lopping nearly 10 percent off the development bill and building out its presence into Florida, Arizona, California, the Midwest and rural areas, the article states.

“If you've got the wherewithal, everyone is thinking about smaller sizes,” said Lee Peterson, vice president for brand and creative services at WD Partners, in The Times. “It’s a liquid time for retailers. ‘Let’s try it’ is now the mantra.”