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Brought to you by Retail Insider and K3 Retail

Retail Insider and K3 bring you a monthly column taking a look at some of the most pertinent and interesting topics of the day in the big wide world of retail.

Downsizing on the up

Downsizing is definitely the name of the game today as the move towards multi-channel continues to force retailers to re-assess their physical space requirements.

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Coming to a store near you…

B&Q has just announced another sub-letting deal whereby Morrison’s is taking a chunk of one of its large stores. And even that world-renowned exponent of the big box, Ikea, has decided to throw the playbook out the window and open a smaller than usual store in Reading.

From its originally planned 38,000 sq m over three floors it has cut its footprint down to 33,000 sq m spread over two floors. Okay, it is not that big a reduction but as a strategic shift it represents a major move for the Swedish icon.

Its significance is further highlighted by Ikea’s current development of its first city centre store – in Hamburg, Germany – that is 20% smaller than its regular stores. The outlet will also act as pick-up point for collection of goods ordered online and potentially as a central warehouse for home delivery.

This is also the thinking at Hobbycraft and Carpetright where both retailers are looking to open small format stores. The craft retailer is on the hunt for 5,000 sq ft units on high streets in Greater London – a significant departure from its typical 7,000-10,000 sq ft outlets located on retail parks. The intention is to only stock best-selling lines and have the rest available online via its click & collect proposition.

In a similar vein Carpetright is using its quarter-sized stores to stock only samples. To date such units have performed so strongly that the group reckons these could represent half of its 600-plus estate as it relocates out of its larger units as their leases come up for renewal.

Such moves represent another boost for slowly-improving high streets and again highlights how multi-channel is re-writing the rules of retail.

 

Upsizing on the up

Be in no doubt that the plus-size clothing market is big – with more than 10 million women in the UK now a size 16 or larger and the category worth a hefty £6 billion this year. And it is growing – if we take figures from the US then it increased by 5% over the past year.

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But is your stock fashionable?

But there is a great big opportunity being missed here because if we again take the US, plus-size customers account for a chunky 50% of the market but their spending makes up less than 25% of total women’s clothing purchases.

The reason for this is down to the fact that this valuable customer is disconnected to clothing retailers. This grouping believes they are overlooked by the fashion industry to the extent that a massive 90% have completely given up on buying fashionable clothing.

This is a disappointing situation because this should be a sweet spot in the clothing category. On a positive note maybe (just maybe) things are changing and we are seeing a realisation that this growing plus-size group can no longer be overlooked.

In the online world Asos’ ‘Curve Collection’ is gaining a following and the stalwart of the plus-size market N Brown has also been doing well – with like-for-likes moving up 2.5% in its first quarter of 2014, helped by its ongoing shift of customers from phone ordering to online.

But the retailer is reckoning on an even brighter future as it clearly recognises the need to upgrade its branding and systems to better accommodate a part of the market that is crying out for fashionable clothing. Accepting dowdy clothing is no longer acceptable to the plus-size customer.

To address this situation N Brown is undertaking a major systems overhaul and has just appointed an experienced CIO to help it achieve its growth ambitions that involve making its product more contemporary and appealing.

If it can pull this off then it will help it to not only hold on to its existing customer base but also attract new ones in the plus-size market whose growing numbers are ensuring that this is one of the more buoyant ends of the sector.

K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.