EXPANSION TEAMS
A look at brands and categories that are growing
I read CSA editor-in-chief Marianne Wilson’s recent “From the Editor’s Desk” column (page 8, March 2015 issue, Chain Store Age) with great interest. Her piece — “The store is back (even though it never left)” — touched on the topic of brick-and-mortar retail expansion and “the relevance of offline retail in an omnichannel world.”
The article got me thinking in more detail about the retail expansion we are seeing in 2015. What brands are growing? Which categories are thriving and why? Are the names and patterns we are seeing notably different in 2015 than in past years? I see five general categories of retail expansion — each with its own drivers and internal dynamics.
1. The rising tide
The first and most obvious category is expansion by established brands, driven by strong profits and overall economic strength. Dollar General, for example, is expanding into Maine, Oregon and Rhode Island, growing its footprint to 43 states nationally. As reported in CSA, Canada’s largest supermarket chain Loblaw “will open 50 new stores and renovate 100 existing stores in 2015 as part of a $1.2 billion investment ...” Others expanding include outdoor retailer Gander Mountain (with new stores in Texas and Oklahoma) and fast-casual salad and wrap restaurant Salata, growing from 42 to 60 locations.
2. Innovation-driven expansion
New and service-based concepts form a critically important expansion category that has been missing in recent memory. Florida-based Bealls department store will be unveiling its new Bunulu concept this year, with several new stores offering a selection of “coastal-inspired” lifestyle apparel designed to appeal to a younger demographic. Stitch, an innovative new service-based retailer offering custom clothing alteration, will be opening in West Hollywood this year, part of a wave of beauty and personal services retailers opening their doors or expanding in 2015. The grocery segment continues to roll out new concepts, as well.
3. The international scene
International retail brands coming to the U.S. make up a significant percentage of retail expansion opportunities in 2015. Wilson specifically referenced Sweaty Betty and Hamleys toy store from the U.K., as well as the Australian brand Lorna Jane. Japanese eyewear brand Jins, which promises custom glasses within 30 minutes, will be opening its first U.S. location in San Francisco.
4. Virtually certain
More and more pure-play retailers are making new inroads in brick-and-mortar locations. For example, Warby Parker eyewear is set to open approximately 10 new stores this year, and award-winning fashion brand Bonobos, which opened its first brick-and-mortar “Guideshop” concept in 2012, has announced that it will add 30 more over the next two years.
5. Designed to sell
The year 2015 has also seen a number of successful designers roll out new brick-and-mortar concepts. From apparel and accessories (like Houston-based Elaine Tanner, a brand offering women’s handbags, shoes and accessories) to furniture and home furnishings (Jonathan Adler), design concepts moving to stores is a noticeable trend in the industry.
What may be most exciting about these expansions is the sheer variety. There is a lot of creativity in the marketplace today, as brands find new ways to connect with consumers — and new niches to fill. Designers and brands alike are winning with concepts that skew younger. Many of the most successful new concepts span a broader range of price points and offer more merchandising variety. Others fill the gap between Internet and brick-and-mortar, and more are rolling out stores and services concepts that can work in both large and small markets. Even some of the biggest brands are working to fill new (and smaller) niches, too, as TargetExpress and Walmart Neighborhood Market stores demonstrate. And popular categories like restaurant and grocery are pushing new ideas through to fruition.
While it’s by no means a universal trend, it’s safe to say we’re seeing a new wave of healthy creativity and expansion by many brands — new and old — that will shape the retail landscape for years to come.
Jeff Green is president and CEO of Phoenix-based Jeff Green Partners, specializing in retail real estate feasibility, retail expansion planning and market analysis. His regular Chain Store Age column, Retail Rap, can be found on chainstoreage.com/real-estate.