FROM ANCHOR STORE TO OMNI-SPACE: FINDING NEW PURPOSE IN BIG RETAIL SPACES
September 24, 2020
4 min read
The anchor is a relic of a retail past that is now overshadowed by e-commerce and digitally native brands. Could we revive anchor stores in a new way—one that revitalizes both the store and mall and grows alongside a changing market?
Omnichannel commerce has become table-stakes for retailers today. From in-store and online to BOPIS and curbside pickup, more retailers are relying on multiple channels to drive consumer engagement, brand loyalty, and revenue.
So imagine a place that brings these channels together: a place that marries the convenience of the e-commerce “endless aisle” with the experiential qualities of brick-and-mortar—with benefits for consumers, retailers, and property managers.
It’s the new and improved anchor store. True to its original purpose, it still drives mall traffic, but in a way that’s never been done before—with multiple storefronts supported by shared warehouse space.
There are several key factors that make the industry ripe for this concept.
- Digitally native brands have revolutionized the industry and proven that a completely digital model can be successful. While these brands are digital first, a growing number are expanding into physical stores.
- BOPIS (buy online, pick up in-store) has emerged as a high-performing channel that offers convenience and cost-savings to both consumers and retailers. Many retailers are now redesigning their operations to support BOPIS along with traditional in-store operations, e-commerce shipments & returns, and curbside pickup. It’s a complex, challenging mix for brands to deliver—seamlessly—while managing ever-expanding inventories.
- Warehouse space is in short supply. The power of the endless aisle depends on sophisticated inventory management and fulfillment—both of which call for a strategic warehouse network. E-commerce typically requires three times as much warehousing as traditional retail distribution centres. And within physical storefronts, space is prioritized for driving sales, which means there is little to no space for inventory.
Each storefront or brand contains only a sampling of product—enough to entice consumers to see and touch. POS areas drive impulse purchases, while convenient pickup counters and return areas complete the hassle-free experience. Digital screens promote popular products and allow shoppers to easily select items and fill their carts. On-site associates are available to answer questions, provide product advice, and quickly handle returns, all while serving as effective brand ambassadors.
Outside, plentiful parking allows for fast curbside pickup, while rows of lockers enable shoppers to purchase in the mall and pick up on the way out.
The repurposed anchor is not a new idea; anchor stores have, in recent years, been turned into everything from gyms to restaurants.
But turning a large, single-tenant space into another single-tenant space does not reflect the current and future needs of retailers, property managers—and consumers.
The omni-space solution does.
It offers digitally native brands a physical extension of their online stores, providing an additional consumer touchpoint and supporting more efficient last-mile delivery—all without committing to a huge store network.
Retailers inside the mall, meanwhile, now have full access to curbside pickup. They also have expanded inventory that does not consume store space, and a system to effectively manage online returns.
The size, infrastructure, and convenient location of anchors make them ideal for this concept. But its success depends on property managers’ willingness to change the anchor’s revenue model to one where retail tenants rotate in a mixed-format space with alternative lease plans. If that can be achieved, this new, more innovative anchor could be a saving grace for property managers and retailers alike.