Is Remodel the New Retail Strategy in 2021?
After a year of unprecedented uncertainty and upheaval, you would expect most retailers to spend the year trying to get back to where they were before the pandemic. You’d be wrong.
As we enter 2021 with multiple COVID vaccines already being deployed, many of the most influential retailers have ambitious plans for 2021—plans that will make construction workers very happy. That’s because a surprisingly large amount of them are planning large remodeling projects throughout their stores in the coming year. Here are some examples:
- Walmart has plans to remodel as many as 1,000 Supercenter stores by the end of 2021. The redesigns are being rolled out to complement the Walmart mobile app, with more self-checkout kiosks and Walmart Pay stations. Walmart—always on the cutting edge of retail technology—is giving their customers a more seamless, streamlined shopping experience that leverages the new popularity of contactless shopping.
- CVS plans to remodel 1,500 of their stores into health and wellness facilities by 2021. These remodeled locations would include expanded room for health screenings as well as a lab for blood testing, plus community spaces and wellness rooms for group events and classes. Since they recently purchased Aetna for $70 billion, there is little doubt that insurance factors largely into CVS’s future as well.
- Dollar General has plans to open 1,050 new stores and remodel 1,750 locations. This includes the continued rollout of their Popshelf stores, specializing in trendy seasonal items, as well as home décor, health and beauty products.
Renovations have proven to be popular and profitable for Dollar stores in general. Dollar Tree has recently completed 371 renovations to their stores, including new Dollar TreePlus! locations, selling items for more than $1. Dollar Tree President and CEO Mike Witynski recently discussed a shift in consumer buying habits, “We saw a shift from kitchenware and table top into more home decor and soft home, as customers are investing in their homes and spending more time in their homes.”
Rethinking the retail space in 2021
You don’t need a crystal ball to understand the rationale behind the majority of these remodels. Retailers are looking for new and innovative ways to engage with a new generation of customers. The traditional retail model—while still profitable and popular—is nonetheless losing a bit of its luster in the digital era.
The most forward-thinking retailers are reinventing the very concept of retail, bringing in new elements including health and wellness (CVS) contactless shopping (Walmart) and—if you take a look at many of the nation’s aging shopping malls—entertainment and even logistics.
Shopping malls are remodeling…and evolving
In 2021, shopping malls have become retail dinosaurs. Many of the large retail anchor stores that occupied the prime mall real estate, such as J.C. Penney, Macy’s, Nordstrom and of course, Sears, are either in chapter 11 or are vacating their leases.
Even the structures themselves feel dated. For the most part built in the 1970s or 80s. And the data shows that they do not have as much to offer shoppers in the age of ecommerce. Which is why the malls that are primed for success in the years to come have remodeled and remade themselves—starting with the largely empty anchor store space.
Developers have remade the large retail spaces with a range of non-retail offerings. Dining, entertainment, fitness, office space, hotels, and even fulfillment centers (also known as dark stores) are attracting a new generation of consumer who is interested in more than just shopping. As Nick Egelanian, president of SiteWorks, a shopping mall retail consultant told the New York Times, “The true mall of the future will incorporate a mix of uses, and the retail will be downsized. If it has 2 million square feet today, it may only need 1 million square feet tomorrow.”
To get there, that means a lot of store remodels will be happening in the near future. Whether it’s Walmart, Dollar Tree or your local shopping mall, things are going to look different in the years to come. For retailers, this represents a new opportunity to make your retail space more relevant to the needs of tomorrow’s customer. Until then, you can expect a lot of “Please excuse our appearance while we’re under construction” signs.
Any thoughts on the new wave of retail remodeling? Let us know.