Retail finds itself lost in space

December 22, 2023By Views

by Dave Wendland, vice president strategic relations, for Drug Store News

Let me harken back for a moment to the 1960s television show, “Lost in Space,” and its infamous one-liner, “Danger, Will Robinson!”

As brick-and-mortar retailers adjust their operations to meet the demands of today’s shopper, there is a risk of becoming lost, and a real danger of falling victim to irrelevance. Standing still and failing to adjust fixture arrangements, assortment strategies, or addressing consumer expectations could lead a number of retailers to suffer irreparable damage. Make no mistake, virtually every retail footprint must adapt to address factors affecting physical layout such as self-checkout, in-store fulfillment, emerging category trends, digital integration and theft reduction, to name a few.

Let’s start with automated checkout. The growing appeal of self-checkout among retailers—and consumers—has provided quicker checkout and reduced labor. But it has also created a threefold challenge:

  1. How do you replace the traditional staffed checkout lanes with this technology-driven approach?
  2. What configuration will be most beneficial for shoppers and for theft deterrence? and
  3. Where will impulse-generating displays and other fixtures fit within the floor plan?

Another area of attention revolves around the creation of an efficient store-based fulfillment operation within a retail setting to enhance rapid delivery and increase customer satisfaction. However, transforming storefronts into omnichannel locations presents the risk of interfering with in-store shoppers.

There is also the question of space. Will fast-moving items be relocated to a specific area for quicker fulfillment and where will displaced items or equipment go? And how will in-store pick areas or micro-fulfillment areas be staffed and managed? Besides the resulting logistical and staffing nightmares, turning a store into a makeshift warehouse isn’t going to impress customers.

While recent economic pressure has caused consumers to shop more intentionally, making room for emerging categories to meet trending shopper needs becomes a third challenge. Right-sizing traditional departments and rearranging floor space to accommodate new product groups requires a strong dose of science and a fair amount of art.

There must be continuity across the store layout that is logical to shoppers and encourages purchase behavior. However, there is a delicate balance between productivity and aisle allocation in a finite amount of space.

Pressures in space allocation can also arise from digital integration. Retail stores continue to face competition from online purveyors, while digital-first companies are opening their own physical stores that combine online and offline attributes.

To stay competitive, traditional retailers are considering how digital technologies can be used to remove friction from traditional retail operations to produce advantages. Unfortunately, this typically leads to significant space challenges. Frictionless stores have become a north star across the retail landscape. Customers today demand the same speed, convenience, flexibility and immersive shopping in person that they get online.

Finally, retail stores must consider how they are managing their space to reduce theft and thwart mounting shrink. Some have embraced putting physical barriers around products, while others have invested in sophisticated technology to protect their most expensive items.

The sum of all these challenges is squarely focused on space utilization. So, before retailers become lost within their four walls and find themselves in grave danger, consideration must be given to the three most important productivity levers: space, inventory and people.