News and Features

Small format stores - new trend in fashion retail industry

2 January 2020

Apparel Resources

BlackBerry Store

'Small is the new big' – this is the new expansion strategy adopted by the majority of retailers across the world. Retail firms have understood the relevance of size while opening an offline store. Today, big box brands and retailers are going small and this is the new trend and a more realistic expansion strategy in the industry.

As a brand, our effort is more around the location, and then the second preference is the size of the store which is decided according to how conducive it is to the brand on the basis of the location. The House of Blackberrys stores offer entire wardrobe options for Indian men. This ideally needs around 1,500 sq.ft. of space but there are times when we have a good location but the area available is small. In such cases, we opt for small sized stores and play with the merchandise mix and this works greatly for the brand, affirms Ramesh Kaushik, Vice President - Brand Experience, Blackberrys.

The inception of a new trend

Raymond Store

In India, Future Group identified small format stores as the first of the five pillars of the long-term retail strategy of the firm, subsequently opening a number of stores in various formats. The trend soon flowed down to the fashion retail brands who cut down the size of their stores to improve their revenue per square feet.

“Raymond realised the potential and importance of emerging markets beyond Tier-1 cities very early and gradually expanded its reach in the hinterlands of the country. In order to facilitate this expansion, we developed new retail business models in the form of small sized stores which are called Mini TRS stores. We established these stores in order to reach out to such markets in a relevant and engaging manner with a dedicated brand store. We have rolled out over 303 stores in past 24 months which is the largest store roll-out in men’s fashion and lifestyle category. We piloted this new business model in September 2016 and then perfected it over six months and commercially launched it in March 2017. We can set up these stores in 15-30 days as compared to 90 days for the bigger stores,” prides Mohit Dhanjal, Director-Retail, Raymond Ltd.

Small format stores not only reduce the costs – both operational and rental, but also act as pilot stores to gauge interest in Tier-2 and Tier-3 markets. Blackberrys looks at expansion at two levels – geographical and pure play sq.ft. expansion.

We look at other consumer allied industries at a particular location and interpret the market before opening the brand doors anywhere. For example, if Apple or a good smartphone company has opened a sizeable display centre in a city, these are the cues which give us an idea about the per capita consumption behaviour of a particular area which helps us decide if we want to be present in that market or not. And smaller sized stores prove to be a better decision for these areas where we are still testing the waters, asserts Ramesh.

What drives the growth of the trend?


The trend of smaller stores is shaping up in a big way in India wherein even Ikea is departing from its large warehouse-size store formats and is planning to open few smaller outlets; the first truncated version is to be launched in Mumbai. So, what exactly is driving this trend?

A number of retail chains are opening smaller stores in a bid to gain scale, overcome paucity of real estate and grow fast. Small format stores allow companies to test their products and ideas without having to invest in traditional huge commercial spaces. Furthermore, these outlets help in expanding the brand visibility and its reach, penetrating the deeper pockets when compared to larger stores which operate with certain demographics, avers Kewalchand P Jain, MD & CEO, Kewal Kiran Clothing Ltd.

What lies in the future?

Even as the small format trend is widening in both Europe and Latin America owing to youth fashion culture and newer brands who want to reach out to its consumers, India too is catching up and the new format is being well received by both the rural-urban and urban dwellers in the country.

Going forward, small format retail stores are all set to adopt the business model that retailers are going to bet on. While other business models including experiential, large formats, etc., still have their eminence, a considerable number of retailers/brands are now considering resizing their stores to smaller sizes for better return on their investments. The overall retail scenario is undergoing a transformation of sorts and the passing years will decide on what will work for the ultimate success.