Our latest white paper takes a closer look at the growing trend of retailers adding small-format stores to their fleets. We dove into the foot traffic data of four leading chains to see how retailers can use small-format stores to increase visit density, cater to niche audiences, and foster brand loyalty. Below is a taste of our findings. For the full report, read the white paper here.
Target – Targeting the Right Audience
Small-store formats can help retailers offer a curated product selection to specific audiences. Target has a typical store format that spans around 130,000 sq. ft, but the chain has been incorporating small-format stores into its fleet since 2012. Today, the chain operates over 150 small-format stores, including around 25 small-format stores located on or near college campuses that cater specifically to students. Target as a whole is already one of the strongest retailers in the brick-and-mortar space. Still, foot traffic data indicates that the company’s small-format stores are performing even better – the brand’s regular-sized stores saw 15.1% growth in Q3 2022 while small-format stores saw Yo3Y foot traffic growth of 35.7% in that same quarter.
And unsurprisingly, the median age at these college stores skews young. The median age of Target visitors nationwide is approximately 35, while visitors to the campus-oriented stores have a median age of 28.9 – which may mean that Target is benefitting twice from its campus-oriented stores. First, the company has succeeded in creating a shopping experience that caters specifically to college students, which is likely driving the success of these campus-oriented stores. And second, by cultivating positive engagement with younger customers, Target could be fostering continued brand loyalty for years to come.
Targeting a Smaller Trade Area
Perhaps more surprising is that Target’s small-format campus stores successfully draw healthy traffic volumes despite their relatively small trade area. The small-format Target near Ohio State University (OSU) had a True Trade Area (TTA) of 4.2 square miles between January and September 2022, while two nearby full-size locations in Columbus, OH, had TTAs of 22.8 and 29.3 square miles, respectively, during the same period. And the trade area of the OSU small-format Target is not just smaller – it is entirely subsumed within the trade areas of the larger, nearby Targets, making the success of the small-format campus store even more impressive.
Attracting a new customer base within an area served by multiple stores is no easy task, and the campus Target stores did just that by carving out a new customer segment within Target’s trade area. And despite the overlap with nearby, larger Targets, the campus stores had higher Yo3Y visits than full-size locations.
The success of Target’s small-format campus stores in areas already served by full-size locations highlights how retailers can make use of small-format stores to reach new audiences.
For more insights into small-format retail, read the full white paper here.
