NEW YORK (TheStreet) -- The large retail box store of the future tucked somewhere in rural America will appear drastically different to how it looks today. Here is what the future holds for all consumers that enjoy visiting Walmart (WMT), Target (TGT) or Best Buy (BBY) on the weekend:
Smaller store size: Supercenters that are under 100,000 square feet (today's size is in a range of 110,000-150,000 square feet) as to reduce rent, employee, and build out costs in order to counterbalance increased sales of lower margin, traffic-driving merchandise.
Online forcefully enters the store: Significant, dedicated square footage inside the supercenter for online order flow. I believe this section will be positioned toward the back of the store as to get people passing the merchandise they didn't buy online and to minimize employee steps from the stockroom.
Disappearing departments: The complete removal of certain categories that don't need to be carried year round in most geographic regions. Investments in inventory and employees are brought down, freeing up capital to invest in technology. Hunting, bicycles, and exercise equipment will be online order only, with mobile devices in the hands of employees aiding in closing sales in these areas.Leading brands become greater partners: Highly visible shops with top brands. The most powerful brands, such as Sony (SNE), Samsung, and Kellogg (K) will realize they have to stick out in a big way to grab the attention and dollars of consumers walking around with their heads buried in mobile devices. I am already seeing this aisle progression intensify with Starbucks (SBUX). Why does this new shopping ecosystem need to happen? Plain and simple: Physical store sales in the present continue to be very weak, and retail executives must recognize that change has to start today at the planning table as to avoid an ugly fate. Take a look at the longer-term sales slumps Walmart, Target and Best Buy are experiencing. One brand that I think will play a prominent role in the "Great Retail Redesign" is the legendary Lego, which has been undergoing an evolution. "The Lego Movie" has grossed north of $500 million worldwide. A sequel has been inked. I am seeing the Lego brand tap into its deep equity and extend into new categories (including watches at Macy's). By evolving the brand forward, Lego should incrementally add to the transformation of the supercenter ecosystem that will arrive at the aforementioned companies. In the near-term, Lego 2.0's new initiatives are a bright spot in the price competitive retail sector. The Undercover Vine Footage That Says It ALL About Lego Here, Lego leverages its movie success, bringing new products to the shelf. You're welcome Walmart. New Lego Friends for girls in approachable packaging. You're welcome, Target. Giant Lego clocks? A giant Lego minifig conversation piece for a man cave or kid's room? Yes please to both! The next "Star Wars" movie is loosely scheduled for a summer 2015 release. The winners are Lego and its retail partners. Another nice new product from Lego in approachable packaging. You could create one mean-looking Lego person from these packages. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
At the time of publication, the author held no position in the stocks mentioned.
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