The Supply Side: Retailers test new formats in 2022

Brick-and-mortar stores are essential to consumers even as online sales continue to grow. Walmart, Dollar General and Dick’s Sporting Goods are doubling down this year on efforts to test new physical store formats with digital and experiential enhancements.

Walmart recently unveiled its latest store format enhancements at Store No. 4108 at Elm Springs Road in Springdale. The retail giant dubbed the new format “time well spent.” It focuses on making Walmart a destination where customers want to spend time, said Alvis Washington, vice president of store design, innovation and experience at Walmart.

“For millions of customers, our stores and [employees] are the reason they love Walmart. They are the greatest assets for our brand. We’re always listening to our customers’ feedback to help inspire, evolve and refresh the store experience,” Washington said.

The new enhanced store design focuses on improving the shopping experience in general merchandise and higher-margin categories like home, fashion, baby and beauty.

“In today’s omnichannel world, customers still want to experience — touch, feel and try — items. So, we’re now aiming to make customers feel wowed and proud when they shop at Walmart. We’re using powerful design elements to show off amazing products that wow our customers,” Washington said.

Walmart said the redesign phase would amplify the physical, human and digital design elements to inspire customers and elevate their experience. In the beauty department, store planners enhanced the lighting, and there are interactive screens that highlight products and provide tutorials on how to use some products.

Walmart took a page out of Target’s playbook with the redesign and highlighted products in elevated store-within-a-store displays for Gap home furnishings at the corner of two central aisles. The bed is made up with Gap furnishings, and there are pillows, bed linens and other decors on the elevated display. Customers can activate their phones to shop a broader assortment online with QR readers on display.

BABIES & PETS
Walmart also chose other aisle intersections to put up elevated product displays that highlight brands like Reebok and Justice for Girls and spotlights product categories like men’s grooming supplies and baby products.

Washington said Walmart’s activated corners in the general merchandise area are aimed at exciting displays at the crossroads of specific departments that pull customers in. It allows them to touch, feel, and become part of the space, allowing them to discover and access all the products the retailer offers.

Baby products are also an area where Walmart is concentrating its new design. The elevated displays showcase all the items needed to create a dream nursery and strollers and car seats that are brought out of the box to allow for test drives.

The new design also provides more space for shoppers to explore category items Walmart has online with digital touchpoints in areas like pets. The retailer is expanding services and products. By scanning a QR code via digital screens in the pet product area, shoppers can find additional bedding options, learn about pet insurance services or have a 50-pound bag of pet food delivered to their home. The Elm Springs store also has veterinarian services that provide medical attention and pet grooming.

Walmart said it would continue to test, learn and make changes to its store formats based on feedback from customers.

Scott Benedict, vice president of partnerships at Rogers marketing agency WhyteSpyder, said Walmart Supercenter updates are likely to positively impact the retail giant’s ability to have store shoppers begin to look at Walmart.com for additional products. He said the stores get millions of customers each week, and having the sizable elevated product displays at busy traffic corners is a great strategy to drive store traffic to the website.

“By putting up signage and displays that allow shoppers to link to the online inventory is also a way that consumers can solve their shopping needs that day. Walmart is saying to in-store shoppers that they have a whole different side of their business,” Benedict said.

He said getting in-store shoppers to begin making online purchases is the first step in eventually subscribing to Walmart+. He said Walmart using the general merchandise side of the store to launch a remodel is a good indication of their plan to drive more online and omnichannel business.

“It’s a logical place for Walmart to test and learn. It will be interesting to see if and when they try to install some of these ideas on the grocery side of the business,” he said.

DOLLAR GENERAL FORMATS
Dollar General is rolling the dice with its pOpshelf format with new stores in Texas. The retailer said it will accelerate plans to open 1,000 pOpshelf format stores by 2025, starting with 100 stores this year.

“Throughout pOpshelf’s first year, we’ve been very pleased by the customer demand for the concept’s on-trend merchandise, price points and shopping experience,” said Emily Taylor, the chief merchandising officer at Dollar General. “pOpshelf is an integral part of Dollar General’s innovative and long-term strategy as we continuously look for ways to best serve customers and diversify the relevant goods we offer.”

The stores will offer a range of items, mostly under $5, including home décor, beauty products, large crafts, party supplies, specialty foods and electronics.

Benedict said Dollar General owns rural commerce, and the format is a way the company can test larger metro markets. He said the retailer has proven it can successfully put stores in communities that are no more than wide places on the road.

“We will have to see if the format resonates in larger metro areas against more competition,” he said.

Dick’s Sporting Goods is thinking outside the box with its new House of Sports venues located next to stores in Rochester, N.Y., and Knoxville, Tenn. Dick’s said the House of Sports venues offer a place to gather and learn. The experiential format features a playing field, climbing wall, golf pro shop with putting greens, a batting cage, a house of cleats and a fitness and workout center for trying equipment sold in the store next door.

Jan Kniffen, consultant and CEO of Kniffen Worldwide, said this is an exciting proposition for Dick’s Sporting to take the experience to a new level and improve customer loyalty.

Benedict said specialty retailers have a more challenging time generating foot traffic because they don’t sell consumables bought every week. He loves this strategy for Dick’s who also has a large business in team sports outfitting. The venue offers teams opportunities to spend time together at the House of Sports, which helps drive brand loyalty.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.