Store formats: augmenting brands, not changing them



When William Fortnum and Hugh Mason started up their luxury grocer in the early 1700s, it would surely have been inconceivable to them that a few centuries later, there would be a far smaller version of their Piccadilly flagship occupying a corner of a North London railway station. However, this can be the beauty of the changes companies undergo over time, and Fortnum & Mason’s St Pancras store, opened in 2013, is already being proclaimed as a successful venture. I thought it would be interesting to look at recent developments in store formats – covering companies from Thomson to Argos – and what they can tell us about the changing world of retail today.

One of the most notable (and obvious) alterations between Fortnum’s flagship and its new outpost is the size difference – at 2,000 sq ft, the St Pancras store is a tiny fraction of the original. It is not designed as a real new revenue stream. Rather, it is a demonstration of the company’s ability to keep up with the times, showing us that Fortnum’s is a fast-paced, imaginative company. In a similar vein, last month the biggest retailer in the world, Walmart, said that it was stepping up its roll-out of small format stores, something that CNBC has dubbed ‘integral’ to its chances of success. Taking a lead from Fortnum’s, perhaps?

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Altering size with new formats is one way to show that a business is capable of responding to developing trends. Another is to adopt different and innovative technologies in new, flashy stores, which has spread through the retail industry like wildfire in the last couple of years. Travel agent Thomson has placed a lot of faith in its ‘next generation’ stores, which offer touch screens and tablet devices for sales reps. Likewise, Argos has announced that five or six new digital stores will be moving into London within the next few months. It’s remarkable that, as City A.M. reported last week, MD John Walden is name-checking Amazon as a company Argos wants to compete with. But, this injection of ambition and boldness is exactly what a new store format seems to be able to do to a company!

A lot of businesses seem to be diversifying into new formats, changing their brands in order to attract new customers or look good to prospective investors. However, some firms have been practicing this model for years. Retailer McColl’s, for instance, has split its convenience store and newsagent arms for decades, growing its two portfolios stably through acquisitions. Today, both divisions are of roughly similar size – according to the company website,the firm operates 725 convenience stores and 555 newsagents. McColl’s shows that augmenting a brand gradually over time can be a sound tactic, rather than businesses going in new directions arbitrarily.

All the diversifications I’ve talked about above are exciting moves that promise much in the longer term. Store formats are a great way to attract attention and to make a brand seem interesting, whether it comes as a new innovation or a gradual development. Have I missed out any companies that use new store formats in a particularly impressive way? Let me know at moira@thembsgroup.co.uk, and have a brilliant weekend.