Bloomingdale’s Is Trying a New Small-Store Concept — Is This a Viable Solution for Retail in Pandemic Times?

Bloomingdale’s is reportedly unveiling a new type of store as it works to expand in pandemic times.

The retailer’s small-format concept, dubbed Bloomie’s, is set to open this fall in Virginia’s Mosaic District shopping complex, reported FN’s sister publication WWD. It’s expected to span roughly 22,000 square feet — a departure from the chain’s average department store size, which measures about 200,000 square feet.

“As part of the continued evolution of our omnichannel ecosystem, we will continue testing several smaller-format, off-mall stores, including Bloomie’s,” a spokesperson for parent company Macy’s Inc. told FN.

The addition to Bloomingdale’s brick-and-mortar fleet comes during a challenging time for the retail sector, which is contending with a drastic shift in consumer preferences amid the global health crisis. Many Americans who felt unsafe visiting physical stores swiftly turned to digital channels to place their orders, amplifying services like buy online, pick-up in store, curbside pickup and other contactless offerings.

As the coronavirus outbreak continues to reshape the shopping landscape, small-concept stores have emerged as a potentially viable option for retailers who may want to forge ahead with expansion plans but sidestep some of the risks associated with full-line department stores.

At the same time, in the years since retailers started dabbling in smaller-concept stores, some have reaped the benefits of leveraging those locations for online order fulfillment instead of a traditional point of sale. Small stores might also be used to help support operations at their bigger sister outposts; Bloomie’s, for instance, will launch just four miles away from the Bloomingdale’s store in Tysons Corner Center in Tysons Corner, Va. (However, there are also some concerns that smaller enclosed stores could provide less space for adequate social distancing.)

“Our response to COVID-19 has heightened our focus on the omni-customer,” Macy’s Inc. chairman and CEO Jeff Gennette said in the company’s third-quarter earnings call in mid-November. “We are redefining the experience our customers are looking for today and are improving all legs of the omni experience, stores, digital and fulfillment, so our customers can shop when, where and how they want safely and without friction.”

The concept is a product of Macy’s Inc.’s three-year turnaround strategy, which was announced at its investor day in early February. The plan included trimming 125 stores from its total footprint, cutting 2,000 jobs — or about 9% of its corporate workforce — and ramping up investments in both higher-margin private labels and off-price through Macy’s Backstage. Macy’s Inc. also sought to expand its own small-format store concept, Market by Macy’s, which opened another outpost just two weeks ago in the Dallas-Fort Worth metroplex.

This story has been updated with a statement from Macy’s Inc.

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