IADS Exclusive - Rethinking square meters: how department stores are betting on small spaces

Department stores and big-box retailers have traditionally believed that larger spaces and inventory would make them more appealing to shoppers, which was true for many decades. For many reasons, including consumers favouring e-commerce and more convenience and the challenge of finding and supporting the cost of operating big-box locations, a significant shift is taking place as US department stores Macy's, Bloomingdale’s and Nordstrom open smaller-format stores. This approach isn't about scaling back, as these small stores are not about limiting customer options. Instead, retailers break away from the stereotypes often associated with big stores: overwhelming layouts and product selections offered in inconveniently located stores. The small format concept is designed to provide a more curated selection of products, focusing on convenience, services and localised shopping experiences, concepts that have gained traction since Covid.

Seen as an opportunity to get closer to where the customers are with a smaller investment, Nordstrom Local opened its first location in 2017, and Bloomie’s in August 2021. Both companies have been expanding their footprint in these formats since then. Outside of the US, Magasin du Nord opened two small formats in 2024. This article will focus on these three companies’ journey and efficiency.

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