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Big Retail is Going Urban

On my drive in today I was listening to Bloomberg Radio and to retail investment expert Howard Davidowitz. Beyond thinking that this guy has more retail knowledge stuck to his shoe than I’ve learned in my lifetime, he was semi-ranting about how the suburban “big box” retail model was over, causing the death of hundreds of malls.  The kneejerk cause being the growth of e-commerce, but as Mr. Davidowitz says “the trend is fewer stores, suburban to urban.” This shift will have a massive impact on how manufacturing brands support local retailers, no longer can they just pay attention to the big guys.

Showrooming No Longer a Threat?

Beyond the population shift back from suburbs to cities, consumers are looking for a retail experience but don’t need the massive selection, nor do they want to travel too far to get it. While the Millennials are the most connected digitally, “they prefer to be inside a retail store talking to a helpful, human sales associate.” Instead of showrooming local retailers, these consumers seem to be using the web to research before then going into a physical store to buy. Massive selection, once a huge competitive advantage for the bigs, is no longer an advantage given the web and smaller more curated showrooms are ruling the day.

The Bigs Go Small:

There was a day when massive selection meant cheaper, but now with commerce this competitive advantage is changing. The web is at the very least as inexpensive as the big box retailers. As the post baby-boomer generations stay more urban, the retail footprint is changing, getting smaller. As a result, Walmart and Target are building smaller and more urban locations. This is not their expertise.


Walmart’s new neighborhood market.


Target’s new urban location.

Start-Up Investment is Changing

Recently a company called Showroom raised $7.3M to help “connect those who have shops or empty real estate in highly trafficked areas with merchants who wish to make their goods available without making major investments in opening up a store right away.” They must have been listening to Mr. Davidowitz.

What’s Next?

As consumers move away from big suburban shops, the number and diversity of urban retailers will increase, putting pressure on the brands to adjust their approach. In years past, you could just camp a bunch of people in Bentonville or Minneapolis to sit on Walmart and Target, and boom you have 80% of your retail sales covered. But now, the local independents could wield just as much power and need to be supported in a different way. Enter Promoboxx, come talk to us or email me at