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Boxed In, Boxed Out

September 4, 2012

After the rise of the national discounter, which signaled the demise of most regional mass merchants, and before the onset of e-commerce changed all the rules of retailing, the most important development in the history of general merchandise retail was the era of the big-box category killer.

No other retailing format had as big an impact on the marketplace as the super specialty store chain, and for much of the 1990s and into the first part of the new century, these stores were the fastest growing, most exciting players on the scene.

While Toys ‘R' Us is generally credited as the first category killer, the home textiles industry had more than its share of national chains that grew to dominate much of the sweet spot for business. Bed Bath & Beyond is the last man standing, but during the height of the big box, it was joined by a host of others, including Linens'n Things, HomePlace, Waccamaw, Strouds and LeeJay.

They are all gone and so, too, could others follow. The struggles at Best Buy make it the poster child right now for the category killer crisis, but many think Barnes & Noble is not too far behind and the office superstore triplets - Staples, Office Max and Office Depot - could be next. All of this following the demise of stores like Circuit City, Borders and others.

The big-box era seems to be drawing to a close ... or is it?

Across the merchandising wheel, we're seeing large superstore formats become the latest thing in the fashion business. Retailers like H&M, Uniqlo and Zara are all opening big flagship stores measuring out at 50,000-square-feet or more that have big box written all over them.
So, what's the difference here? It might be that these apparel boxers are largely private label animals with exclusive, proprietary merchandise offerings. They all appeal to a similar demographic, one used to searching through large assortments online and perhaps expecting to find the same thing when they shop in stores.

And not every store these chains is over-sized. Often these giants are viewed as flagships that can drive traffic back to smaller locations when the shopper comes upon them.

Can these same principles be used in textiles and home furnishings superstores? Certainly, a bookstore can't get away with private label nor can the small appliance department at Bed Bath.

But in textiles, the model is increasingly moving toward labels that if not out-and-out private are at least semi-private. And we've seen retailers like BBB with multi tiers of store sizes from ginormous to non-steroid enhanced.

These could all be tools to ensure the longevity of the surviving superstores.

The consumer never said she didn't like shopping at big boxes. She just didn't need them all, and the ones that were left had to be good operations and shop-worthy.
Big boxers are not going away. They are just moving onto the next round.