Joe Killinger is CEO of the RRD based in Dallas.

A small-box retailer operates their business very much the same as their larger counter parts but simply utilize less square footage meaning they don’t have as much space for their products, and therefore much less rent, and have fewer staff to deal with, which when combined can be a lot less overhead. With the small-box locations you will not have as much inventory but you can adjust by having an online presence or have the ability to send the clients their purchases the next day.

The economics are in favor of the small-box retailer, having to spend less on your lease rate means you can spend more on marketing, inventory management, customer management and of course less staffing. We are seeing several retailers that are currently in big-box location grow their presence by opening small-box locations that really are not far away. There is an entire new development of small-box retail that had its grand opening in the Pacific Palisades neighborhood of Los Angeles on September 22nd and it’s a huge hit. Customers will find small-box stores located in that development that have big-box locations within a 15 minute drive. If this development proves to be the success it looks like it’s going to be it could be a lightning rod that proves this is a great way for a retailer to grow their market share while maintaining control of their overhead costs.

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