Giant retailers must either adapt or die – but what happens to the dead spaces?
By Mack Lamoureux | August 2, 2015
Darren Gunn sits comfortably behind his large wooden desk with a smile on his face. On the wall beside him is his grandfather’s hammer emblazoned with the words “Paws hammer, a tool, an inspiration – with commitment, anything is possible.” On the opposite wall is a large framed painting by his daughter. He leans forward a little, raising himself slightly out of his chair, and points out of his office window.
“See that, the driving simulator over there? That is the first retail deployment of a mechanical simulator of that calibre.
The store in which he sits is in the middle of its grand opening. It is Canadian Tire‘s largest in Canada. It feels like it’s straight out of a mundane retail-based science fiction movie from the ’70s. Among its aisles is a realistic driving simulator where one can test the effectiveness of winter tires, video-game consoles with the latest NHL offerings for the kids, and over 110 of what Gunn calls “digital experiences in the store.” It even has a virtual reality simulator for choosing patio furniture. Edmonton’s Store, as it is known, is entirely based around what Gunn calls “experiential retailing.”
It is quite possibly the future of retail, but the opening is a little out of place – because, all over Canada, big-box stores look to be dying painfully drawn-out deaths.
On one fateful Saturday not long ago, managers at Future Shop stores all across Canada called their employees into the break rooms to tell them the brand was no more. The fallout: All stores were closed or converted into Best Buys, the company that has owned Future Shop since 2001. In Edmonton alone, three of the Future Shop big-box stores closed while two were converted.
The most spectacular example of this trend is the recent implosion of the Target brand in Canada. Every single last Target store in the Great White North closed after a failed expansion by the American company and, although Gunn doesn’t like to see any business close down, the Target incident came as a godsend.
“I have probably 110-plus Target employees working for me now. We just went and hired them all. It’s bizarre in a way; a number of them come up and hug me,” Gunn says. “They say they can’t believe the difference in working between the two environments. Target was a good employer but it’s a massive, sterile retailer.”
As of now, Oxford Properties Group, the owner of the Target space in Kingsway Mall, says there is a redevelopment plan for the empty store, but aren’t able to share the details yet.
It currently exists as a shell, an empty husk of its prior state, and it is not alone.
The question is: What becomes of these spaces when big retailers close up shop?
Dnyanesh Deshpande is a principal at GSA Consulting Inc. He was a principal urban designer at the City of Edmonton. Deshpande explains that there are two options for the vacant spaces. Option one: They can be repurposed for future big-box stores – a Sears begets a Zellers, a Zellers begets a Target and the cycle of big-box retail continues. Or option two: The stores can be torn down and something may rise from the ashes.
In the case of the stores located within malls, they will, almost assuredly, be repurposed, but the paths for the free-standing stores are not so obvious.
“The second option is the one where you really need long-term design, and the question becomes: Was the earlier designed well enough to accommodate that vision or not?” Deshpande says.
The lack of long-term planning is a major problem in regards to the relationship between a big-box store and the neighbourhood in which it resides. Victor Dorian is the president of the Prince Rupert Community League, which encompasses many of the big retailers located on the Kingsway strip, and has seen several big-box stores move in and out.
“On the one hand, it has good prices and choice for people who are not wealthy. But on the other hand, it has serious consequences health-wise, environmentally, visually and architecturally. It increases our dependency on vehicles so it’s bad for the environment and our health because we spend so much time sitting in our vehicles driving to these stores and parking.”
Dorian feels the only way to build new big-box stores in Edmonton is to do it in such a way that you offer residents proper walkability and attempt to lower urban sprawl.
In its formative years, Edmonton was a suburban-centric city but, recently, it has moved toward a design based on urban ideals.
In the old model, growth was focused in a low-density way. Big-box stores, much like malls, functioned as commercial anchors for neighbourhoods. The new design model tries to integrate the commercial centres seamlessly into their communities; this is the urban environment that Dorian wants for his neighbourhood.
Views like Dorian’s are reasons why big-box stores are on the decline. Another – perhaps the biggest of all – is the proliferation of online shopping.
The days of customers going into a store and picking out new iPads or MP3 players are over. Now, patrons will engage what’s known as “showrooming.” A shopper will still come to a store and check out a product that he or she can tangibly hold and see. If that person likes it, he or she brings out the phone, hops onto a favourite online store and buys it there for a lower price. This hits stores whose profits are based upon a single product category the hardest. You can wait three days for a music player or hardware, but not so much for your weekly groceries.
In this new world, retailers have to adapt – which is what Canadian Tire is attempting to do with its experiential retailing.
“There has been a huge trend in retailing happening. I think you would call it a tipping point. There is a change in the way that consumers are reacting,” Gunn says. “I think that a lot of retailers are getting it and some aren’t. And the some that aren’t unfortunately aren’t around anymore.”
But even someone actively working to bring people to a “brick and mortar” store can’t help but embrace the ease of online shopping. When Gunn was brought on to head up the new flagship store, his first order of business was to find a new home in Edmonton. While on vacation in Florida, he found the perfect one. The listing was online.