Retail’s Great Reset: Why Store Formats are Being Reimagined

An aerial view of a busy American mall with multiple storefronts and shoppers

The New Retail Blueprint: Microspaces, Modular Fixtures, and Merchandising Agility

According to CRBE, since late 2019, large-format retail has accounted for the majority of obsolete retail space (vacant and off-the-market locations).

Once considered the pinnacle of retail success, big-box stores and sprawling malls symbolized a brand’s dominance, but that marker has shifted.

Today’s retail wins are about agility: The ability to test new formats (like the popular store-within-a-store), pivot quickly, and generate profitability regardless of location.

This shift signals more than a change in style preferences. It’s social and financial proof that a retailer can adapt to evolving customer expectations and withstand market volatility.

Whether it’s pop-ups in airports, compact showrooms in downtown neighborhoods, or microstores in malls, brands are betting on formats that are smaller, smarter, and more strategic.

Retail’s footprint isn’t shrinking. It’s evolving.

For visual merchandising and space planning teams, this evolution brings new levels of complexity — and higher expectations. These new formats demand precision in how space is allocated, merchandised, and executed.

Why Retailers Are Rethinking Store Formats

According to CBRE, “Larger format retail, which serves wide geographic areas and has faced sales cannibalization, has been particularly hard hit — accounting for 80% of the obsolete space while comprising only 46% of the total retail footprint.”

Super-regional malls, in particular, have been the most affected, making up 40% of obsolete space while representing just 5% of total retail square footage.

Several forces are accelerating this reset:

Overbuilding: Real estate development outpaced demand in specific formats, creating an excess of strip malls, outlet centers, and freestanding stores that no longer match retailers’ strategic goals.
Rising Costs: Scarce, desirable retail space is driving up lease and operating expenses. Retailers are forced to generate more revenue in less space.
Customer Expectations: Shoppers want faster, more curated, and immersive in-store experiences. Surprise and delight are the new shelf standards.
Omnichannel Pressure: Stores must now serve as fulfillment hubs, showroom spaces, and digital brand extensions — often all at once.
Flexibility: Seasonal, event-based, or test-and-learn formats require merchandising strategies that can pivot quickly and scale intelligently.
Post-COVID Shifts: Despite improving economic conditions, pandemic-era habits have consumers thinking carefully about how — and where — they spend.

This convergence of real estate constraints, evolving shopper demands, and economic caution is accelerating a permanent shift in retail strategy.

Retailers are no longer just downsizing. They’re reimagining what physical retail should do: How do we make the future of brick-and-mortar better, not bigger?

What Multi-Store Formats Mean for Visual Merchandising Teams

Compact formats, like microstores and pop-ups, may save on square footage, but they’re operationally complex. Every inch of space must serve a purpose.

In these environments, the stakes for visual merchandising teams are even higher:

Floor space is limited, so fixture planning must be precise.
Product visibility and accessibility are critical.
Displays must be intuitive and modular to keep pace with fast resets.
Localization is expected, not optional.

In a 500-square-foot microstore, there’s no room for misexecution. Store teams must set up quickly, efficiently, and exactly as HQ intended.

However, many retailers are still relying on outdated tools — PDFs, spreadsheets, and generic planograms — to manage this complexity.

Here’s the problem: These tools weren’t built for agility or precision.

To thrive in the new era of retail, brands need technology that mirrors the flexibility of the store formats they’re adopting.

Retailers that are getting ahead of the curve are using platforms, like One Door, to drive spatially-aware planning and flawless execution.

Here’s how:

Digital Store Model: One Door’s digital twin of every store captures unique layouts, fixtures, and constraints, enabling precise planning and store execution no matter the format.
Smart Containers: Modular content blocks that dynamically adapt to each store’s footprint, fixture set, and assortment enable hyper-localized execution at scale.
Fixture-Level Visual Merchandising: Planogramming down to the fixture level ensures the right products are displayed in the right places, even in tight quarters.
Agile Floor Planning: Drag-and-drop layouts make it easy to test, optimize, and deploy new store formats without guesswork.

Together, these capabilities empower visual merchandising teams to build once and localize infinitely.

How Leading Retailers Are Succeeding with Multi-Store Formats

Microstores, pop-ups, and showrooms aren’t brand-new concepts.

Walmart piloted its “Walmart Express” small-format stores in 2011.
Target opened its first urban small-format store in 2014.
Amazon launched Amazon Go in 2016.
Nordstrom (with Nordstrom Local), Macy’s (with Bloomie’s, based on sister brand Bloomingdale’s), IKEA, and Best Buy are actively testing formats like showroom-style spaces, experiential pop-ups, and sustainability-driven microstores.
Sprouts Farmers Market is exploring smaller stores to align with ESG goals.

These retailers are demonstrating that it’s possible to create immersive brand experiences in small spaces — if you have the right tools.

We’ve seen major retailers successfully adopt microstore and seasonal formats with full control over space planning and localized merchandising, thanks to spatially intelligent platforms like One Door.

Ready for the Reset?

The large-format retail store isn’t dying. Retailers are simply diversifying with smarter, smaller, and more strategic formats.

The brands that will win in this new landscape will treat space planning and visual merchandising as core capabilities, not an afterthought to a real estate deal.

With One Door, retailers can confidently navigate The Great Reset, equipping every store format with the clarity, flexibility, and precision it needs to succeed.