When it comes to retail, an anchor store is a term that is widely used. But what does it mean? In this blog post, we will explore everything you need to know about anchor stores in retail, including their definition, role, advantages and disadvantages, types, and the relevance of anchor stores in the ecommerce age.
Definition of an Anchor Store
An anchor store refers to a large retail store, often a department store or supermarket, that is the dominant brand in a shopping centre or high street. They are usually found in prime locations within a retail setting, such as corners, ends or central locations, to provide a focal point for shoppers to flock to.
Anchor stores are vital to malls and brick-and-mortar shopping locations. However, due to the advent of online shopping, anchor stores have lost a little bit of their lustre. As less people are going to shopping centres or high streets just to browse or hang out, as they use too. However the term ‘anchor store’ has evolved to include ‘anchor sites’, such as cinemas and restaurants, which provide additional focal points for customers within a town or shopping centre complex.
Role of Anchor Stores in Retail
Anchor stores play a critical role in the success of a shopping centre or high street. They act as a magnet to attract shoppers and create a successful shopping experience. The primary purpose of having an anchor store in a shopping mall is to draw traffic. It’s the “attraction” that pulls in shoppers. And, while these shoppers are most likely in the mall to visit this particular store, they’ll walk past your business too.
Anchor tenants are the key to a thriving shopping center. They not only provide shoppers with more options but also increase foot traffic in the area, attracting other retailers to open stores nearby. This is beneficial for mall developers as well as smaller retailers in the mall.
Advantages and Disadvantages of Anchor Stores
Advantages for Mall Developers
Anchor stores are usually part of a chain of stores, which means that they have deep pockets. It also means that they’ll do the majority of the work when it comes to advertising. This is over and above the work they do by simply setting up shop in a mall. The purpose of having an anchor store in a shopping mall is to draw traffic. We’ve established that. It’s the “attraction” that pulls in shoppers. And, while these shoppers are most likely in the mall to visit this particular store, they’ll walk past your business too.
Advantages for Smaller Retailers
As more shoppers notice you're open, more will walk in and shop your store, thus leading to increased foot traffic. Also, it's worth noting that because anchor stores tend to be busy, more shoppers might view your store as more convenient. That also gives you an opportunity to build customer loyalty.
Disadvantages for Smaller Retailers
The presence of an anchor store can also have its disadvantages for smaller retailers. Since anchor stores attract the majority of shoppers, smaller retailers may struggle to get noticed. In addition, anchor stores may have a negative impact on rents, with smaller retailers often paying higher rents to be located near them.
Types of Anchor Stores
Department Stores as Anchor Stores
Department stores are perhaps the most common type of anchor store. They usually offer a wide range of products, including clothing, accessories, home goods and beauty products. Examples of department stores include Macy’s, Nordstrom and JCPenney.These stores are often located in shopping malls and are known for their extensive selection of merchandise. In addition to carrying a variety of products, department stores often have amenities such as restaurants, coffee shops, and beauty salons.
They also frequently run sales and promotions, making them a popular destination for shoppers looking for deals. While online shopping has become increasingly popular in recent years, department stores continue to attract customers with their convenience and wide range of offerings.
Grocery Stores as Anchor Stores
Grocery stores are also commonly used as anchor stores. They provide a constant flow of shoppers, who need to buy groceries regularly. Examples of grocery stores include Walmart, Costco and Kroger. Apart from being a one-stop-shop for everyday needs, grocery stores are also a popular destination for people looking to buy fresh produce and other food items.
Many grocery stores have expanded their offerings to include non-food items such as clothing, electronics, and household appliances. In addition, some grocery stores offer specialty services like catering, pharmacy, and banking services. With the rise of online grocery shopping, many grocery stores have also enhanced their digital presence to cater to customers who prefer to shop from the comfort of their homes. Overall, grocery stores play a crucial role in shaping the retail landscape and meeting the evolving needs of consumers.
The Need for an Anchor Store
Attracting Foot Traffic
Anchor stores are necessary to attract foot traffic to a shopping center or high street. Without them, it can be challenging to draw in customers, especially in areas where there is a lot of competition from other retail locations. In addition to attracting foot traffic, anchor stores can also help to increase property values in the surrounding area. This is because the presence of a major retailer can signal to investors and developers that the area is desirable and has potential for growth. As a result, new businesses and developments may be more likely to locate nearby, creating a virtuous cycle of economic activity.
Of course, there are also potential downsides to relying too heavily on anchor stores. If one of these retailers were to close or relocate, it could have a significant impact on the entire shopping center or high street. Additionally, some communities may prefer to support smaller, locally-owned businesses rather than national chains. Ultimately, the decision to include anchor stores in a retail development should be based on a careful analysis of the local market and community preferences.
Building Brand Awareness
Anchor stores help build brand awareness for the entire shopping center or high street. Their recognizable names and logos can draw customers in, who may then explore other businesses in the area as well.as shop at the anchor store. Additionally, anchor stores often offer a wide variety of products and services, making them a one-stop-shop for customers' needs. This can increase foot traffic to the shopping center or high street and lead to higher sales for all businesses in the area.
In some cases, anchor stores may also provide additional amenities such as dining options or entertainment, further enhancing the overall shopping experience for customers. All in all, anchor stores play a crucial role in driving traffic and building brand awareness for the entire retail ecosystem.
Selling Remaining Mall Space
Mall developers often use their roster of anchor tenants to sell the remaining space at the mall before its opening. The presence of these prominent retailers makes the location more desirable for smaller retailers, which in turn helps fill the available retail spaces.
The Relevance of Anchor Stores in the Ecommerce Age
Trend to Ecommerce
The trend towards ecommerce is causing a shift in the importance of anchor stores. Many brands are more concerned with web hosting than physical store locations. Even when shoppers do visit malls now, how they shop is different. Online shopping has changed consumer habits, with many people preferring to browse and make purchases from the comfort of their homes.
Changing Shopping Habits
Due to the changing shopping habits, the relevance of anchor stores is diminishing. People no longer need to visit a shopping center to access their favorite brands; they can simply visit the brand's website and make purchases online. This shift in consumer behavior has led to a decline in foot traffic at shopping centers, making the presence of anchor stores less impactful than before.
Future of Anchor Stores in Retail
While anchor stores may be losing some of their significance in the ecommerce age, they are still an essential component of the brick-and-mortar retail landscape. To survive and thrive in this new era, anchor stores must adapt to the changing retail environment. They should focus on creating unique and engaging in-store experiences that cannot be replicated online. This may include offering exclusive products, hosting in-store events, or providing personalized shopping services.
Additionally, anchor stores should consider embracing the omnichannel approach to retail by integrating their online and offline presence seamlessly. By doing so, they can cater to the evolving shopping habits of consumers and maintain their relevance in the retail industry.
