The Changing Face of Big Retail

The following video is part of our "Motley Fool Conversations" series, in which Motley Fool financial editors Brendan Byrnes and Austin Smith discuss their favorite stocks.

In today's edition, Austin discusses how many large retailers will look different to consumers going forward and what it means for investors. As big-box retailers have a difficult time with larger stores -- which are expensive to build and maintain, and somewhat inconvenient for consumers -- they are repositioning themselves with smaller designs that are located closer to consumers. In the case of Wal-Mart, this is most certainly a reaction to the erosion it realized from deep discount competitors like Dollar General.

We've discussed one way to play retail during the short term, but what about the long term? The good news is The Motley Fool has compiled a special FREE report titled "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, our analysts lay out how retail will change as consumers currently know it. But most importantly, they'll cover how you can profit from it. You can access it for free today by clicking here. Thousands have already requested access.

Neither Austin Smith nor Brendan Byrnes own shares of the companies mentioned in this video. The Motley Fool owns shares of Apple, Wal-Mart Stores, GameStop, Coach, and lululemon athletica. Motley Fool newsletter services have recommended buying shares of Coach, Wal-Mart Stores, Apple, and lululemon athletica; writing covered calls in GameStop; creating a bull call spread position in Apple; and creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (0)

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  • Report this Comment On December 02, 2011, at 10:03 AM, Varchild2008 wrote:

    I was going to +1 rec this until the very end.

    Did I just read, "The smaller stores aren't going to dramatically increase their sales per square foot?"

    Well, that's a limited way of looking at things.

    When we have more and more small scale stores around selling tablets and smartphones...what we have is the potential to sell/market goods off of these devices.

    Of course, anyone that buys a digital Best Buy product off of a tablet you bought at Best Buy Mobile...that doesn't translate to a sale based on square footage.

    Digital sales though are the bigger picture of where our small scale stores are growing the fastest.

    Gamestop sells Digital Game Informer Magazine among other digital products off of tablets they sell.

    Barnes and Noble has their own digital app store and sells digital books off of theirs.

    And so on and so on.

    This expands a store's square footage into INFINITE. You can have an INFINITE amount of inventory for sale now inside a tiny tiny store simply buy selling mobile devices and then selling digital product off of those.

    So.....I have to give you a MINUS 1 rec for suggesting that small stores are not going to expand their sales per square footage.

    They have already been expanding and the expansion will ramp up in the next 5-10 years as more players will want to enter the space.

  • Report this Comment On December 04, 2011, at 12:52 PM, TMFBWItime wrote:

    Regarding you point,

    These retailers have so many locations that even a few extremely productive small stores will not dramatically affect a company's sales per square foot.

    Your point about smaller stores handing out tablets preloaded with apps boosting online sales is correct, but still a drop in the bucket to the over all online sales these firms realize.

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