Suburban kids move to the city

Large chains are no longer only interested in industrial parks and shopping centres.
September 2017
Suburban kids move to the city

Large chains are no longer only interested in industrial parks and shopping centres in the suburbs, and have made new locations one of their priority expansion objectives. Media Markt, Decathlon, Worten, Ikea, Verdecora, Carrefour, and the latest to arrive: Leroy Merlin, have all packed their bags to move into city centres. All of them have turned their original business model around to adapt it to a more urban strategy. What factors are contributing to these moves?

- One of the reasons is fierce competition from monolith Amazon and e-commerce in general: these channels offer same-day delivery, without the need to leave home and at very competitive prices.

- Transportation is undergoing a transformation in big cities. Residents rely less on cars, opting for new formulas such as Cabify, Uber, bicycles or motorcycle and car-sharing apps. People are starting to question whether owning a car is worth it.

Companies such as Emove, and Car2go promote the use of their services in city centres, meaning reaching farther-out areas is difficult with these services. As a result, large suburban chains have had to adapt their formula from square one based on fewer visits, generally concentrated on weekends with a high average purchase, to a more compulsive shopping formula at any time of the week in order to adapt to the urban environment. These adaptation strategies seek to offer differential services to the customer in comparison to what they have been providing up to now. Ikea, for example, with its opening in the heart of Madrid's "Golden Mile," allows the customisation of products such as bed sheets, lacquered furniture or the personalisation of bedroom elements such as headboards. MediaMarkt is committed to spaces focused on the digital environment, with its own virtual reality area and a space for gamers. Decathlon City, the name the company has chosen for its urban stores, offers services like pickup of products purchased on their website. Are we facing a stampede of large shopping malls on the outskirts of cities like in the U.S.? Is the urban customer prioritising greater convenience and personalised service over the suburban shopping experience?

Suburban kids move to the cityAlexandre López
Senior Manager