As it looks beyond the traditional retail mall, Macy’s (M) will add up to 30 more stores in strip malls. The stores are around one-fifth as big as its conventional locations.

“We are excited to accelerate the expansion of our small-format strategy as we continue to innovate and reposition our store portfolio to better serve our customers,” said Adrian Mitchell, chief operating officer and chief financial officer for Macy’s, Inc. “Our small-format stores are efficient to operate, provide the customer with a shopping alternative within our omnichannel ecosystem and present a unique opportunity to target high-traffic shopping centers. Our small-format strategy is one way we intend to harness the full power of the Macy’s brand to deliver sustainable, profitable sales growth for Macy’s, Inc. beginning in 2024.”

Bloomie’s, Bloomingdale’s innovative smaller store concept offering a casual, contemporary, and carefully curated shopping experience, has just unveiled its first West Coast location in Seattle, Washington, with an anticipated opening in November. This marks the third Bloomie’s store to join the family, complementing the existing ones in Fairfax, Virginia, and the Chicagoland area. Bloomingdale’s has ambitious plans to continue growing its small-format store network in the coming years.

According to Chief Stores Officer Marc Mastronardi, small-format stores are a key component of the solution. Macy’s has been experimenting with these smaller shops, which are approximately one-fifth the size of their conventional mall stores, for nearly four years. These stores provide a more streamlined selection of products, serve as venues for local events, and feature a contemporary and open design.

Nordstrom’s has opened up many Nordstroms Rack stores in strip malls other big brand retailers like Home Goods, TJ Max, Target, ULTA Beauty, supermarkets, and more are located. Foot traffic should be an advantage for Macy’s.

Not all is lost for Macy’s. It has a loyal customer base, and in many areas, it’s one of the only department stores left. The retailer Macy’s said in April of 2023, that it would establish a fulfillment facility in central North Carolina to support its expanding omnichannel operation project will cost $584 million.

When completely operational, the 1.4 million square foot facility, which is scheduled to debut in 2024, will have a capacity for automated direct-to-consumer fulfillment and employ close to 2,800 people. “This state-of-the-art facility is a significant milestone for Macy’s, Inc. as we invest in strengthening our omnichannel ecosystem,” Dennis Mullahy, chief supply chain officer of Macy’s, said in a statement. “It will support growth of our business as a leading omnichannel retailer.”

When fully operational, the China Grove plant will represent up to 30% of Macy’s digital supply chain capacity countrywide, supporting the company’s omnichannel capabilities significantly.

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