Even before the recession hit our economy and changed most economic equations radically, many retailing experts wondered about the future of big box retailing.  The center of this focus revolved around the question of how many additional communities remained which were underserved or not yet served by these giant stores.

To be clear this discussion centered primarily around chains approaching or exceeding 100,000 sq. ft. for proposed openings.  Walmart circumvented this discussion to a degree with the success of its supercenters.  Supercenters essentially combine the traditional Walmart discount store with a full-throttle supermarket.  Thus two store types were basically combined, often replacing an aging traditional Walmart, in a community already proven in its ability to support a big box format.

Home Center warehouses seemed another matter.  Thus it was thought that future growth and expansion of the home center warehouse format would eventually run out of space(s).  The question was how long down the line was eventually.  The subprime crisis followed by the economically crippling recession essentially cut the timeframe surrounding this question to become a current event.

In recent years, projected annual openings for Lowe’s and Home Depot have been reduced to single digits or barely above that mark.  Sure, a suddenly suffering economy with no clear end in sight was a big factor in these industry stars virtually shuttering expansions.  Additionally however, communities which still had the population to seemingly support these respective locations, no longer sported the wealth.  Worse, home sales and home building were virtually non-existent in many recently affluent communities.  Underwater was now a term more commonly referred to in terms of mortgage problems than a troublesome boating adventure.

When Lowe’s acquired Orchard Supply Hardware two years ago, many saw an opportunity for the company to expand despite these big box doldrums.  Orchard operates unique hardware locations coming in at around 40,000 sq. ft. per store.  Still these are not nearly as comprehensive in their variety of offerings as can be seen through typical home center warehouses.  While Orchard enjoys strong customer followings near its locations in California and Oregon, few outside the areas are at all familiar with Orchard.

Now Lowe’s is entering Manhattan with a format which has been nearly two years in the planning.  Lowe’s has operated two stores in Brooklyn and one in Staten Island for years.  These are fairly typical of Lowe’s traditional stores and offerings.  Manhattan however offers significantly different challenges than setting up in these outer boroughs.

Manhattanites rent or own apartments.  Most are expensive and often relatively tiny.  Many residents of the other boroughs own houses.  Also, apartments in these communities tend to be at least a bit larger and somewhat more reasonable in price   The economies of the outer boroughs seem able to support a true home center warehouse.  Manhattan real estate costs and residential demographics make the opening of true home center warehouses fairly prohibitive.

Lowe’s response to this is to open two unique locations in trendy Manhattan neighborhoods within the span of about a month.  These locations were carefully planned to meet the costly challenges of opening and operating in essentially upscale residential centers, while anticipating the needs and expectations of their generally affluent consumers.

To this, Lowe’s is about to debut a 30,000 sq. ft. location on New York’s popular Upper West Side.  Next month Lowe’s will follow with a 38,000 sq. ft. opus in the burgeoning Chelsea district.  The company terms these locations as urban concepts.  Lowe’s feels that for residents living near one of these new locations, when requiring an outlet exceeding 100,000 sq. ft., they can visit one of the ten traditional Lowe’s surrounding locations, outside the borough.

These new, relatively diminutive locations feature products intended to accommodate the small living spaces typically found in Manhattan.  Many products to be promoted in these stores specifically offer ease of transport to respective homes on subways and buses, as is the norm for many in New York City.  This includes items such as fold-up brooms mops and dustpans.

Other products designed for this population include fixtures and appliances such as compact bathroom vanities and an eight-foot-long kitchen counter that comprises a sink, 18-inch dishwasher, oven, stovetop, a compact refrigerator and a freezer tucked under the counter.  Unique local services include professional cutting which allows curtains to remain in the box as they’re trimmed, so they’re easy to transport home.

The limited selling space offered by these new locations is compensated for by state-of-the-art technology which adds to the store’s limited stock.  This includes a seven-foot-high “Next Aisle Over” touchscreen which allows shoppers to virtually inspect dozens of other models of major appliances, in addition to what they see on the sales floor. The customer can tap the screen to spin a full-size image of said appliance for a 360 degrees study from every angle, or swipe a door  to open and close it or to look around inside. This works for all large appliances.

Home Depot has operated two locations in Manhattan for some time.  The company describes these as Warehouse-like, though they are far closer in scope to traditional home center warehouses than are the new Lowe’s units.

Lowe’s has spent many months creating a hopefully more efficient retail offering in a challenging real estate environment.  Success could lead to other formats designed to foster growth in other communities with big box aspirations if not spaces.