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The UPS Store Is Looking to Redefine the Word 'Store' The franchises's key to growth: stores within stores.

By David Zax

This story appears in the January 2018 issue of Entrepreneur. Subscribe »

Courtesy of The UPS Store

When is a store not a store? It sounds like a Zen koan, but it's actually the key to The UPS Store's new strategy for franchise growth. The UPS Store, says VP of franchise development Chris Adkins, is striving to redefine the notion of a "store" entirely.

Related: 5 Affordable Franchises You Can Start for Less Than $10,000

The company launched its "store within a store" concept in the 1980s -- enabling freestanding versions of itself to be set up inside hotels, convention centers and so on -- but it reengineered the concept in 2016 to offer even smaller footprints inside places like pharmacies. Then, last May, The UPS Store further loosened several requirements (like no longer needing to install mailboxes) to make the model even more flexible. The result was a "dramatic" reduction of the cost to open a store -- sometimes as much as 83 percent -- and an increasingly appealing option for business owners of all kinds. Store-in-store represented about 10 percent of the company's new unit sales in 2017, and it hopes to double that this year.

Related: The Most Powerful Brands in Franchising

One recently opened store-in-store location can be found in the corner of a Brooklyn pharmacy, itself only about 800 square feet. Adkins says it's "so small, you may even miss it." But he recalls the pharmacy owner saying, ""You know what, I don't care if I make a fortune on this, because now I am everything to everybody in my community.'"

Related: The 6 Most Common Franchisor Mistakes

Now The UPS Store is looking at other ways it can plug into existing spaces. The company is currently piloting an idea to serve universities in partnership with a tech-­savvy "smart locker" company called Luxer One. Students receive less and less mail but still get care packages from doting parents (not to mention discounted textbooks from Amazon Prime Student). One UPS Store/Luxer One pilot is active at Belmont University in Nashville, where Luxer's technology tells The UPS Store's employees which locker to stash packages in, then sends students an access code to use on the locker 24/7. "No more waiting in line," says Adkins.

For more on franchises, check out 2018's Franchise 500 list.

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