Large scale versus small sophistication

LululemonIs the future of retail for bricks and mortar reliant on retailers merging their value proposition with relevant services and experiences or more about having the largest, tech-rich store?

Today’s customers are a fickle bunch – with more purchasing options, price points and ways of purchasing than any other age. Retailers locally and abroad repeatedly tout having points of differentiation and providing customers with an experience as paramount to retail success, and this is demonstrated in no uncertain terms by the amount of capital investment being seen globally.

Anthropologie-walnut-creekUS multinational, Urban Outfitters, saw fit to recently open a 30,000sqft (2787sqm) concept store in California for its fashion and homewares chain, Anthropologie. The store features a shoe salon, designer centre and full-scale show rooms full of furniture and décor. The sheer size of such a store and assortment of products available, in tandem with the variety of experiences within the one superstore, perhaps points towards a direct challenge towards the ailing department store format. But it also is indicative of how retailers are approaching store format with a mind to ‘how can I make my customer want to come here?’. It also illustrates the lengths retailers are willing to go to, in order to keep customers who venture to bricks and mortar spaces and keep them there.

Though perhaps not on the same scale as Anthropologie’s superstore, Lululemon and Country Road have also demonstrated the investment being made into store formats and providing spaces that are more than simply a place to stock and sell products.

Speaking to Inside Retail Weekly, Darren Todd, managing director of Country Road, said the opening of the new ‘lifestyle’ concept store at Albert Park in Melbourne, showcased the fashion brand’s rethink of store design over the last year. Key to this rationale, was answering the question, ‘how do we create an setting where customers will feel at home?’.

“It’s about creating an environment that’s warm, welcoming and making people want to spend time in there,” said Todd.

Though not one of the larger Country Road stores, which are usually 750sqm, Albert Park’s incorporation of a cafe with high ceilings abundance of natural light and three different stores gives the fashion store several points of differentiation over a 400sqm footprint.

CountryRoad-AP-interior

Country Road Albert Park

“Whatever we do has got to be right for the brand and ultimately in the business of providing our customers with a great lifestyle offering where the attention then turns to the product, said Todd.

Value proposition relevance

While Country Road has opted for offering coffee to customers as part of a play at its typical customer, fitness brand, Lululemon, has focused on its own relevant value proposition in order to cater to the locale of shoppers frequenting the redeveloped Chadstone shopping centre in Melbourne. With the opening of its largest Victorian store, the apparel retailer has opened a store that takes inspiration from the surrounding community.

“Ultimately we seek to create an experience that mirrors a kitchen party,” Kyle Housman, VP Australia & New Zealand told IRW.

“We all know the kitchen is the place to enjoy the company of close friends with lots of laughs and good fun.

“Chadstone specifically, the store was about creating a sense of ease, relaxation and connection for the entire community.”

Housman said the merging of a retailer’s value proposition with relevant services and experiences was one consideration behind offering yoga classes and community events at the store.

043_LuluChaddy“The future is much more dependent on our ability to authentically connect with our guests regardless of the medium,” he said.

The stores are a space to learn what Lululemon ‘guests’ are passionate about, including how they like to sweat or a goal that they are working towards.

“In terms of our complimentary instore classes, we offer them as a way of introducing a variety of sweaty pursuits – not just yoga – to our communities. They also allow us to elevate our ambassadors and other health and fitness influencers in the community.”

Speaking to Inside Retail Weekly, executive strategy director at The General Store, Matt Newell, said although retail commentators enjoy talking in absolutes, opening a large scale store is not necessarily a prerequisite of success in today’s nuanced world.

“For some retailers, the answer will be larges stores, for others it will be small stores, and for many it will be no physical stores at all,” he said. “What matters is that we keep connecting with customers in meaningful and exciting ways.”

Forcing customers into high dwell time by virtue of store size is obviously going to be problematic, as no one likes feeling trapped. But large store formats create incredible opportunities to create immersive and theatrical experiences.

“The new Samsung flagship in New York [Samsung 837 in Manhattan’s Meatpacking district] is a great example of a retail space that immerses customers in the brand world,” said Newell.

“It’s riddled with VR, which is obviously a big play for Samsung, food, photo booths, inspiring product, live talks, entertainment.

“And it is located at the Meatpackers, surrounded by food and entertainment retailers, not product retailers, so it feels like a more credibly fit in that location. It’s a space that you can spend an hour or so and actually feel energised when you walk out.”

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