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The New Retail Frontier - Adding Locations Is Just One of Many Options

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Since the beginnings of chain retail, it’s been a given that if your brand is doing well enough and you want to keep it growing then you’ve got to keep opening more locations. More locations means more sales, a wider circle of influence, increased brand recognition, more purchasing power… it all makes a lot of sense.

Even today, with technology innovation redefining how we buy almost everything, thriving brick-and-mortar businesses looking to expand are absolutely going to want to open more locations. I don’t see that changing anytime in the foreseeable future either.

But, and here’s the thing, opening entire new locations isn’t the only way to increase sales, widen your circle of influence, increase brand recognition, and grow your brand’s purchasing power… not anymore.

Opening new stores is a great big investment and it’s one that doesn’t always pan out, no matter how much research you crunch ahead of launch. Look at Target Canada. Now, in my humble opinion, Target is a brand that sets the bar for endless emulators and honestly does almost everything right. They’re setting the pace of retail evolution when it comes to category blurring, fresh-prepared, co-branding, e-commerce, and just about every other aspect of retail today. But in the case of Target Canada, they took a calculated risk, invested a lot, and decided to close the doors before they lost their Merona shirts.

Target can afford to cut and run, shake it off, and maintain its status as a mega-retail leader. For smaller operators, whether it’s a grocery chain looking to grow market share while shrinking its standard store size or a hotelier focused on creating a more consistent chainwide experience that also keeps guests around for on-property breakfast, there are options to grow a brand’s footprint today that didn’t really exist a decade or so ago. In my mind, these options can be boiled down to:

    -  Store-Within-Store
    -  Boutique-Within-Store
    -  Pop-Up Shop 
    -  Mobile Retail 
    -  Kiosk
    -  Vending Experiment

I’m going to briefly outline the benefits of each of these alternatives to traditional retail expansion. What I like about each of these is that they serve as a smaller format test kitchen of ideas that, if they work, should absolutely be rolled out on a larger scale. But the risk is smaller. The ability to get experimental, try something chancy, and potentially even expand the boundaries of what your retail brand provides, is more easily attainable in each of these formats. In short, they can be a lot more fun and a great stepping stone on the way to a larger brand expansion.

Store-Within-Store

Opening a micro-version of your store within another brand’s larger store is a great opportunity to create a win/win/win situation for you, the company you partner with, and the customers who appreciate being able to visit both locations in a single visit. A great example of this is the over 485 Sephora stores located within JCPenney locations around the US. In suburban locations where a large, standalone Sephora may not make feasible sense and where stores like JCPenney still enjoy significant foot traffic and brand loyalty, this partnership makes a lot of sense and bolsters both brands. JCPenney also straddles the line between Store-Within-Store (you’re operating your own location inside another retailer’s floor space) and Boutique-Within-Store (you’re licensing your brand or operation to the host brand – such as JCP’s operation of “Disney Shops” in hundreds of its locations).

Boutique-Within-Store

Allowing a partner retailer to present your brand in a designated, high-profile section of their space is another way to get more consumer eyeballs looking at you and hopefully buying what you’re selling. And if you have a target demographic you’re hoping to catch the attention of and identify a non-competitive retailer that already owns a significant portion of that demographic’s loyalty, then this option may be a great one for your expansion model. Starbucks inside of most major grocery chains in the US is a great example of sophisticated licensing agreements to create boutique-within-store environments targeting the consumers most likely to affect all household purchases: grocery shoppers.

Pop-Up Shop

Because of their transitory and often event-based nature, pop-up shops are arguably the best option for a retailer looking to kick its current look and feel to the curb in exchange for a bespoke theme or experimental format. Not only do the over-the-top designs and developmental formats that often go hand-in-hand with a pop-up store lead to a high energy experience for shoppers and lots of great PR, they also allow retailers to kick the tires on concepts they may be considering for larger standard rollouts or next-gen brand evolutions. And not all pop-ups are wacky spaces made of neon duct tape and repurposed shipping containers, plenty are simply small format, stylized interpretations of what a brand’s already doing online and in-stores, made to order for SXSW attendees, film festivals, New York Fashion Week, or just in time for holiday shoppers in big cities around the globe. Zappos’ Las Vegas pop-up just in time for the holidays last year is a great example of an insanely successful online retailer looking to expand its IRL footprint and boost sales via a well-designed and well-timed pop-up in a high-traffic, high-exposure location.

Mobile Retail

The food truck movement has paved the way for consumer acceptance of mobile retail and has generated mass amounts of inspiration imagery on Pinterest. Expanding your brand space to a truck, cart, or bus and taking it on the road (or to college campuses and local events) has become a hot option for chef’s looking to verify consumer response to new food concepts; retailers looking to take the temperature on new neighborhoods, cities, regions; and sellers looking to proactively bring their wares to the shopper versus passively hoping for the opposite. Service retailers, specifically, should be looking at mobile retail as an opportunity to get in from of target customers at the street level, during their lunch breaks, at the public events they’re attending, and otherwise on their own turf. The necessity to trick out these carts, trucks, etc. to function as-needed leads to incredibly interesting design translation when form meets function - and the still relative novelty of this format assures your mobile space will create a decent amount of buzz and catch lots of eyes as it travels from wherever it is today to wherever it’s going to be in a few hours. And for what it’s worth, social media technology has made it incredibly easy to communicate just where you’ll be and what you’ll be selling with your core customers in real-time. All good things.

Kiosk

As far as kiosks go, there are really two categories: digital and manned. Digital kiosks look great on paper, they don’t require a human presence, they’re automated, they require minor space, and you can replicate them into many environments. Done right, a digital kiosk could be a great option for brands selling e-goods or looking to integrate a kiosk presence with an already strong online or app-based presence. However, done wrong, which is often the case, digital kiosks are viewed by consumers as clunky and non-intuitive. On the flip side, expanding via manned kiosks, such as can be found in airports or the mall’s center aisle, may be an excellent way to bring your top-selling and newest products to consumers in a slimmed down format that allows for quick modification and gets the word out to shoppers who may otherwise not find themselves in a face-to-face interaction with your brand.

Vending Experimentation

While this is territory just barely being charted by some adventurous retailers (Sprinkles Cupake ATM comes immediately to mind) there are quite a few appealing elements to the concept of creating a proprietary vending experience and placing machines in targeted locations. The idea is new enough to be disruptive which means you’re going to catch the attention of potential customers and stick in their minds. It’s like a micro pop-up shop which, if it works out, could easily become a permanent fixture. If your vending experiment looks interesting enough, it’s just the type of guerilla marketing that could end up on social media with @s, images, and hashtags doing a decent amount of marketing for you. The difficulty here is almost entirely logistical – figuring out who is stocking the machine at what frequency and with what product, ensuring a secure location, etc. But, for those retailers brave enough to take the vending plunge, the ROI in terms of brand presence and increased sales could be significant.

Many of these concepts blur into each other. Pop-up shops can certainly take the form of a manned kiosk, in-store boutique, or mobile retail unit. Vending machines with sophisticated functions are digital kiosk-like in many ways. Etc. But the appeal of any interpretation of the above is clear: retailers have significant options to expansion that go way above and beyond opening more stores. Alternative store forms can allow for design experimentation, reduced operations costs, and an ability to test kitchen just about any crazy idea your team brainstorms that just might grow your business.

It’s also important to keep in mind that no matter what form your expansion takes, a basis in a strong brand standard will help to ensure that your every experiment is serving to build up your core brand recognition with your intended audience and ultimate drive your sales.

Food for thought: You don’t have to invent something brand new in order to think outside the box. What’s already out there that’s working? Can you take that to the next level? Do you need to? What’s going to work for your brand (your existing locations, your new locations, your operational infrastructure, your corporate culture)? What won’t work? And finally, what’s stopping you? Don't let it.

KRS designs retail spaces for some of the most successful brands in the world. We're creative. We have fun. We're always looking for fresh perspectives. Everything inspires.

We take a holistic approach to each project, building on our clients' strengths and creating new growth opportunities. KRS-designed environments connect with the customer, make a lasting impression, boost brand image, and drive sales. We're award-winning designers. We're a leading brand consultancy. We maximize the customer experience to increase your sales.

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