Commentary by Jonah Bloom

Apple, Hershey, Song Turn to the Power of the Retail Experience

Showcase Shops, Pop-up Stores Are Marketing Not Just Profit Centers

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If you need justification for your next shopping trip beyond your usual musings that consumer spending is important for economic recovery; that a flex-the-plastic high sometimes outlasts buyer
Jonah Bloom, executive editor of Advertising Age.
remorse; and that those slacks really don't belong in this century, you might like to use the excuse that you are researching some of today freshest marketing strategies.

Showcase shops
With big marketing embracing the need to go beyond traditional media to influence consumers -- witness Burger King tapping touchpoint gurus Crispin Porter & Bogusky -- a handful of savvy companies are discovering what high-fashion has long known, that a showcase shop is as much marketing tactic as profit center.

Hershey's first and only store in New York's Times Square is a classic example. Created with help from Ogilvy & Mather in late 2002, the store sits under a 16-story outdoor spectacular advertising 15 of the company's biggest brands, and it's full of interesting and interactive candy displays. Hershey does not break out figures for the store, but given its costly location it's unlikely to break any profit records. It has, however, become a mecca for choc-heads and brings the Hershey brand to life in a way an ad campaign never could.

Photo: Hershey's
Hershey's only store is actually a Times Square advertisement that you can walk through.

Apple has gone even further in defining its brand through 73 retail outlets (including high-profile stores designated for marketing purposes) in major cities all over the world. The stores attracted 25 million visitors last year, earned Apple 10% of its total sales and turned a modest profit.

Apple success
More importantly, especially as Apple could have used resellers or relied on its more cost-effective online store, the outlets bring in new customers and round out the brand. With kids' areas, Genius Bars, demonstration centers and funky interiors, the stores turn Apple into a cool-but-accessible club. The tactic seems to have worked: Apple claims 40% of people purchasing systems in the store are new customers.

But the most intriguing recent retail venture was the decision by Delta start-up airline, Song, to open a store for six weeks in New York's SoHo.

What do you put in 2,700 square feet of airline store? Song collaborated with American Express, Coca-Cola, Disney and Microsoft to create a surprisingly busy space. It featured a section of airplane complete with leather seats and Song's 24-channel, video-on-demand, in-flight TV; an Xbox gaming area; a food and drinks bar; a travel planning desk with a host of laptops; and a retail section selling wares from Disney, Coke and Kate Spade.

Photo: Apple
The Apple store on North Michigan Avenue in Chicago.
When I visited it was packed. The bar was doing a swift trade in Dasani, dads grabbed seats and travel mags, snarling 12-year-olds shooed ancient folks (me) away from the Xboxes and 20-somethings tapped away on the laptops.

2,000 visitors a day
Judging by the comments of the milling crowds, the store, said to have cost Song and partners around $2 million, created a number of instant advocates. It attracted an average of more than 2,000 visitors a day, not including the hundreds who packed the place on event nights -- and many booked flights and Disney holiday packages while they were there. PR around the store -- articles in several national pubs -- added to its marketing value. More than that, however, the store created a brand personality, a mildly chaotic but friendly and fun one, to go with what had been little more than a name.

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