For brands like Samsung, this means a retail outlet that in the
past would have been designed solely to drive purchases in the
moment can now function entirely as a brand advertisement. These
concept stores allow customers to test products, interact with
associates and, ideally, better understand the ethos of the brand.
With real estate costs at a premium in key urban areas, the sites
also allow a retailer to better use every square foot and not waste
precious space on on-site stockrooms.
"Customer experience is becoming more influential in shaping
people's expectations," said Denise Lee Yohn, a branding
consultant, noting that such stores function as intensive,
immersive storytellers that can convey a brand's history,
attributes and future vision. "It's allowing the brand to say more
about itself than just saying, 'Here is this product.'"
Many other marketers are toying with the model. Beneath a
regular store in San Francisco, Target operates an Internet of
Things concept store that functions as a learning lab for shoppers,
while Reebok combines a CrossFit gym with its retail offerings at
its FitHub stores. Amazon has brick-and-mortar pop-ups for its
products. Even fashion designers are leaning toward more
experiential locations and less in-store stock. In March, Tory
Burch opened a store for athletic-wear line Tory Sport; the space
hosts yoga classes and features a central interactive display where
visitors can shop, play games and view curated looks.
Making a store into more than a store is not a new strategy.
Mattress and furniture sellers have long had showrooms where
customers can try out merchandise they won't carry home that day.
More recently, native e-commerce companies such as menswear brand
Bonobos and eyewear marketer Warby Parker
have opened brick-and-mortar locations stocked only with samples in
an effort to advertise beyond the internet while avoiding the cost
of on-site stockrooms. By this summer, Bonobos expects to have 22
locations where consumers can browse and try on samples, up from
one such "guideshop" in 2011.
"People still like to touch and try on items before they buy,"
said Erin Ersenkal, chief revenue officer at Bonobos. "We realized
we could only showcase our assortment. Customers didn't need the
immediate gratification of walking out with their purchases."
While operating such a store might seem less lucrative, some say
the opposite is true. Store associates are more readily available
to discuss products with customers, which could lead to more online
sales, and they need not worry about restocking inventory or
backroom activity. Concept stores could reduce labor and
merchandising costs by as much as 30%, according to experts.
"Initially, the idea was very cost-focused, but more and more,
we are seeing this actually has a much bigger impact on enhancing
the brand," said Adheer Bahulkar, partner in the retail practice of
consulting firm A.T. Kearney. "They're able to create a unique
brand experience without the clutter."
Marketing typically takes the form of visitor word of mouth in
social media, which can be more engaging and authentic than
traditional ads. At Samsung, for example, in-store events such as
an Oscars viewing party, a live-streamed concert during South by
Southwest and an evening with LeBron James filled up in a matter of
minutes or hours, said Mr. Overton. Two years in the making, the
store employs between 12 and 20 trained associates on any given
day, depending on the event schedule and other factors, and
showcases hundreds of products.
Some experts predict shopping and lifestyle will continue to
merge, letting consumers increasingly work, shop and play in the
same locations. The strategy also paves the way for retailers to
collect more data from shoppers.
"Traditional retailers have no choice but to start gravitating
toward this model," said Mr. Bahulkar. "In the long run, their
ability to compete really depends on their ability to replicate