The shop within a shop trend is gathering pace in retail as brands seek to increase footfall while sharing costs with non-competitor partners.
Why introduce a shop within a shop?
All retailers want to attract new customers by entering new markets but there are challenges in trying to be a jack of all trades, selling multiple lines.
Large stores that have tried to diversify and sell a wide range of products have found they do not always have the expertise to source, display, demonstrate and sell specialty products that are not core to their brand. Given that modern retail is all about delighting customers, these stores know it is hard to compete with specialist retailers with knowledgeable staff, immersive brand experiences and access to a wide range of stock.
At the same time, though, those who do not diversify find themselves forever hunting for new sales in the same categories. This is why one of the biggest recent trends that is starting to change the face of retail is shops within shops. Two retail brands operating in different markets find that by combining forces, or at least being co-located, they can overcome many of today’s retailer challenges.
Set against the backdrop of surging energy prices, one of the big advantages is that stores can share the cost of, quite literally, keeping the lights on. Additionally, neither stores need to invest in setting itself up to source and merchandise non-core stock, leaving it instead to the better-known brand in that category.
Attracting new customers
Perhaps the biggest advantage, though, is the ability to attract new customers through increased footfall and cross-selling opportunities.
This is certainly what lies behind Asda’s inviting French outdoor and sports retailer, Decathlon, to set up stores within its supermarkets. These have gone beyond a click and collect operation for online orders. Several locations now feature full Decathlon stores co-located within Asda.
The original idea was to also to make use of the huge retail spaces Asda has at its disposal. By bringing in a non-competitor, both brands are able to share costs and win each other new customers through planned trips or by eye-grabbing merchandising that pulls in people who realised they needed a new raincoat or hiking boots when popping in for the weekly grocery shop.
It is a similar story with Sainsbury’s partnering with Argos and Habitat. The supermarket chain owns both brands and so there is no concern over competition among sibling companies. The first large trial came with small Argos stores within Sainsbury’s outlets. The idea proved so successful that the business is now on a plan to roll out 300 Argos stores within its supermarket portfolio.
The success has also led to the chain putting 10 Habitat stores within its supermarkets.
As with Asda and Decathlon, the idea is that customers shopping for groceries at Sainsbury’s may decide to buy general products at Argos or perhaps browse for new homeware items at Habitat. Likewise, somebody shopping for new homewares may decide to buy their groceries as part of the same trip.
It is a similar story in France where hypermarket operator, Cora, has partnered with clothing retailer, C&A, to offer consumers a fashion store within its Val d’Yerres location. The same hypermarket also features an electrical store operated by Rowenta.
In America there is another glowing example of this trend for stores to live together and cross-pollinate with Lowe, the home and garden retailer and pet store, PetCo. Clearly, the two brands cater for the things closest to their customers’ hearts and so it makes sense they can shop for both home and pets under the same roof.
Digital brands going physical
An interesting insight into where this could be taking the retail world was seen pre-covid in Wolverhampton and more recently in France.
Online retailers clearly lack a physical channel through which they can serve and better understand customers and so many have been considering physical stores, although few have the purchasing power of Amazon to set up a store on their own.
Hence, in May 2019 eBay opened a pop-up shop for 40 of its online merchants to sell through a physical store. The brands range from hampers to house blinds and the trial was considered a success. And then the pandemic happened.
In France there are also encouraging and ongoing trials of digital native vertical brands (DNVBs) partnering with physical stores.
Carmila (Carrefour Group’s shopping centres) has launched the DNVB Ready prize which offers winner support in setting up a shop in a Carmila shopping centre, worth €100,000. The coat brand, Flotte, is the first winner and has already set up its first shop-in-shop.
There are earlier examples of brands who understand the importance of the physical point of sale. In 2019, the Printemps group dedicated a space to digital brands, including Misbhv, Chylak or Rotate. My Jolie Candle opened its first physical shop in Paris in 2017 for the Christmas holidays and then, in 2021, the brand was selected to integrate the second Marquette concept store — dedicated to the most beautiful brands found on the web — in the Cité Europe shopping centre near Calais.
This move from the web to the high street is clearly a trend to watch out for as online firms seek growth beyond digital channels to create physical connections with their customers. While the shop-in-shop concept has so far typically seen traditional retailers form a mutually beneficial partnership, it is clear this is going to be extended to include providing a human face to the online brand shoppers love interacting with online.
Credit: Valentina Candeloro, International Marketing Director, Mood Media
