Store-within-a-Store: The Next Stage of In-Person Retail
Recent conversations about brick-and-mortar retail stores focus on the feared retail apocalypse – the death of traditional shopping. Fortunately, the industry is constantly evolving and end of physical shopping hasn’t hit us just yet. Retailers are always looking for ways to innovate against retail apocalypse and take back some of the market share captured by e-commerce.
Companies like Amazon have forced brick-and-mortar retailers to explore creative ways to attract customers and make the shopping experience more convenient and enjoyable. And one of these ways is the store-within-a-store model.
Like the name suggests, having a store-within-a-store is when the retailer acts as a host, allowing one or more other brands to operate independently within the store. While the store-within-a-store model is not limited to big-box retailers, many brands work with companies like JC Penney, Nordstrom, Target, and other top retailers in the company. The partnership between brand and retailer is a mutually beneficial one that helps both parties increase revenue and grow their market.
Benefits of Store-within-a-Store Partnerships
Store-within-a-store retail gives brands the power to manage their own inventory, determine the prices of their products, and independently develop their own marketing campaigns. Moreover, this model also helps brands save money by removing much of the overhead it costs to run an independent store. If the host retailer generates a lot of foot traffic throughout the day, brands within their store wind up selling more products than solely operating out of a standalone store.
For some retailers, the store-within-a-store model is a great way to revitalize an old, aging brand. Shoppers enjoy the store-within-a-store model because it maximizes convenience, encourages variety, and creates a new shopping experience. In-store concessions, for example, let customers accomplish more at one location rather than spending the day going from store-to-store in order to get all their shopping done. Just think about how convenient it is to buy your clothes, get a new pair of glasses, and grab a cup of coffee…all from the same store.
Tried and True
If this idea sounds familiar, it’s because you have probably seen the store-within-a-store model in some form or another. One of the first industries that the store-within-a-store model was explored was grocery stores. To create a more convenient shopping experience, grocery stores began to integrate pharmacies within their stores. Because prescriptions regularly need to be picked up, much like groceries, many customers would go grocery shopping when it came time to refill their prescriptions.
Check out retailers currently following the store-within-a-store model:
Sephora and JCPenney
Since 2006, cosmetic retailer, Sephora, has been running in-store kiosks in participating JCPenney stores across the country. What initially started as a small project that targeted a handful of JCPenney stores has been extended to almost 650 of the 875 JCPenney stores in operation.
The partnership between JCPenney and Sephora has been mutually beneficial for both parties. Not only did it help JCPenney expand their influence in cosmetics and other beauty products, it also gave Sephora a platform to connect with new, smaller markets than they historically catered to.
Best Buy, Samsung, and Sony
While other big-box retailers felt the pressure of online shopping over the past couple of years, Best Buy continued to come up with creative ways to thrive in the age of online shopping and last-mile delivery. In 2013, Best Buy adopted the store-within-a-store model when they launched their partnership with Samsung, known as the “Samsung Experience.” This partnership placed 1,400 in-store Samsung centers in participating Best Buys. In fact, the partnership worked so well that Best Buy expanded the in-store model to include Sony the following year.
In a creative twist, Best Buy even included its competitor, Amazon, into its store-within-a-store business model. Determined to capitalize on the popularity of smart devices, the big-box electronics retailers included two special in-store kiosks devoted solely to Amazon Echo and Google Home. Instead of simply promoting Google and Amazon’s smart devices, Best Buy used these in-store kiosks to educate customers on how to pair Echo and Google Home with other popular items sold at Best Buy, including HD light bulbs and smart home electronics like thermostats and televisions.
While Best Buy’s partnership with Amazon and Google wasn’t a traditional store-within-a-store project because it was run completely by Best Buy employees, it is a great example of how partnerships between competitors can be mutually beneficial. It’s unlikely that a customer would go to Best Buy solely to purchase Amazon items — they can easily do that without leaving their home. Integrating Amazon and Google items with their own stock and product expertise created an engaging customer experience that led to increased sales.
Macy’s and Starbucks
Macy’s was one of the big-box retailers hit hard from retailpocalypse. Reeling from the loss of approximately 15% of their store base, Macy’s decided to move away from traditional retail stores and worked to create in-store experiences that attract customers. One of the ways that the retail titan has been able to hold onto a large portion of its market share was by partnering with Starbucks to embrace the coffee shopping trend. In an attempt to turn stores from shopping centers into community hubs, Macy’s began adding Starbucks coffees into various store locations where customers can buy clothes, grab a quick snack, and sit down and enjoy a cup of coffee.
Macy’s is even experimenting with integrating full-fledged restaurants into their stores in hopes of attracting hungry customers while also catching the eye of restaurant-goers.
Is the Store-within-a-Store Model the Future of Retail?
Store-within-a-store retail is more than just a fad – it’s part of a new generation of shopping known as experiential retail. Instead of focusing on stocking shelves and selling items, pop-up shops and in-store kiosks provide customers with meaningful experiences that they aren’t able to experience when shopping online.
The versatility of this model gives retail stores and storekeepers the opportunity to service different market segments, create a more comfortable shopping experience, and introduce new and exclusive products.
Working with Erply to set up a store-within-a-store model
Selling products in another retail store can be easier said than done. Before you set up within another store (or vice versa), it’s important to consider that some retailers have specific standards in terms of hardware requirements, restocking, or integrating outside inventory in their own systems. A key component of Erply’s retail software is flexibility, so you can run a store-within-a-store model that satisfies both parties involved.
Here are some common roadblocks that come with the store-within-a-store model and how Erply can be used to keep your business running smoothly.
If you’re setting up in another retail store, it’s possible that the host store may not want to add your inventory into their POS system. This can be especially true if your store requires a high variety of products to keep stocked at once. Managing your inventory with Erply lets you and your host store track and report inventory independently from one another. Let’s say instead that the host store prefers your inventory to be added to their system. Erply allows you to export inventory data into a .csv file so it can be easily imported into other POS solutions.
Erply’s cloud-based solution lets you remotely keep track of your inventory levels, no matter how many locations you have set up. You can even pull inventory reports from specific stores, making it easy to identify purchasing trends for your products sold within other retail stores. If you want to keep your remote store well-stocked but don’t want to track specific inventory levels, Erply can automatically send or transfer inventory when stocks get low.
Do you want to sell another retail store’s products within your store but don’t want their inventory listed in your reports? With Erply you can create product groups so you can filter out information that you don’t need from your inventory reports. Reports can be generated to include certain product groups and exclude others.
Hardware and Software Limitations
Erply is hardware agnostic, meaning that it’s web-based and can be run on virtually any hardware. If your host store requires that a certain printer, card swiper, or other piece of hardware be used, Erply will bridge the gap so you can set up within their store with without the hassle.
Say you’re given the opportunity to sell your products in a large retail store, but that store uses a POS that isn’t Erply. You’re in luck — Erply is flexible and can be loaded onto a tablet or mobile device. Your store can operate smoothly while your host store runs the business as usual, even if you bost use a different POS.