Is concept store future of retail?

10 December 2014

As consumer shopping habits change at a breathtaking speed, retailers double their efforts to innovate beyond the walls of their bricks-and-mortar stores. A growing number of brands are not afraid of experimenting and re-imagining the physical store. These innovations gave rise to a concept store - a space where virtual and physical worlds meet.

All brick-and-mortar stores dread their powerful competitor – Amazon, which can sell almost anything, deliver it on the same day, and it is cheaper than any other option. But instead of having a paralyzing effect, this fear of online competitors inspired physical stores to come up with truly innovative solutions. A great example of a promising retail experiment is currently conducted in New York’s Chelsea neighborhood. Concept store Story is mash-up of a store, magazine, and gallery. Every six to eight weeks the retail space is rebuilt from scratch around a theme; New York Story, Love Story, and the current Cool Story are a few examples.

The art of storytelling

The concept of Story derives from media world. Similarly to a paper magazine where content is re-designed every month, retailers curate their merchandise and get a brand to sponsor it. For example, if a month's theme is "cool", then products on sale in the store, such as clothes, jewellery and gadgets, will match that. A shopping experience that is reinvented every few months creates forced scarcity and drives demand. A well-told narrative engages consumers better, and provides a rationale for brands that goes beyond selling. In Cool Story, the theme is about keeping cool in a New York Summer but also stretches to “cool” as in innovative. Epitome of both, an air conditioner Aros (from GE and Quirky) that maintains an optimal temperature by tracking user habits is available in the store.

Story generates revenue not just through the products on sale but also through the fees it collects from its partners. Sponsors of a "story" can pay $75,000 to $500,000 to participate, depending on the level of service. The partnership between a brand and the concept store can be used as a form of research and development, but it can also help the brands create content or launch a new product on the market.

Local flavour

A concept store that knows how to use technology effectively can close the gap between digital and physical. Apart from solving the problem of attributing online marketing to offline sales, a concept store can also help the firms combine branding with direct-to-customer sales.

A good example comes from Nestlé which opened a KitKat concept store in Japan. The world's first KitKat store sells customized versions of the chocolate sold nowhere

else in the world. One new snackbar, which is quite a hit in Asian countries, is called Sublime Bitter. It is made by hand, so only 300 bars a day are produced. Located in a Tokyo shopping mall, the Chocolatory sells other exclusive and unique products, such as Special Sakura Green Tea. According to Nestle's bigwigs, such unique products tap into the Japanese custom of buying thoughtful gifts for people and help KitKat build an emotional connection with the consumer by reinforcing positive emotions around the brand. The concept of the single-product chocolate shop is a growing trend, with boutiques such as Mars's M&M's World opening up in the USA and the UK.

Sources: http://www.forbes.com; http://www.theguardian.com; http://www.mirror.co.uk, Photo: https://www.flickr.com/photos/puenteaereo/