Wednesday, January 26, 2011

Open Up Profits Using Stores-Within-A-Store

Fortune magazine reports that major retailers are currently inviting other retailers to set up shop inside their stores. For example, Sears is devoting real estate to fashion trendsetter Forever 21, uniform apparel merchant Work ‘N’ Gear, and Edwin Watts Golf Shops.
     A store-within-a-store (SWAS) is far from being anything novel in worldwide retailing. Many retailers in Chinese cities have long been collections of small shops run by individual merchants. What is different now is how the concept has spread, including from brick-and-mortar retailing to ecommerce. The Fortune article says that nearly 80% of the products purchased through Amazon are sold by other retailers in a marketplace arrangement. The Apple Computer site merchandises ebooks from a range of publishers who decide what to offer and how much to charge.
     Here are two tips to consider as you surf this trend:
  • Select SWAS tenants who are compatible with the store image you want to cultivate. That might be different from the image you have now. Then the SWAS helps you craft a new image. A University of Pennsylvania expert says that in choosing their inside partners, Sears is wanting to move from an old-time reputation to a young-consumer attraction. Researchers at University of Pittsburgh and University of Minnesota suggest you look for an alliance with a retail brand that provides products or services similar to what you do, but one with a brand image that includes strengths in areas where your brand image doesn’t. You’d expect, of course, that your tenant will want your brand image to have strengths where theirs is less strong.
  • Use a SWAS to generate excitement and entertainment for your shoppers. With this in mind, consider arrangements like a weekly shopper’s fair or farmer’s market by your store. Another tenant inside some Sears stores will be organic grocer Whole Foods. In addition, you might continually introduce new and improved items by having pop-up stores run by different retailers. These are stores that remain in business for a very limited time. Retailing giants Target and Walmart have successfully used pop-up stores carrying their own brand. In one case, the Target pop-up was open for only four days. Because your objective is to generate excitement about your brick-and-mortar store and/or ecommerce site, announce the pop-up widely to the media. Do it well and after the pop-up has closed, people will still be asking, “What the devil happened?”
Click below for more:
Prolong Your Reputation as Cutting Edge
Keep a Store-Within-a-Store Compatible
Shrink Brand Alliances When They Contaminate

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