A shop in a shop – a simple guide to retail concessions
They say the customer is always right, and as painful as it may be to agree, when it comes to expectations of their shopping experience, this saying is all too often true. From online to instore, consumers expect a seamless, integrated experience that will delight them, and failure to deliver this means you will lose their custom to a brand that is embracing this.
While department store concessions have been around for what feels like forever, we are now starting to see the concept of physical retail partnership emerge, where brands are co-existing in the same space to offer an enhanced experience for their collective customer base. From increased spend and footfall to a more time spent in store, the benefits of this approach are really starting to stack up.
What is a retail concession?
In simple terms, it is when two brands cohabit within a single retail space. Unlike department stores where space is allocated out to multiple brands all under one roof, the evolution of this trend now sees a lead brand supported by a smaller, non-related but complimentary brand. Think Next and Paperchase, Sainsburys and Argos/Habitat or anywhere that has a branded coffee shop space within it!
Our recap of the retail sector in 2018 might be of interest
Why should the high-street be thinking about concessions?
Retail concessions are a fantastic tool for experimenting with the market and so for many brands who are mainly in the online space, the option to have a pop-up store or temporary concession opens up a whole new route to market without having to invest wholesale in a physical retail presence.
For high-street brands looking to mitigate the risks and challenges of a hugely turbulent and fickle market, as well as navigate the latest consumer demands for their shopping experience, concessions offer them access to a whole raft of brands. As well as adding the ‘cool’ factor, a well-thought through partnership will offer a more authentic shopping experience that demonstrates your commitment to experience, as well as sales.
Space, particularly if you have lots of it that isn’t being utilised properly, is key to making a concession work and can be a real win if you are prepared to think a little differently. Many large retailers no longer need as much physical space thanks to online; local storerooms have been replaced by largescale warehouses where goods can be ordered and delivered within a matter of hours, so the availability of space means it’s likely it can be working harder for you.
Concessions as part of the omni-channel experience
We are increasingly in a situation where online is king. For many shoppers, it’s likely that some part of their experience has been online, whether it be inspiration, research or purchasing to collect from a physical store.
Technology and evolving consumer expectations are forcing change in the way retail delivers and so as part of this journey, it makes sense to consider the split of online and offline, and for the latter, what form this needs to take. For newer entrants into retail, we’re often seeing a very small physical store presence backed up by significant online presence across their own website and social media and then complemented by pop-up stores and concessions in similarly aspirational but non-competitive brand environments. This model is more cost-effective while at the same time keeping an element of aspiration and exclusivity to the brand, which feels like a win.
What makes a good concession (and who’s winning at it?!)
Location is key: both the location of the host store and the space being offered to the concession matter. Footfall is key and so careful consideration should be given to a location that may be more cost-effective but lacks the accessibility of the high street. The flow of the host store is also important when considering the concession placement matters too – it’s important to punctuate the customer journey in the right place for maximum impact and spend!
Design: we know that experience matters so invest in the design of your concession to make sure it stands out. Think lighting, atmosphere, decoration and clever displays to give you the edge.
Products and displays: your concession is no place to scrimp on the products you have on display. You’ll have less space to play with but you want maximum exposure of your chosen products so think carefully about how best to play with the space and latest innovations in store display systems (we’d be happy to help!)
Aspirational appeal: concession stores often have an air of exclusivity about them, giving customers something they couldn’t otherwise easily purchase or get access to. Be as creative as you can, from limited edition goods to guest personalities to help build your brand. And don’t forget the power of social media here too – a positive and engaging campaign could be the difference between average and amazing performance.
For those thinking about the retail concession route, either as a long-term investment or series of pop-ups, it’s now tried and tested so there’s lots of experience out there you can benefit from. At Sigma, we have most recently worked with the Sainsburys and Argos partnership, helping them create a store in a store. We have collaborated to ensure that within the Argos concession, there is a real focus on a simple, efficient customer experience by utilising digital purchasing systems and self-serve payment options, as well as making sure there are always shop assistants on hand for those who want some extra support. It’s a large-scale programme over two years that has seen us work with our supply chain to design and produce a number of bespoke display elements, but both brands are already seeing the benefit as are, most importantly, customers of both.
Time will tell whether these retail partnerships will themselves be the architects of some smaller brands disappearing from their own stores and only ever appearing as concessions. One could argue, however, that these brands are simply responding to customer desires and rather than admitting defeat and closing all of their stores, they are adapting and evolving to survive in todays competitive climate.
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