Why the Future of Successful Retailing Involves Stores Within Stores

Amid the shock and fear of the pandemic, shoppers stayed indoors, developing digital buying habits and bypassing their old brick-and-mortar haunts. But consumers have gotten a taste for in-person shopping again. This comes as a relief to many brands that know customers return less and impulse buy more when they shop in-store.

Despite this silver lining, many retailers are struggling. Consumers still prefer to shop online for many items, and their expectations and demands have increased after being limited for so long. In order to boost in-person traffic and capitalize on existing opportunities, retailers have turned to an interesting solution: shops within shops.

Why is Retail Turning Toward a Shop-in-Shop Model?

The concept of shops in shops has been around since the dawn of retail, so why is it gaining traction now? Well, a store within a store holds many benefits for consumers, retailers and brands. Shop-in-shop concepts can be thematically strong. They can easily be updated for different seasons and marketing campaigns, making them a great place for brands to test out new ideas. Additionally, the shop-in-shop model provides a halfway point between brands’ e-commerce and in-house spaces. It gives them a physical presence while limiting their real estate risk, allowing them to learn from new locations and audiences.

Partnering with brands allows retailers to foster audience excitement and boost sales while still controlling their individual outlets. Consumers can browse more merchandise while retailers take advantage of broader audiences. Well-known retailers are also learning that establishing smaller, satellite footprints in other stores can strengthen their brand presence more effectively than investing in new real estate.

Brands and retailers can also form partnerships that go beyond housing arrangements. Take Petco and Lowe’s, for example. The two retailers formed a partnership whereby Petco stands appear in Lowe’s stores, diversifying Lowe’s product selection, offering customers something they might need, and cross-pollinating both brands’ audiences.

5 Best Practices for Creating a Successful Store Within a Store

Whether brands are looking for new audiences, more exposure or increased sales, sharing space could be a wise move. Here are five strategies for brands to consider as they begin looking for potential partnerships:

1. Look for a complementary fit.

Brands that don’t relate well to each other won't make good partners in a retail space. An ideal match occurs when the products complement one other, like Petco’s animal care products and Lowe’s home care merchandise. Imagine stores within stores as different stops on the same journey. They add value to customers’ carts rather than distracting them.

2. Prioritize interactivity.

Shop-in-shop models work best when they give consumers extra opportunities to see, feel and even demo products. Retailers and brands should consider how they can create spaces that are educational for consumers. For instance, what would consumers need to learn firsthand about the different uses of a product? Or what would a space showcasing different options look like?

3. Have fun with the presentation.

Brands can use lighting, sound, video and color to set themselves apart from others they share the space with. For example, big blocks of color could break up the monotony of a formal space, or artwork could draw consumers’ attention while differentiating the shop within a shop.

4. Focus on providing great customer service.

Customers are expecting a lot right now when it comes to service and convenience. They need their in-store experiences to be even better than their online ones. For example, when Target partnered with Apple to host mini Apple stores, it focused on training staff to deliver the service and expertise that Apple customers have come to expect.

5. Work collaboratively with retail partners.

A partnership should be a mutually beneficial, collaborative process between the retailer and the brand. How much money does the brand want to spend, and how much space is the retailer willing to give up? What are the brand’s goals for traffic and placement? What are the retailer’s goals for sales volume?

The shop-in-shop model is nothing new, but it has emerged with a fresh face in the wake of the pandemic. It offers consumers, brands and retailers an opportunity to get the physical retail experience they’re looking for with more product selections and lower investment risks.

Bob Marsh is the chief revenue officer at Bluewater, a design-forward technology company that helps craft moments that connect and inspire. Specializing in retail technology, displays and fixtures, as well as AV integration and event tech services, Bluewater works with top brands like Walmart, Ford, and Rocket Mortgage.