By Joseph Bona
Consumer product manufacturers have historically focused on just one type of “real estate” — namely, that relatively small amount of shelf space where their brands jockey for attention in the store. But over the past few years, a few manufacturers have been doing deals with landlords to launch spacious retail stores focused exclusively on brands like Chobani Greek Yogurt, McCormick seasonings or Spanx hosiery. Is the goal here to dive into commercial real estate and blanket the country with storefronts along the lines of a Dollar General or a Walgreens? Not likely. However, by opening retail stores focused exclusively on their brands, these companies do stand to accomplish something important: Deepening their connections with consumers.
When Chobani launched its New York City yogurt store back in August 2012, it created a kind of church dedicated specifically to the conversion of legions into Chobani evangelists. At the bustling Prince Street store, Chobani fans — foodies, dieters, health nuts and everything in between — delight in sampling and buying all kinds of yogurt creations whipped up on site by highly trained associates. The store may or may not turn a profit, but it definitely tells a good story.
The most successful stories are often those that can be summed up in just a sentence (“It’s about this 10-year-old wizard who has to stop the world’s most evil villain”). Honing and clarifying the message in this way takes lots of practice. By opening retail stores, in other words, brands gain the opportunity to experiment with their storytelling. The store is, in a sense, a lab in which the company can tinker with product offerings, tweak marketing messages, and absorb data related to the behavior and preferences of loyal customers.
In Baltimore, McCormick World of Flavors gives McCormick & Co. the opportunity to highlight all of its products in a colorful space filled with the sights, sounds and aromatic smells associated with cooking, baking and grilling. It’s one thing to see an ad for McCormick brands like Old Bay, Vahiné or Grill Mates; it’s quite another to taste expertly seasoned food spiced up on site in the McCormick store. The storefront, which opened in August 2012, even boasts its own line of flavored salsas, olive oils, vinegars and tapenades.
This is not to suggest that profit is never part of the picture for brand-focused retail stores. The products of the Atlanta-based hosiery company Spanx are famously popular, and so it wouldn’t be a surprise if the company’s stores in Pennsylvania, Virginia, New Jersey and Atlanta actually make money. According to NPD Group, consumers spent $725 million on Spanx and Spanx-like hosiery in the 12-month period that ended on June 30.
High-traffic sites such as McCormick’s store — which is located in Harborplace at Baltimore’s Inner Harbor, one of the most photographed and visited places in the city —do create another interesting possibility. Because the experience is still fresh in their minds, the thousands of tourists and locals who visit places like McCormick World of Flavors might actually be more likely to shop this brand the next time they go back to their local supermarkets.
But even if such efforts fail to drive profits for the likes of Spanx, McCormick and Chobani, they can certainly help manufacturers learn valuable lessons about how to be as focused and brand-centric as possible. This is no small feat in an economy in which many brands struggle to connect with customers.
Of course, question marks continue to loom over brick-and-mortar real estate. Critics point out that we now live in a world in which Amazon Prime subscribers can have anything and everything shipped to their homes — for free — with just a few swipes on their iPhones or iPads. But after talking with a few Chobani evangelists about their experiences with the New York store, it seems clear that something clicked for these consumers once they spent some time in that space. With its clarity of message and novel offerings, the store took the brand loyalty of these customers to a new level.
Theoretically, a brick-and-mortar store is the last place you might expect to see buyers of the Apple iPad or Google Glass (the eyeglasses-mounted computer set to go on sale next year), because these are among the most tech-savvy shoppers around. But look at how profitable and jam-packed Apple’s stores happen to be. And consider all the rumors swirling about Google’s alleged plans to sell its Android products and Google Glass in branded retail stores. It all speaks to the advantages of brick-and-mortar real estate.
Through their experiments as commercial real estate leaseholders, manufacturers can export the most successful experiential elements from their stores — imagery, themes, displays, samples, demonstrations and more — back to the supermarkets or other outlets where their products are sold.
Today, retailers are adopting channel-neutral approaches in which they do their best to reach consumers in whatever ways the consumers prefer. Likewise, manufacturers now appear to be taking something similar to an “omni-channel” approach to brand building. In other words,they see offshoot retail locations as just one of many points of consumer contact, along with the likes of YouTube videos, Facebook pages and, of course, the all-important shelf space in other companies’ stores.