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Saluting the New Role of the Flagship Store

For years, the Flagship Store – stereotypically on New York City’s famous Fifth Avenue – has been the brightest star in the retail constellation. But like everything else in the dynamic world of commerce, the role of flagship stores is undergoing re-examination and re-invention. And while there may not be an explicit connection between a retailer’s flagship and programmatic customer loyalty, the flagship can have a halo effect that drives emotional loyalty.

In recent months, Gap, Ralph Lauren, Calvin Klein and Lord & Taylor all have closed flagship locations in Manhattan. Discussing flagship stores recently in the fashion blog Glossy.com, journalist Danny Parisi posed the question:

“Why do they even exist?”

At one time, giant, fully-stocked flagship stores were a destination for shoppers. But in recent years, flagships have become more of a tourist attraction than a place people go on everyday shopping missions. And as ecommerce has made virtually all brands, sizes, colors, and styles available everywhere, all the time, on every device, the relevance of flagship locations has decreased, and traffic has dropped dramatically.

As a result, Maya Mikhailov, CMO of GPShopper, told Business Insider, “Many brands no longer find that having hundreds of thousands of square feet, in high-rent districts, is the best impression they can give customers of their brand.”

Stores with a purpose

In today’s disrupted retail world, brick and mortar stores, especially flagships, must have a raison d’etre. Physical retail locations must provide some unique value or experience not available online or at a discount outlet. For flagship stores to succeed, experience must take precedence over mere merchandise.

Let’s look at several marketers who have re-invented the flagship in various ways.

Customization

In 2016, Converse opened their “Blank Canvas” workshop location, which in some ways might be viewed as the opposite of the traditional flagship. Instead of carrying everything, the store is focused on collaborating with customers to design unique sneakers – which are finished and ready for the customer in a day. Not only does that store fulfill consumers’ desire for customization and instant gratification; it provides an experience very different from the classic retail store. And it delivers that experience and unique product in a much smaller, more efficient footprint than the old flagship model.

In the same industry, Nike has opened a Manhattan flagship location, which they refer to as a “House of Innovation.” At 68,000 square feet it’s not small, but it immerses visitors in an app-enabled shopping experience that, like Converse, allows for endless customization. The app also does away with cash registers and the traditional checkout experience. To top it off, the location includes the largest collection of Nike products on earth, allowing sneakerheads to connect with the product they love in a museum-like atmosphere. The experience is as much an attraction as the merchandise.

Exclusivity

Chanel is also bucking the trend, having opened a glitzy flagship on Manhattan’s 57th Street in 2018. The draw for Chanel: exclusive merchandise, unavailable anywhere else. The store offers one-of-a-kind accessories and fragrances, including unique creations and charms based on the New York City experience. This is a great strategy that makes the Chanel flagship a destination.

Barneys New York is taking things to new heights with The High End, a store-within-a-store at their Beverly Hills flagship. Yep, it’s a “luxury cannabis lifestyle and wellness concept shop.” In an exclusive partnership with Beboe, an upscale cannabis company, Barneys will offer a range of accessories, jewelry, and health and wellness merchandise, including items made just for The High End. While select items will also be available online, the physical store will be a unique destination, extending the retailer’s luxe image into the newly de-stigmatized world of weed.

Hands-on experience

While technology has made merchandise accessible with a click or a tap, consumers still hunger to touch and experience products – especially new products. Samsung has announced the opening of three new “Samsung Experience Stores,” combining sales with repair services, live product demos, gaming lounges and other ways to experience the latest Galaxy smartphones, wearables, tablets, TVs and more. Y. H. Eom, CEO of Samsung Electronics America, calls it “a playground for Samsung fans.” Who doesn’t want to visit a playground?

The new Levi’s store, occupying nearly 17,000 square feet in Times Square is a destination for tourists and local denim lovers. A unique merchandising scheme arranges styles by vibe, and emphasizes Levi’s classic heritage. A huge collection of vintage styles is arranged by year, along with the latest fashions. The first-floor entrance features New York-inspired gear for the tourist market; and the store includes a large Tailor Shop where visitors can reference design inspirations from around the world on an iPad, then huddle with designers and tailors to bring customized clothing to life.

Everything old is new again?

The old-school glamor of flagship department or brand stores that wowed customers with size, volume and choice may have faded. But, the flagship store can still be a vibrant destination. We see in these examples some of the many ways creative marketers and merchants are using technology and insight into the ways we shop in the digital age, to re-invent the flagship and keep it relevant. The flagship store represents bricks and mortar on steroids – to survive in our disruptive era, physical retailers must provide unique and differentiated in-store experiences, which reinforce emotional brand loyalty. Those who do so successfully will thrive, on Fifth Avenue or on Main Street.

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Howard Schneider