The idea of shop-in-shop is gaining traction
The concept of shop-in-shop is becoming more and more popular in department stores, general retail stores and boutiques. The beauty of a store-within-a-store is that it benefits both the host and the visiting brand.
The retail sector is one of the most fast-paced sectors in the world. Those who want to succeed need to take a smart approach to grow their brand in a highly competitive and often overcrowded space. The global retail market will be worth a massive 26.69 trillion USD in 2022.
With this in mind, it is no surprise that many brands are constantly looking for new ways to increase their share of this lucrative market. In this article, we are going to explore the shop-in-shop concept. We will cover what they are and how they have been used, we will also explain why these can be a great option for ambitious brands.
What is a shop-in-shop?
A shop-in-shop is much as it sounds - a shop that is placed inside another, larger store.
This is commonly seen in department stores, where specific brands have their own space filled with their branding, products and staff. In these spaces, shops-in-shops are often referred to as Concessionaire Brands. For example, the UK department store Debenhams has multiple sites across the UK, each of which hosts a range of Concession Brand stores such as Garmin, Monsoon and Pyrex.
However, shops-in-shops are not the exclusive reserve of department stores. Other large brands will also host shops-in-shops from associated brands. For example, a large clothing store that resells multiple brands may host a shop-in-shop from one of the brands they sell in order to promote that brand and bring additional footfall into the store.
Equally, many mergers and acquisitions also lead to more permanent shops-in-shops. One good example of this is when French retailers Fnac and Darty’s merged in 2016, leading to Darty’s stores being opened within the footprint of Fnac stores.
Why use shops-in-shops?
So, why are shops-in-shops becoming so popular? This is primarily due to the mutually beneficial relationships between the hosts and the visiting brand.
For example, when a store hosts a shop-in-shop from an exciting or popular brand, they will benefit from bringing more people into the store. This also helps the host build their own brand by being closely associated with the hosted retailer.
Increased footfall will allow the host to cross-sell. That is why many hosts will look to bring in brands that are closely linked to their own products and services. For example, a camping store may host a popular tent brand - this is likely to bring people into the store who are generally interested in camping, hiking and the outdoors, offering the host a relevant and engaged audience to sell to.
Furthermore, the brand that is running the shop-in-shop is likely to invest heavily in promoting its presence. This in turn will help the host gain visibility with a wider audience without the need to invest in their own marketing campaigns.
For the hosted brand, the benefits are clear.
Firstly, they are able to run a store without the investment and hassle of opening their own premises - by running a shop-in-shop they gain access to resources such as space, location and workforce at a much cheaper rate than they would otherwise pay. They can also access a ready, willing and engaged audience that the host has likely spent years building.
Types of shops-in-shops
Earlier in this article, we explored some of the situations that you commonly find shop-in-shops being used such as in department stores, in general, retail stores and as a result of acquisitions and mergers. In this section, we will explore some of the types of shops-in-shops you will commonly find.
Although it may not be the obvious first choice, post offices offer a unique and potentially lucrative location for a shop-in-shop experience.
Post offices benefit from a consistent rate of traffic, which is often more predictable than a typical retail store. They also see spikes in traffic during key periods such as at the end of the month when many people come in to pay their invoices.
For example, Swiss Post post offices see a steady stream of at least 1000 people going in and out every day. The Zurich 1 Sihlpost post office has an average of more than 580,000 visitors per year. In terms of demographics such as age, employment, and household size, these reflect the Swiss population, including younger target groups.
Swiss Post also maintains post offices all across Switzerland. This offers a huge range of opportunities ranging from targeting one or a small number of local populations to a huge spread across the country. They also offer great flexibility with plots starting at just 1 m² and upwards plots available.
As post offices typically don’t place a premium on the top locations on the site, they can also offer a spot right at the front of the location, giving you a greater opportunity to reach your target audience.
Retail media offers brands an opportunity to build a strong presence inside other, larger stores and department stores.
Put simply, retail media is the use of retail space to market and advertise to those who are shopping there. This can come in various forms such as:
- Pop-up shops
- Point of sale advertising
- Immersive customer experiences
- Product collaboration
Many brands may even use a combination of these in order to drive awareness in other stores with an audience they may otherwise struggle to reach.
Independent boutiques benefit from creating highly personal and strong relationships with their customers. This is something that other brands can benefit from by running shops-in-shops with them.
Boutiques will often host shops-in-shops for a variety of reasons.
Firstly, it can be a lucrative way for them to rent out a small part of their store. They also tend to have greater flexibility with their space than other, larger retailers. Finally, because they depend largely on customer loyalty, they will always be seeking ways to bring them new and exciting brands and experiences.
Shops-in-shops: The future of retail?
Brands that use shops-in-shops are offered a range of benefits that we have covered in this article. These benefits allow those brands to potentially scale their businesses with a much smaller investment than other types of growth such as opening their own stores.