Stores within stores: a model that might save big retailers?
As a consumer, you’ve probably encountered stores within stores many times in the recent past. What began as department stores having McDonald’s tucked in the corner of their entrance has now stretched out to an expansive and highly intriguing trend where large-scale businesses act as the “landlord” to smaller but often highly popular brands.
Now, we see examples of this all the time – Sephora boutiques are commonly found within the beauty sections of a department store like Macy’s; and electronics providers are also often found within larger department stores. A recent article from TIME Magazine‘s online Business section discusses how Samsung is getting their own boutique inside of Best Buys, and what this means for these companies and for the retail industry as a whole.
Reporter Brad Tuttle writes:
“When successful, a store within the store will also improve the appeal of both brands among consumers and other businesses alike. Any retailer would love that. But for a struggling retailer such as Best Buy, the store-within-a-store operation could be critical. The Associated Pressquoted Morningstar analyst R.J. Hottovy saying that the Samsung partnership shows that ‘a very high-profile consumer electronics vendor still finds Best Buy a relevant distribution outlet.’ “
It isn’t too surprising that department stores and other large-scope retailers are having trouble. With competition as fierce as it is, it’s harder for any one business to get a big bite – especially when the giant of Amazon seems to loom over all brick-and-mortar businesses. Adding strong brand names to these stores is certainly a unique way to get customers interested, and, as the article mentions, it also removes a bit of burden from the larger business – it will be the boutique employees and managers worrying about inventory and customer service for their products.
Do you think the store within a store is a sustainable model for retail businesses? Share your thoughts in the comments!