Store Innovation Watch: February 2019

Last month I focused on characteristics that seem to define store innovation in 2019: stores that focus more on deepening the relationship, rather than selling stuff; an emphasis on in-store services; connecting fulfillment to the store, to the point of possibly not having inventory; gathering rich behavioral data in stores; and using the store to provide education or events.

None of this month's store innovations of note deviate from these characteristics, and several bring together multiple elements.

Foot Locker Power Store, Detroit

Foot Locker has opened other Power Stores, so this is not the first, but it is the first in the US. The Detroit location is placing an emphasis on local curation, bringing in local artists, musicians and athletes. It features an "activation space" for events. It carries shoes that will be exclusive to the location. About the location, the company said, "We're focused on creating immersive brand connections that are authentically tied to the neighborhoods they serve."

Deepening the relationship, in-store services and events, and doing it in a locally-relevant context are all at play in this concept.

Isn't It Romantic Pop-up Valentine's Shop, Toronto

The first thing to note about this location is that it was a pop-up stunt for the Isn't It Romantic movie starring Rebel Wilson. So it didn't really sell anything. It wasn't like it was a brand trying to make a statement, it was a movie trying to raise awareness of the film. But they took a fascinating approach that I think has potential in the retail space.

At the pop-up, consumers were presented with a choice as they walked in the door, basically a "choose your own adventure", where to the left, you could be pink hearts and girly romance, and to the right, you could be… not. Daria-downer, for those of you who might remember that character.

Usually it's difficult for these stunt-based pop-ups to offer anything that can translate into a lasting retail experience, but the idea of creating a choose your own adventure journey in a store – a physical journey through displays and products – offers an interesting way for retailers who still don't want to pick a side on a topic or issue to have it both ways, appealing to each side, while still managing to remain neutral.

Lego Pop-up Clothing Store, London

This one was covered extensively. Lego, in partnership with Snapchat, set up a physical space in London during the kickoff of London Fashion Week. The catch: there's nothing physically there. Users scan a Snap code, and then have access to an entirely AR-driven virtual experience, overlaid on the physical store space they're actually standing in. Lego provided some interactive activities, as well as visuals of clothes, which you could by straight from Snapchat. It was almost more an experiment to raise awareness of Snap's shopping functionality, than anything else, but does underscore both experiences in stores, as well as raising (again) the question of how much inventory you really need in order to make a physical location work.

Barney's Opens "The High End", a luxury cannabis wellness shop in Los Angeles

Very recently, RetailWire posed the question about whether cannabis would ultimately give new meaning to the "c" in c-store (as in, convenience store). This Barney's store sort of suggests it may go the other way entirely – into part of a luxury wellness offering. The goodies bags at the Oscars are reported to contain various CBD and THC products this year, underscoring the high-end appeal.

Two things to take from this particular store: one, wellness is a trend that is not going away, and it's one that is well-suited for stores, especially stores that focus on services for delivering wellness experiences. Plus there is a lot of education that can be offered that has value in an in-person format. Two, it appears that we're nearing a tipping point on when big, established brands feel comfortable enough to dive into the cannabis industry. The banking side of it in the US is still a big, ugly mess. But pressure grows for someone to do something about that at the federal level, and soon.

Clinique opens its first physical store, focused on Clinique iD, New York

Clinique has a relatively new product, Clinique iD, a "customizable" hydration skin product. To help showcase the product, the company opened its first stand-alone physical store in New York, entirely focused on iD. The store takes customers through a skin assessment, then recommends customizations, which can then be executed in stores.

This definitely falls under the idea of in-store services and events/education. But it also underscores an increasing challenge with products, one that will put more pressure on stores, and that is that as products get more technical, retailers and brands have to do more to help educate consumers about why they should care about the technologies (technical or chemical) that go into the products and how to make the most of them. Wearable tech, customizable items, personalized products or foods all will need that kind of support in stores.

Coinbase's Cryptocurrency Donut Shop, San Francisco area

Coinbase opened a pop-up donut shop to encourage consumers to use Bitcoin (and other virtual currencies) to pay, in part to get consumers used to paying that way and also for Coinbase to learn how to make the experience easier. Unfortunately, the social media reaction (especially by blockchain experts) was severely negative. The objection centered on trying to force consumers into blockchain adoption through currencies, rather than through other means that have more potential to be valuable, like loyalty programs or other tracking technologies that could take advantage of shared ledgers or contracts.

What caught my eye with this one, however, was the idea of opening a pop-up shop just to get closer to a real consumer experience. Has the price (and hassle factor) of opening a temporary shop fallen so much that it's cheaper to do this than to get focus group-style feedback from a paid panel?

Kitten Train (2017), Japan

I first came across this (a train car that comes stocked with kittens to play with) on my Pinterest feed, which knows no time boundaries, so this one comes late to the game, but I can't help mention it because one, kittens. But also because it is a very stark example of how experience builds transaction value. Would you pay more for a train ride that came with kittens? Especially when you think of the stereotypical perspective on Japanese trains? I would. We'll set aside the moral and ethical considerations of using baby animals this way, as well as whatever happens to the cats afterwards. In the meantime… Kittens!

Some other interesting articles to consider…

Dormify says they got a 200-250% year over year boost in revenue in any area where they open a pop-up store. That's across channels.

Business Insider reports that "having a large store in the most expensive part of town, offering the same experience as any other store, might no longer make sense." But rather than take that to mean that stores are dying (yet again), the conclusion is that only through experiences can retailers drive enough value to keep stores relevant.