by Brianna Crandall — November 2, 2016 — Flagships signify the lead ship guiding a fleet, and today flagship stores act similarly for a retailer, guiding their store portfolio with innovative concepts, technology and merchandise, points out a new research report from global professional real estate services and investment management firm JLL (Jones Lang LaSalle).
While luxury brands have used flagship stores for years to connect with customers and grow brand recognition, the Flagship Confidential report shows an increase in retailers across all price points using a flagship store strategy. The report, which looks at 145 flagship stores in New York, Los Angeles, Chicago and San Francisco also found 11 common key features among these retailers.
Flagship stores at all levels guide their store portfolio with innovative concepts, technology and merchandise.
According to James Cook, director of Retail Research, JLL:
The flagship stores we analyzed all had common themes revolving around advancements in consumer-engaging technology, exclusivity and in-store experience. These stores typically had unique architectural elements and dramatic interior designs. Certain characteristics were more commonly found within specific price point groups like luxury or discount, but we expect that flagship features will become more common along all points within the price spectrum.”
Luxury and luxury lite: Ultra-personalized, with high-touch hospitality
JLL categorized the flagships into five different price point groups and found that 40 percent of the stores fell into the “luxury” and “luxury lite” retail category. The upscale nature of these flagship stores seeks to offer ultra-personalized experiences that deliver a one-on-one connection to shoppers. Luxury and luxury lite stores also had a direct correlation to having the highest concentration of hospitality and wellness features, like restaurants, cafes, coffee bars and VIP rooms with high-touch hospitality service.
“New York City, which had more than half of the luxury flagships in our study, caters to wealthy shoppers with invite-only VIP suites, private fitting rooms, lounges and salons. Chanel on 57th Street contains a private fashion salon housing exclusive designs that will soon undergo a $3.8-million-dollar renovation,” noted Cook.
High or middle: Emerging technology
Nearly 60 percent of the flagships that showcased emerging technology fell into the “high” or “middle” price point category. These middle-of-the-road retailers primarily use technology to connect with a broad swath of customers more intimately and cost-effectively. The purpose of technology in store varies from social and informative to discovery, but has evolved to be more practical.
“Sunglass Hut on Fifth Avenue features an interactive sunglass display called Social Sun that allows customers to take and share photos of themselves. In Lululemon’s New York flagship, shoppers will find an interactive, touch-screen mirror that helps customers discover local fitness studios,” added Cook.
Middle and discount: Expanded or exclusive selections
A noticeable trend among “middle” and “discount” retailer flagships is offering expanded or exclusive selections to entice customers. Fast-fashion retailer H&M’s Los Angeles flagship carries higher-end products not found in the chain’s regular stores and it was the first location to offer all the retailer’s product lines under one roof. At Converse flagships, shoppers can customize products like shoes or hoodies with their own designs at the Ink Bar, and there are even graphic designers on hand to assist with the process.
“Flagship stores in the United States are likely to remain in urban corridors, but are evolving to cater to an expanded consumer base. We expect retailers to continue using their flagships as a gathering point for shoppers and investing in the build out and outfitting of their flagships stores,” concluded Cook.
JLL is reportedly the largest third-party retail property manager in the United States, with more than 1,000 centers totaling 125 million square feet under management. The JLL Retail Group has more than 140 retail brokerage experts spanning more than 30 major markets, representing more than 900 retail clients. The firm’s retail experts are said to understand the inherent complexities and variability associated with both the retail industry and increasingly complex capital markets.
The Flagship Confidential report is available from JLL upon brief registration.
