Experiential Retail

Are you curious to see behind the smoke and mirrors of Fragrance Lab and discover its inspiration? At The Future Laboratory we keep our nose firmly to the ground, identifying signs of consumer change in order to anticipate the future and steer the conversation. LS:N Global is our trends and consumer insight network that helps our clients to keep one step ahead. The Fragrance Lab, the result of a collaboration between Selfridges, Campaign Design, Givaudan and The Future Laboratory, reflects our research into the future of retail, which discovered that brands need to be experience-providers and thought-leaders, and to offer personalisation.

Today we will look behind the curtain – and the paywall – to reveal some of the stories on the retail innovators that are focusing more on experience and content than on products and profit margins. This Total Retail approach is what inspired the thinking behind Fragrance Lab. This preview will only be available for a short time, until midnight on Thursday 19 June. It is the first of three previews of all LS:N Global has to offer that will run over the next two weeks.

Read what the press has been saying about Fragrance Lab here.

‘This project is not about creating a showroom, but an environment,’ project designer Masamichi Katayama tells LS:N Global. ‘It has been designed to evoke the feeling of a clubhouse or lounge.’

Motor home

Katayama, whose Tokyo-based design firm Wonderwall has fitted out stores from Colette to Uniqlo, produced a design that subtly reflects Lexus’s automotive roots. The ground and lower floors are encased in a golden bamboo façade that repeats again and again the shape of Lexus’s distinctive spindle grille. The wall on the stairs to the second floor is adorned with gleaming whitewashed car parts.

Yet while cars remain important to Lexus, Intersect’s main purpose is to move the brand away from motoring towards what John Thomson, Group Manager of Global Branding for Lexus International, calls ‘the lifestyle world of Lexus’.

Intersect features clothing, accessories and homewares, part of Crafted for Lexus, a new line of exclusive products made for the brand by Japanese artisans, such as the hand-made sunglasses designed by eyewear manufacturer Kaneko Optical.

Road-worthy

‘We have built cars around quality for more than 20 years, but we have not focused on brand development,’ said Lexus International president Kiyotaka Ise at the launch of Intersect. ‘With Intersect, we will redefine the brand.’

Redefining Lexus means turning it from a car manufacturer into a luxury brand. ‘We strive for substance without focusing solely on the vehicle,’ Thomson tells LS:N Global. The company launched the Lexus Design Award in 2012 and supports emerging directors through its Lexus Short Films initiative. ‘Lexus is obsessed with design,’ says Thomson. The strategy is expressly intended to appeal to younger consumers and to expand the brand beyond fans and auto-addicts.

Lexus plans to create more Intersect spaces in New York and Dubai. Yet already its strategy is bearing fruit. In the 2013 LEAP Brand Index, released this week, the brand was the second-most loved brand in the US, up from 24th the year before. The only brand to beat it? That other social store favourite, the iPhone.

• Online retailer Birchbox to open its first permanent store in New York in late spring
• Unlike other online retailers that have moved to a physical location, Birchbox will not be a showroom but a two-floor brand experience
• The movement from clicks to bricks reflects how consumers want Total Retail, not just online or in stores

US – Birchbox, the online beauty box subscription service, will open its first store in New York this spring.

Founders Katia Beauchamp and Hayley Barna broke the mould of beauty companies when they launched Birchbox in 2010. They built a business out of the Small-Box Retail subscription model, in which members paid monthly fees to receive personalised samples of beauty products each month. The idea was that the box would be so tailored to consumers’ needs that they would be prompted to buy a full-sized version of the samples. Barna and Beauchamp found that that is what customers were doing – but they weren't buying them from Birchbox, but from physical beauty retailers such as Sephora. According to The New York Times, only 30% of Birchbox's revenue comes from sales of full-sized products.

‘We want that message to be clearer to consumers,’ Beauchamp told the newspaper. ‘You’re supposed to discover what you love and then act on that [by buying it from Birchbox].’

To that end, Birchbox will be a fully fledged brand experience. The store will stock more than 2,000 products, and will include areas for product testing, a Build Your Own Birchbox customisation section and workshops on skincare and beauty.

The opening of a physical Birchbox store is part of a trend among online retailers venturing offline. It affirms the notion of Total Retail – an all-encompassing retail strategy that LS:N Global identified in 2013. The idea behind Total Retail is that neither digital nor physical retail will win, it will be a skilful combination of both. A recent study by PwC confirms this, stating: ‘Convenient physical stores, a website capable of handling purchases, a mobile site or app – these capabilities are simply the price of admission for a healthy relationship with a consumer.’

For more on Total Retail, read our Retail Week Live 2014 show report.

Everything’s coming up make-up

First came Chanel – after its seven-month pop-up beauty shop in London’s Covent Garden proved a hit, the luxury fashion brand took up permanent residence there in February 2013. In November 2013, Dior followed suit, opening a dedicated beauty store right next door. And in December, Burberry launched its first beauty boutique in the same piazza.

A pure brand experience

The beauty boutique concept is certainly popular. But what are the benefits, given the rent and staff costs? George Wallace, chief executive of brand strategy firm MHE Retail, says it’s all about atmosphere. ‘It’s a very different shopping environment to go into your own exclusive space where it’s all about your brand,’ he says. ‘The key thing is about getting away from the crowd. In the typical department store, if you’re a high-end brand like Dior or Chanel, you’re slugging it out with all the other brands.’ While luxury department stores are ‘beautifully done’, says Wallace, they’re basically a ‘big loud bazaar with Clarins trying to shout louder than Clinique shouting louder than Chanel’.

Anna-Marie Solowij, beauty journalist and co-founder of boutique BeautyMART, agrees. ‘If you want to say ‘we’re a fashion brand but we do beauty brilliantly’, you have to step outside of the department store to be able to create a space that says ‘high-end, fashion, trend, must-have’,’ she says. ‘The minute you’ve got your own shop like the Chanel or Dior boutique, people are coming in because they’re focused on the brand and they’re probably quite keen to shop. Whereas the mentality in the department store is often head down, get through without being sprayed or stopped.’

A piece of prestige

Beauty boutiques also give luxury fashion brands the chance to reach out to consumers who might not be able to afford a Prorsum trench or Chanel clutch. In the past, says Solowij, luxury fashion brands offered ‘posh boutiques where the first thing you saw when you walked in the door was the £5,000 handbag’ – an intimidating environment for many shoppers. The beauty boutique, by contrast, gives Millennials the chance to buy into a luxury brand at a lower price. ‘Brands needed their own beauty boutiques so they could create a more inclusive environment,’ says Solowij. ‘It isn’t about being able to afford the expensive bag or clothes.’

Chanel has also tapped into the Millennial taste for experiential shopping with a series of events at its Covent Garden boutique. In March 2013, for example, it ran a three day pop-up flower stall for Mothers’ Day weekend, with store customers offered a hand-tied bouquet with the purchase of eau de parfum.

LS:N Global has a broad bandwidth of multi media content, across14 different lifestyle sectors. Those who are already members, can find more related content here. If you are intrigued by this preview and would like to find out what LS:N Global can offer you, click here to learn about membership. For our daily news feed on the latest innovations across sectors, keep an eye on our SEED section which is the only open access area of LS:N Global.