This week, a look at the state and potential of retail’s localization trend.
Retailers opening smaller-concept, more localized versions of their core stores is trending.
Bloomingdale’s will open the first location of its Bloomie’s “neighborhood store” concept, in Fairfax, Virginia, on Thursday. The 22,000-square-foot store will house a Colada Shop and Cuban Cafe, and its product assortment will be updated multiple times per week. Standard full-scale Bloomingdale’s stores are more than 150,000 square feet. In July, Denise Magid, Bloomingdale’s evp and gmm of ready-to-wear, center core, concessions and outlets, told Glossy that Bloomie’s stores will be “built to complement the market” and “designed to be part of the community.” Their product assortment will be based on “the local lifestyle of the customer.” More locations are in the works, though the retailer hasn’t revealed how many or where they’ll be located.
Bloomingdale’s strategy isn’t new; Target began debuting scaled-down stores with custom assortments in 2012, and Nordstrom opened the first of its seven Nordstrom Local stores in 2017. The same year, Saks Fifth Avenue opened boutique-like The Collective in Greenwich, Connecticut, which became a localized Barneys at Saks in January. And the model’s been gaining steam: Express introduced its Express Edit store concept in fall 2020 and plans to operate 10 stores by the end of this year. And Macy’s has been reverting to its neighborhood store roots, rolling out Market at Macy’s stores since early 2020.
According to Coresight Research CEO Deborah Weinswig, in a June 2021 report, “The pandemic has accelerated consumer disinterest in homogenous physical-retail experiences and driven renewed appreciation for experiences that are local, distinctive and diverse.” Her conclusion: “Retailers should consider localizing in-store experiences and product offerings.”
Of course, a store customized for locals doesn’t guarantee that it will become a community hub. Retailers like Brooklyn Circus and Fred Segal that have been successful in immersing themselves into communities offer a blueprint to doing it right: Versus just serving their local community, they’re building their identity around it. And in doing so, they’re earning a distinct reputation that extends beyond a neighborhood and positions them for growth. Rather than insert themselves into a community, they follow their own tribe.
“Everything I do is based on the concept of collaboration — but true collaboration,” said Ouigi Theodore, founder and creative director of retro-preppy Brooklyn Circus. The menswear brand launched 15 years ago with a store-turned-cultural institution in Boerum Hill. It’s since become a music-fueled gathering spot that hosts regular events, which have slowly returned this summer. In June, it held an indoor-outdoor trunk show of sorts featuring pieces from its archives.
“Community is part of who we are, and it’s what drives me,” Theodore said. “The product is the end result of experiences, beautiful relationships — it’s all circular.”
Though Brooklyn Circus has had other physical outposts, including pop-ups and shop-in-shops in San Francisco, Chicago and Japan, it didn’t sell via e-commerce until last year. Its site was 3-4 months away from launching when Covid-19 hit the states in March. “We immediately felt a disconnect, and we had to come to terms that there is an additional digital community; there’s no separation between our digital, Instagram community [of 90,000] and our physical community.”
To reflect its signature prioritization of community, its website was split into sections: “shop” and “culture.” Culture is dedicated to content — namely stories of artists, musicians and other creatives in the Brooklyn Circus community at large, meant to inspire the brand’s local and global following.
“The power is in the people’s hands,” Theodore said of the site, noting that he’s building out his team from within the community. That includes new creative designers, an editor-in-chief and a social media director. Two longtime customers are new manufacturing partners, after stepping in last year amid production roadblocks, and community members continue to serve as campaign models.
“Brooklyn Circus is really a platform,” he said. “It’s the circus and I’m the ringleader. All the talent around could perform on its own, but we’ve created this tent for it to exist.”
In the year ahead, Theodore has his sights set on bringing the “BKc” community together often, through music, sporting events and potentially think tanks. “We don’t want the community to just come out and have a drink and buy products; we want them to be engaged and participate.”
His ultimate goal is to open a BKc mansion that would include a dining experience, lodging and a gallery, along with retail.
On the other side of the country, L.A.’s 60-year-old Fred Segal is also in expansion mode, driven by current owner Jeff Lotman. Lotman acquired the company in 2019, lured by its name recognition — in the early aughts, it became well-known for its celebrity clientele and designer denim. Lotman said he’s hellbent on staying true to the brand’s signature, local aesthetic and the customer it serves. Its current core shoppers are women ages 25-35.
Fred Segal now has locations in L.A., Malibu and South Korea, and a pop-up in the Hamptons. Another California-based store is set to open in early 2022, and Lotman is in “very aggressive conversations” with stores on the East Coast. He wants to limit the number of stores outside of California to 4-5. “Fred Segal can’t have too many stores,” he said. “That would take away from the brand and what makes us special. But landlords are very nice to us; they want us and our community.”
When founder Fred Segal passed away in February, Lotman said 280 articles were written about him in two days, driving more than 10 billion media impressions. His team used those impressions to build a heat map determining where there’s most interest in the brand. Areas included the U.K., Italy, France, Germany and Saudi Arabia. The exercise drove Lotman’s current negotiations with a store location in the UAE.
“The brand has that kind of strength because it’s been around since 1960, and it’s always been [about] one thing: the L.A. look,” he said. “It’s where you go to discover what’s cool [in that style]. That’s never been messed with.”
In July, Fred Segal relaunched ’80s brand Camp Beverly Hills, which is made in L.A. It quickly sold out and drove up the retailer’s typical website traffic by 600% on launch day. Fred Segal also relaunched L.A. brand Juicy Couture late last year.
“There’s so much fashion that’s being done here in L.A. — great designers, great manufacturers,” said Lotman. “We lean into that as much as possible.”
Lotman also owed the company’s local following to its relationship-building clienteling and customer service. “We’re willing to tell a customer if something doesn’t look good, and they trust us because of that,” he said.
And, he confirmed, stars still shop there. “The list of celebrities who have been in our store in the last six months is a real who’s who,” he said.
Like Brooklyn Circus, Fred Segal was very late to e-commerce, only pulling its website out of a nascent state in 2019. The site is now doing 10X sales, compared to 2020, and Lotman projects 5X online sales growth in 2022. The site launched Live Shopping on the site last year, bolstered by featured influencers like Miss Peppermint (700,000 Instagram followers).
“Really significant dollars are generated in our stores in a day,” he said. “And when you translate that into [international] e-commerce, considering our audience, this should be a ginormous business.”
Madewell’s Garrett Putney on the retailer’s localized Hometown Heroes Shops
Two years ago, Madewell launched within its stores Hometown Heroes Shops, featuring a selection of products made by small artisanal companies. Below, the retailer’s svp of stores, Garrett Putney, discusses the ongoing strategy.
How have Hometown Heroes Shops evolved?
Since day one, the Hometown Heroes program has served as a platform for makers to sell their goods in our stores and for us to introduce them to our customers. The program is a great way for us to connect with our community while celebrating creativity and artisanship. We started with pop-ups or giving makers space to sell in our stores, and from there, [we] grew the program. It now has permanent [placement] in select stores, and [we’ve launched] the Hometown Heroes Collective program, which allows us to sell makers’ [products] on our site.
What learnings have come from the Shops, in terms of their ability to foster community?
The program is central to how we foster community in our stores. Our local teams run the recruitment process and are really engaged in finding the best makers — many times they are sourced from their personal networks. We aim to make the process as easy as possible for the maker: We give them space to sell and invite our customers to shop, and we’ve received overwhelmingly positive feedback about the experience. It’s a win-win, where we get to feature these incredible people and their goods while giving them a platform in high-traffic areas to sell.
What’s next for Hometown Heroes Shops?
They’ll always be part of our store experience, whether through pop-ups or local markets. Based on the feedback we’ve received, we are actively looking for ways we can grow the program.
What does it take to grow a community via a physical store?
You must be dedicated to delivering the experience your shopper is looking for. The best way to understand that is to listen to them. We grow our business based on feedback received from the community, both at the store level as we interact with customers and through a network of engaged customers we have called the Madewell Group Chat. We learn about their habits and interests, what they’re shopping for, and how they want to interact with us. These invaluable insights, along with maintaining an open dialogue with our customers, allow us to deliver what they want.
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