Flagships are a statement of brand potency and experience. They’re ostentatious and bold, like a peacock fanning its feathers in the evening light, demanding its rightful attention.
For retailers, the Flagship Store is the ultimate shopwindow, a luxury of the senses, where architecture, artistry and product meld into a cocktail of delirium and fantasy.
Dior-Paris, Burberry-London, Tiffany-New York, Prada-Tokyo, and too many more incredible temples of experiential retail to mention.
But the point-of-sale system might accuse them of being little more than a vanity project, that connects more with the retailer’s ambition, than they do with the customer’s need.
In today’s omnichannel shopping experience, does the Flagship Store justify the cost, and what incremental value can you expect to achieve in brand association and customer acquisition?
The Case for Flagships:
There’s a valid argument that in today’s age of astronomical digital ad spends, a flagship is a powerful way to connect directly with consumers, create content and build brand, at a fraction of the cost for the same cut-through and engagement.
Retail is as much about emotive purchases as rational purchases. Emotion is what drives our industry, and flagships run on pure emotion. The flagship is the ultimate marketing project, and there is so much that can occur after a shopper has left a flagship, even empty-handed, that it cannot be contained within a store’s P&L. Scrutinising its value through dollars and cents is fundamentally missing the point – and the true value.
Big brands like Lego, Mecca, Nike, Dyson and Camp USA, have near perfected the flagship model, with oases that pull crowds in, and reverberate out, as the experiences are re-told again and again. Locally, Rebel’s new award-winning Emporium Melbourne Flagship is a masterclass in bringing the fun, movement and engagement of their products directly into the store experience.
The Case Against Flagships:
Yet Flagships fail most when they are created at the expense of the rest of the store and omni-channel network. As if one child in a large family was given more nutritious food, and packed off to the top school, while the others just got by. And worse still, that privileged child somehow ended up with the lesser grades. Or in the retail world, negative profits.
The Shift to Local Stores:
In Australia, local shopping centres are increasingly where retailers are seeing the highest margins and most consistent footfall.
37% of Australians now regularly work from home, and this will trend up as the current student population transitions into the workforce. Going into our city centres now has a defined purpose, not just our pre-2019, automatic 7.55am train ride. Our days are for scheduled meetings, active socialising, and absorbing the working vibe of the surrounds. Office workers no longer have an idol hour to kill each day for their “lunch-break” so perusing the aisles of a massive store now seems like time-lost, not experience gained.
We are living in the flexible work era, and our shopping time-allocation has emphatically transitioned from the centre to the suburb. With this new shift follows a new demand; our local stores can no longer be the lesser experience. It is also the perfect vehicle for the hyper-personalisation we’ve all become accustomed to online: we want someone to know our name, remember our previous purchases, and welcome us back like the loyal, valuable customer we believe we are.
What better way to do that than in local store hubs? Personalisation can be very expensive at scale, but in a local store, great retailers already have personal relationships and connections with their customers, and it costs little more than a smile and some old-fashioned hospitality.
Camilla understand this well, and refer to their stores as a place to socialise, not shop. Their customers come in for a wine and a chat, and accidently walk out with a kaftan. Retail Prodigy Group do this by measuring whether staff learn their customers’ names when they walk into a Samsung store. Neither of these things cost a fortune, but they create huge lasting impressions and foster genuine warmth and connection with these brands.
On a slightly grander scale, but by no means the expense of a Pitt St Flagship, Australia Post deliberately went to Orange, a local community crying out for services, and built the first of their community hubs that meets their customers where they are, and with services that they were asking for. Work-hubs, showers, barista coffee, all while you pick up your ecommerce parcels. And they recognise that their stores, services and product offerings will continue to be very different from town to town, city to city tailored to their customers. What better way to drive both acquisition and retention than with a local format that embraces and respects the community it contributes to.
5 Guiding Principles for Flagship’s in 2024
Assess, in honest detail, the following to inform your Flagship decision.
1. From a customer view; does your brand have a compelling reason for grand experiential retail?
2. What is its real purpose? Explicit front-line sales, or Implicit brand & marketing?
3. Is your Flagship stand-alone and separate to, or fundamentally integrated with the rest of your store network?
4. What is its proximity to your customer base? Are you located where they do their shopping, or must they travel to you?
5. Where is your customer? Are you meeting them where they are, with what they need, or are you channelling your inner Kevin Costner: “Build it and they will come”
To flagship store or not to flagship store, perhaps the answer is not yes or no, but why, and at what cost? We all know consumers shop across all channels at different times for different purposes, and the experience must be of a comparable quality across the network. Flagships have incredible power to delight, inspire and connect, but it is local stores – done well - that have the most power to drive loyalty, long-term relationships and the best R-word in retail: retention.
