Differentiating themselves from the clutter in this high-tech world can be a daunting task for brands across the globe. Hyundai Capital, the financial giant, tackled this international riddle not only by increasing investments into their online services but also by creating retail branches called brand ‘Finance Shops,’ flagship outlets to give a feel of more like exclusive stores. Online jeweller CaratLane.com realisedthat in order to enhance their customer experience and make customers feel more cared for,they need to provide a physical space and hence launched its first brick and mortar store in Bengaluruat Phoenix MarketCity.
Housing the flagship store of the French furniture retailer Roche Bobois, the brand is seen flaunting its international attitude and thereby demanding exaggerated visibility. With a glass window glazing look andglaring signage, the store is surely not one that will be missed out at the Indiabullscentrein Mumbai. These larger-than-lifestores say clearly, ‘This is who we are; and this is what we are about’. These stores are not opened with the intent of generating profits; more to stand differentiated than the competition and showcase the exclusive glitterati of one’s brand in the big, bold and beautiful nomenclature. Retailers today do both, in high street fashion business.“It is tempting to build flagships because they area metaphor for success, meaning really that we can afford to lose money on some locations. Multi-brands stores continue to rule the game alongside independent stores,” says Priyadarshini Rao, designer.
Key constituents of a flagship store
But how does one define a flagship store? A simple definition does not fully convey the creativity and vision surrounding a flagship. “I want people to enjoy the spaces I create,” says designer Sabyasachi, “and this is how I define my flagship store. Buying clothes is only coincidental.” But falling in love with the clothes at the two-level store, located in the heritage Ador House in Kala Ghoda, is something to look out for. “Unlike other stores within the chain, the purpose of a flagship is not only to generate profitsbut it has a particular job to do in drawing attention to the brand, broadcasting its brand status and marking itself out against its competitors,” says JinaliSutariyaandHeenaSurani from The House of Chic.
DesignerPareshLambadefines his flagship store “as a showcase house of exclusive and much wider range of products, which eliminates any chances of dead stock and adds to the profile of the brand especially for luxury fashion retailers. The store creates opportunity for branding as well on the international platform by entering into higher level of value chain creations.”
DilipKapur, President of the premium leather goods retailer Hidesign, in one of his earlier stories for Images Retail in 2012, commented: “A flagship store must be created as a destination for customersand not just as another store in the retail chain. It should speak not only through its products but also conveythe story of the brand through its heritage and values. Flagships should always remain unique in one way or the other in terms of the shopping area, target group, iconic location,features and services.” True to his vision, the Hidesign flagship store in the heart of Puducherry has paintings and sculptures that expressthe brand’s quality, design, and panache.A brand would carry a larger assortment in the flagship stores, and the target audience is likely to be more upscale and of a different persuasion when it comes to making high ticket sales. There are customers who will only shop at flagship stores and that is because they are early adopters of fashion and the category. Brands choosing to enter a country with a flagship store include: Zara in Australia and South Africa; H&M in Japan, South Korea and Hong Kong; and Hermès in India. In recent years, following the growth in national wealth and the increase in international visitors, Shanghai and Moscow have emerged as key flagship locations.
The key elements common across the world’s most successful flagships are:
- They are usually the largest of storesin a retailer’s chain.
- They are situated in a prestigious location or high footfall area.
- They stock the chain’s exclusive and complete range of merchandise, with stock maintained at optimum levels.
- The stores are spotlessly clean, experimental, inspirational and opulent.
- The store design talks of a story and displays visual and experiential embodiment of the brand.
- Customer service at these stores is second to none.
As per the research article on ‘Themed flagship brand stores in the new millennium: Theory, practice, prospects’ in the Journal of Retailing:‘The primary intentions of most flagship brand stores are to take the branding concept to an extreme level. Flagship brand storescan be distinguished by three characteristics. First, they carry a single (usually established) brand of product. Second, that brand’s manufacturer owns them. Finally, they are operated – at least in part–with the intention of building or reinforcing the image of the brand rather than operating to sell product at a profit. Flagship brand stores can be exclusiveoutlets for a manufacturer’s brand, such as Old Navy, Banana Republic, or Body Shop, or non-exclusive, such as Tommy Hilfiger or Ralph Lauren.
New emerging concept in flagship stores
A new concept of store emerging globally are the ‘themed flagship brand stores’, which combineselements of flagship brand stores coupled with themes and entertainment as it promotes an existing brand that issold in a variety of other venues and also seeks to becomean entertainment destination that generates revenue directlyfrom the sales of entertainment services, for instanceKidsZania, Imagica theme park,etc.Disney is embarking on a new plan to re-imagine its retail spaces as entertainment hubs that promote interactive play as opposed to environments that merely exhibit merchandise. The goal is to get children excited about going to their stores by providing branded activities and content that encourages families to remain inside the stores longer or visit more often, with the potential to lead to increased sales. With new concepts, seasonal launches and product display being able to sprout and retain in a flagship environment, the customers are able to better connect and relate to the brand’slegacy, heritage and products. Designed by DFC, FRDC Bangalore, Crusoe launched its first flagship retail store providing a first-of-its-kind of experience in men’sinnerwear segment in India. The store has been designed and conceptualisedon ‘adventure’ and the adventures are amplified throughout the store in minute details.
Retail space re-imagined to occasions
Supermarket designs the product merchandise and layouts in flagships, especially according to occasions like Diwali,to encourage interaction and discovery to the shopping experience. England chain Stew Leonard’s has chosen to organise their stores by occasion (an example being a barbeque or birthday party). By doing so, they are curating experiences and upselling new products that customers might not consider. The store also provides entertainment and refreshments along the way; animatronic farm animals that kids can play with, flat screens showing live feeds of their own dairy cows, and generous sampling stations. Stores like Spencer’s andGodrej Nature’s Basket overhaul their look and feel to celebrate festivity sentiments of the masses.
Right store location
Hugo Boss flagship store in Tokyo took about four years before deciding on the location. “Choosing the right location is essential. The first decision to consider is whether to open your flagship store in a prime affluent catchment area, like Peddar Road or Colaba or in an area with high footfall, such as Inorbit Mall or Infiniti Mall in MaladWest, Mumbai,” says Rohit Jain, who manufactures amplifies and music systems. In certain prestigious locations, a whole area may be considered ‘flagship’, such as Palladium, Lower Parelor the ‘Triangle d’Or’ in Paris, home to a multitude of flagship stores from luxury retailers. Linking Road, South Extension, Indiranagar-100ft Road and many other flagship locations have seen more brand exits than ever.
The decision for the location of the flagship store is also guided by a combination of brand identity, financial considerations and brand strategy objectives. Marks and Spencer has the strategy to open flagship stores in important locations and then build a cluster of supporting stores around them. With record sales of close to 30 per cent, they plan to open around 80 stores in India by 2016, with stores also opening in attractive secondary markets like Surat and Kanpur. Headquartered in Kolkata and having the best-sellingshop-in-shop (SIS) stores, ZinkLondnplans to launch nearly 50 flagship stores in India by 2020. The first store was launched in Kolkata, being the obvious choice launching it at the Forum, as the destination has a young and rich neighbourhoodand it is located in an up-market area of the city.After sixyears of studying the Indian markets, Starbucks for its flagship Mumbai store, chose the historic Elphinstone Building in the Horniman Circle neighbourhood of south Mumbai, not far from a vast Hermes shop and a stately local park maintained with funds from the family foundation of Italian designer ErmenegildoZegna.
Right store size for success
There is no standard as such –when you pay US$20 a square foot in Mumbai you pay US$200 for the same square in HongKong and US$300 in Manhattan. “If your business and market has that demand, you size it the way you want. The flagship size depends entirely on your brand, the width that you carry and the price point. India has no real flagship stores yet like seen in the evolved markets,” says Rao.Flagshipstoresneed not be the largest stores;they can be small and quirky stores as well as the 400-sq.ft.ZinkLondonstore, which has opened a concept flagship store in Kolkata giving a feel as if one is shopping in the streets of London.A store need not be large in size;it should also make an emotional connect with its customers and should be able to communicate its brand definition.
Roche Bobois store has a 5,000 sq.ft. expanse and allows the luxury factor to seep in and be in sync with its international counterparts. The store is spread across just one level allowing clear lines of vision cutting through the space. “An average of 5,000–10,000sq.ft. is the typical size of flagship stores in India;the general size of the international store is much larger,” says Lamba.
Marks and Spencer has a bigger catalogue and hence they cannot express the M&S universe in small-size stores. They would like to have more mid-size stores – ideally 10,000–15,000 sq.ft., which is not easy to find in India. But that is the store size that can bring the brand to life. They may look at smaller stores in future but not for their full catalogue.
Design and look
Sabyasachi’s new flagship store is a collector’s dream adorned with 22 vintage hand-painted chandeliers, 400 ittar bottles, recycled colonial furniture and framed period calendar art from the twenties that transform the 8,500 sq.ft. space and highlight his strong ties to his hometown. AnunDhawan, Director, Pita Pit India says: “Considering the canvas here is much larger, we have sampled with innovative materials and classical themes to give the place a lounge-cum-café effect. The fresh thinking reflects in the design as much as it does in the food Pita Pit serves.” The Starbucks store in Amsterdam for instancefunctions as a ‘coffee lab’: a place for the brand to introduce and trial new brewing methods and new blends, try out new layouts and host events and launches.
A unique store design which enables customers to interact with the brand on a multi-sensory level, generates an emotional response and attracts attention is an essential component of a flagship store. Bobois store gives a vibe of a bloated jewellery box to the moving traffic; a glass box which houses the tangible form of luxury and portrays a combined application of both aesthetics and experiential elements where the most successful flagships aim to stand out.
The best flagships offer customers the opportunity to be inspired, to have fun, to be entertained, to be awe-struck, and to let their imaginations run wild, to be pampered, to socialiseor to relax. Asian Paintsflagship stores do notsell a single pot of paint;instead, the stores are an ultimate playground of colourand create an inspirational and interactive colour experience where guests build colour confidence, get inspired by the latest room-sets, and test and make their décor ideas happen in their homes.The global concept flagship store of Pepe Jeans recently opened in New Delhi has a distinct denim wall with a huge white union jack background and it highlights the new fits, styles and washes introduced this season. The store also has visual merchandiseprops like lamps, trunks and spools that add to the vintage look of the store.
“Though all boutiques at Lacoste believe in providing a superlative ambience and experience to all its customers, the flagship boutique further enhances the consumer experience via a wide hemisphere of visibility across all categories, merchandise and subsets,” says Rajesh Jain, MD and CEO, Lacoste India. As a whole, the flagship boutique aids and drives the season or theme campaign, provides a firm base to integrity of the brand and definitely assists in building brand loyalty, brand retention and brand saliency. The Chennai flagship and Bengalurumall store of Color Plus saw their sales surging by approximately 30–40 percent in 2013, using Gensler’s design. Customers’ enthusiastic responsehas set the ball rolling for more mall and flagship stores throughout India.
Flagship stores: Is it risky?
According to Jain:“Flagship stores are the hub for any brand that not only establishes, builds and retains the brand but also, owing to its position, size, catchment and area of presence, develops the intrinsic brand worth, underlining the brand virtues, seasonal theme evolution, market segmentation and target needs.” Whereas on one side they can have a tremendously positive impact on a brand, the other side could leave an adverse effect on the brand status just by introducing the store.
Location in the mall or high street is a 50 per centstrike rate to success. As customers may ignore the standalone store on a high street under heavy downpour or parking issues, they might visitthe store built with powerful air conditioners maintaining comfortable levels of temperature, humidity and lighting day and night, while rain and other unpleasant weather are left at the door. Everything about a flagship store is more expensive – the store design and build, property rental and day to day running costs–and if the store is located on a high street then one needs to look for companies that will provide security, cleaning and communications services, etc.
“The upkeep of my store is huge;it also experiences greater levels of wear and tear than other stores due to high footfall and we have to constantly innovate using attractive themes and colours drawing relevance to different moods of India,” says PoojaBanthia,owner of Virasat Boutique in Bengaluru. The number of self-supporting flagship stores is less as compared to others as the financial implications are huge.
“What can possibly go wrong is the design, look and feel of flagship stores vis-à-vis the chain of stores by the brand, similar standards and policies, staff behaviourand attitude, etc.,” says AshishTyagi, advertising professional. He could not engage with the service philosophy, warmth and care at the one-year-old POP Tate’s, a restaurant in the suburbs of AndheriWest, Mumbai. Customers can experience feelings of disappointment or frustration with other stores in the retail chain when they do not meet the same standards as the flagship.
And occasionally a flagship store simply doesnot work. There could be plenty of ‘just looking’ customers who do not impact the sales. The Mango and Charles and Keith store opened in the not so popular mall of 7 Bungalows, AndheriWest with absolutely stunning store designs, but closing down due to poor traffic flow through store, restricted visibility due to architectural blind spots, and wrong location.
But Jasmine andSandhya Shah from Just Jewellerybelieve:“There are no major threats or risksto a flagship store – it generates a much higher sale as compared to a multi-brand store. Many a times, a lot of new clientele is seen buying the product even if it is not on the priority list at that point. Product gets huge visibility, which is missed amidst the pile of brands sharing space in a multi-brand store.” Even SutariyaandSurani agree that: “The key to be away from threats is innovation. As long as you innovate and make your store attractive, there are no threats.”
Everything from the paint colouron the walls and the light fixtures to the scent and mannequin style is carefully chosen to represent the brand. Cross promotions with similar category retailers, fashion previews to customers, off coupons to repeat buyers, customisationfor patrons, and better service are key characteristics. These promotions are unlike what the brand would do in an independent store.“We make 20 per centof our sales from our own stores, and Bandra is our flagship store. This may be true for most businesses of our size, but we are small. But the large menswear brands in India do more than 35 per centfrom their own stores,” says Rao.
PareshLamba stores have recorded a growth in sales of 28 per cent and are hoping to open 8 more stores in India this year. “When it comes to marketing campaign, we aim for a mix of online and physical promotional items to cast the widest net for potential customers.By putting PareshLamba Signatures in front of customers in as many places as possible, you create a bigger name, recognition and curiosity,” says Lamba.
“I think in luxury, flagships are the best way to demonstrate dominance in the category. For the high street brands, flagships are a ‘keeping with the Joneses’ thing. There are brands that donoteven need it, but it is a great ego boost for good patrons as well as the company. Flagships inevitablymean low ROI, with a hidden goodwill value on the balance sheet,” says Rao.
The future of flagships in retail
The flagship is said to be a ‘test hub and template’ for future retail. Many of the store’s innovations will be concerned with the integration of the digital and physical worlds. Burberry has done a lot tosynchronise its physical retail presence with monthly product drops and corresponding digital communication activities in its flagship store in London and a similar trend is seen in Indian retail market as well. The invention of the car didnot lead to the extinction of horse-drawn carriages – it just made them a rarer and more distinguished way of getting around, and primarily a tourist attraction. In an age where e-commerce is emerging from its infancy to a more established and integrated part of the retailing system, it seems that flagships serve two purposes. One, it reaffirms brand stakeholders and, secondly, a hedge against how the retailing structure could evolve in the next decade.
“Time is the currency of all experiences,” wrote business guru Joseph Pine on the Harvard Business Review website. “And a very simple rule applies: The more time your customers spend with you, the more money they will spend now and in the future.”
Things to consider before opening a a flagship
- How important is opening a flagship store to your consumer strategy?
- What does it add to the understanding of your brand and if that is already missing?
- How will the flagship store be used? Is the purpose to celebrate what you have to offer; is it to reap profits,to offer new interactions or to differentiate from the competition?
- Who will be the target segment and how will you do it? What will they find there? How will that experience work for them?
- How does the flagship store fit with the other formats – physical and online presence? And where and howis it different?
- What will carry over from your flagship store to your other stores? How will that occur?
Some of the most memorable U.S. flagship stores include:
Ralph Lauren New York867 Madison Avenue, New York
Prada Beverly Hills343 N Rodeo Drive, Beverly Hills
Alexander McQueen Los Angeles8379 Melrose Avenue, Los Angeles
Brian Atwood New York655 Madison Avenue, New York
Blanc de Chine NYC673 Fifth Avenue, New York
Burberry Chicago633 N Michigan Avenue, Chicago
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Nordstrom Seattle500 Pine Street, Seattle
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Zara South Beach420 Lincoln Road, Miami Beach
Neiman Marcus Dallas1618 Main Street, Dallas
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