At the height of the pandemic, visiting physical stores was a risky proposition. If they were open, getting inside required the precision of a drill: masked, smeared with disinfectant, and trying to get out as quickly as possible. But as we head into 2022, even as new variants of the virus continue to spread, consumers seem eager to return to the old-fashioned pleasure of shopping. And brands can’t wait to welcome them.
Take the new flagship store from children’s housewares startup Lalo, which opened in New York’s NoHo neighborhood in November. The space is designed for parents and their little ones to pull up a (high) chair and stay for a while. There is a “Play Café” where children are greeted by a butler who offers them a menu of activities, including Play-Doh colors cut to resemble ice cream. There is a breastfeeding corner for moms who need a private area to breastfeed or pump. There are classes for parents on sleep training, music lessons for children, postnatal workouts, and massage sessions. And, of course, there are experts on hand who can help customers choose the right products for their home. (Since the arrival of the omicron wave in New York City, Lalo has asked visitors – who must be vaccinated – to complete an on-site contact tracing form.)
Lalo is far from the only one investing in physical space. Brands are opening stores at the fastest pace in years, surpassing pre-2019 levels. By the end of August, retailers had announced 4,616 new store openings, a 50% increase over the full year of 2020. And Although the pandemic is far from over, many brands are returning to the pre-pandemic trend of creating immersive and experiential retail experiences.
Do not wait for the end of the pandemic
When the pandemic struck in early 2020, it took a heavy toll on the retail industry. The closures forced physical stores to close, and consumer spending on clothing and experiences fell 24%. The retail sector saw sales decline 10.5% to nearly $ 5,000 billion, a level not seen since 2016. As a result, many companies have filed for bankruptcy, including Lord & Taylor, J.Crew, Neiman Marcus and JC Penney. But in 2021, things started to change. Even though the pandemic was still raging, vaccines became available and consumers began a temporary return to in-person shopping.
Lalo founders Greg Davidson and Michael Wieder paid special attention to consumer behavior. They launched their brand in 2019 and grew their business online, an approach that has worked well during the pandemic. But since their brand focused on things like high chairs and gaming tables, they knew some consumers would want to see products in person before they bought, so it was important to open a physical store. The question was when.
“There were several times when experts predicted a return to normal, such as people returning to work in the fall,” Davidson recalls. “But then the delta variant came along. In the end, we decided that there wouldn’t be a clear end to the pandemic, so we just had to adapt to this new normal. “
In the fall, they took the plunge by finding a space at NoHo near a playground and bakeries frequented by young families. They spent time creating a space that would be an oasis for exhausted young parents. But they also went to great lengths to take even more precautions than the city demanded, such as requiring vaccinations for customers and employees, to keep everyone feeling safe. The interior is regularly disinfected, class sizes are limited and all adults are required to wear masks. And these efforts seem to be paying off.
“The foot traffic in our store exceeded our expectations,” says Wieder. “Parents in New York City have been locked in tiny apartments for months and see our store as a place to bring their kids.” This translated into sales. Wieder’s Notes: Customers who stop by start outfitting their home with Lalo furniture, then add the toys and activities sold in the store.
It’s not just startups investing in immersive, COVID-friendly in-store experiences. Swedish luxury mattress brand Hästens, founded in 1852, wanted to expand its presence in the United States before the pandemic struck. In late 2020, the company developed a concept called Sleep Spa, with five locations in New York City and three in Los Angeles, more than a traditional mattress showroom. Instead, as the name suggests, these locations are designed to help customers improve their quality of sleep. Clients can schedule an hour-long appointment to chat with experts on how to feel more rested. There are also classes that promote better sleep patterns through yoga, meditation, and breathing work. (With the rise of omicron, Hästens now only allows one customer to enter the store at a time, working with a single representative.)
“We had already developed the concept before the pandemic,” explains Carl Larsson, Managing Partner. “But we emphasized the exclusivity of the experience, which tends to reassure customers that they know they will be one-on-one with someone.”
Larsson believes experiential retail will come back in force in 2022 and make it even harder for brands to differentiate themselves. Before COVID-19, brands turned to increasingly fanciful in-person activations to grab the attention of consumers. Often, Larsson says, these experiences had nothing to do with the product or brand values. With that in mind, he thought about creative ways to bring Hästens to the US market in a way that made sense for the brand.
Earlier this month, he launched an outdoor art installation in Joshua Tree, California, for people to experience a Hästens bed in the middle of nature. The company spent six months building a 14-foot round version of a Hästens mattress in the iconic Doolittle House, designed by Frank Lloyd Wright’s protégé Kendrick Bangs Kellogg. The idea was to turn the space into a common room where people can lie down and relax while enjoying the view.
“The partnership with Doolittle House was authentic and synergistic, from innovation to sustainability, and epitomizes architecture and craftsmanship,” said Larsson.
Many brands don’t just invest in in-store experiences; some are also expanding their existing footprint. Take, for example, Jenni Kayne, the eponymous fashion and lifestyle brand launched in 2003. For years, the company has grown slowly, gaining followers in Los Angeles, where the founder is from, then more widely in California.
As a brand that focuses on furniture, housewares and comfy sweaters, Jenni Kayne has done well during the pandemic, quadrupling its revenue from 2019 to 2021 to $ 100 million. Amid the lockdowns, customers still flocked in line to buy candles and blankets. Then, when the cities reopened, customers returned to the brand’s 13 stores, located in Palo Alto, California; Seattle; Boston; and beyond. These stores tend to have a small footprint and are located in neighborhoods close to restaurants. Like Lalo’s sites, these are places of community gathering: they offer free massages and wellness treatments on Wednesdays, and organize events like book signings.
CEO Julia Hunter believes that a key to the brand’s continued growth is to open more stores across the country; She expects to double the brand’s footprint in 2022, noting that physical stores tend to be very profitable, with the average customer spending $ 400. But more than that, they create brand awareness, leading to increased online sales. “Our stores are very small but productive,” says Hunter. “Customers who buy from our retail stores have six times the lifetime value of customers who buy only online. “
With the omicron variant spreading rapidly, the brand says it still has new store openings in 2022. However, it will remain flexible. “We have adapted our in-store strategy throughout the pandemic,” says COO Lauren Holmes, noting that the brand turned to digital events early on. “We will continue to take similar actions as the COVID landscape evolves, serving customers as they feel most comfortable, whether it’s in-person purchases, phone orders, or pickups. “
Neighborhood Goods, a retail concept that brings together brands only online into a kind of modern department store, also plans to increase its physical footprint in 2022. The company was launched in 2017 and now has stores in Plano and Austin, Texas, as well as New York. These locations feature a rotating range of trendy offerings from candle brand Boy Smells, beauty brand Megababe, eco-friendly Who Gives a Crap toilet paper, and Tonal home workout technology. Each store also has a restaurant with a rotating menu, often featuring in-store brands.
The stores closed for several months in 2020, before reopening in the summer. Matt Alexander, founder and CEO of Neighborhood Goods, said he was particularly concerned about protecting employees during the pandemic. The company requires vaccinations for all employees and offers time off for reminders and testing, and paid time off for those who contract the coronavirus. He says foot traffic has increased throughout 2021, but given the increase in COVID-19 cases in the country, he’s ready to pivot.
“If we were to see a large epidemic, we would temporarily close the store to avoid overloading an understaffed team,” he says. “Going forward, we will continue to be cautious of events, as we have done throughout the pandemic. Otherwise, it is our intention, as is, to continue to operate normally with our health and safety protocols in place. “
He points out that before the pandemic, stores like his billed themselves as community centers, where people could meet friends and feel like part of their neighborhood. It’s still a focal point, which is why Alexander is actively working on building new locations across the country in 2022, although he has yet to disclose the details. “Even though the future of the pandemic is uncertain,” he said, “people seem to have a strong desire to come back to the world”.