The rise of the Un-Store

There’s been a lot of talk on US retailers embracing the “un-store” – a retail space that doesn’t stock products. By ditching the instant sales-based model in favour of one that focuses on customer engagement, product education and services, the shopping experience becomes less about the bottom line and more about top-line brand engagement and loyalty-building. Here at Office Twelve, it’s always been about the environment and the experience. We take a look at some of the brands who are leading the way.

For Dyson, the ability to demonstrate product performance is important, as the brand commands a premium price based on engineering. “The shop is an opportunity to prove to people that it really does work,” company founder and inventor James Dyson said in New York last month.

“In order for people to understand how our technology works, it is imperative they have the opportunity to test and experience our products. This space is designed with that in mind. There isn’t another place in the world that captures Dyson – our spirit and our machines – like the Dyson Demo. It’s quite exciting to be opening in New York City, bringing hair science and purified air to Fifth Avenue,” says James Dyson, Chief Engineer and Chairman.

Samsung’s 837 store in New York lets consumers test drive their latest devices and smart-home gadgets, sign up for a workshop on how to use their touchscreen-enabled refrigerators, stroll through a VR tunnel and watch their entire Instagram profile unfold before them in a dazzling display.

It’s three floors of cutting-edge technology spread over 56,000 sq ft —and you can’t buy a single thing.

By rejecting the traditional sales-based model for one that focuses on customer engagement, product education and services, the shopping experience becomes less about the bottom line, and more about top-line brand engagement and loyalty-building.

“It’s more about that intangible result,” says Michael Koch, Samsung’s senior director of store development, who first referenced the un-store concept during his closing keynote presentation at the International Retail Design Conference in New Orleans last September. Samsung 837 is designed to be a comfortable environment where consumers can relax without pressure from a sales associates. They’re free to spend time learning about products and interacting with them, which in turn boosts their connection to and understanding of the brand.

In its first 10 months, almost a half million people passed through the space.

Whether those visits were to see Gwen Stefani perform, attend a cooking demo or snap a photo at the Selfie Station, those interactions can give the retailer more valuable information than money can buy. Store visit data can determine if a particular campaign is working, or gauge levels of interest in a one product over another.

“At 837, you can spend as much time as you like,” Koch says. “I don’t care when you leave. I don’t care how many questions you ask. I don’t care if you sit there all day on that phone or on that tablet. Mess with that refrigerator all day long until you’re happy with it. The data that comes from that particular interaction…you can’t quantify just how much information we’ve been receiving from it.”

“We’re constantly listening and evolving with our customers,” says Shea Jensen, Nordstrom’s senior VP of customer experience. “

For example, we know that driving in LA traffic can be challenging and can often take customers a long time to get to one of our stores, even if it’s a few miles away.” While Jensen says there are no current plans to open more locations, the hope is that the store will provide a convenient, central hub to better serve its West Hollywood customers.

Buying online sight-unseen can be risky as well as impersonal. Would you buy an engagement ring like this? US jewellery retailer Blue Nile existed solely online for sixteen years before opening it’s first physical un-store in 2015.

Its portfolio now includes six “Webroom” stores, the latest of which opened this November in Salem, New Hampshire.

“As much as we educate the consumer on the ability to buy diamonds and fine jewellery online—and you can, we’ve built a successful business under that model—we recognize that the consumer wants to shop where they want to shop and a certain segment wants to look at the styles in person,” says Josh Holland, Blue Nile’s director of brand experience.

Blue Nile’s webroom un-stores don’t stock anything and average around 500 to 700 square feet.

They feature a curated selection of jewellery with an emphasis on engagement rings, which make up approximately 70% of the company’s business. According to Holland, customers spend anywhere from 20 minutes to two hours inside its stores trying on different ring styles and learning about diamonds. The one difference here is that customers can make an online purchase via an in-store tablet. It’s then shipped directly to their home for free.

Blue Nile has seen positive results since opening physical locations.

When a customer visits a Webroom, the average spend on an engagement ring increases to $7,500, compared to $6,400 when purchased online. Holland notes that the first four of its Webrooms experienced year-on-year growth. He also credits the un-stores as a successful marketing channel. “A lot of people, when they come across our Webrooms, have never heard of Blue Nile before,” he says.

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