How is it possible that retailers such as Urban Outfitters and Hot Topic, The Buckle Aeropostale, Anthropology, The Buckle and The Buckle seem to defy gravity. Each of these retailers has posted very positive results over the past few quarters in an environment where very few publicly traded retail companies posted any comp store increases. These stores seem to be able do something that no other retailer can, especially in the specialty shop segment.
These stores are a testament to the fact a focused and strong retailer can achieve extraordinary success even in difficult economic times. Urban Outfitters Inc operates Urban Outfitters and Anthropology. Richard Hayne, the founder and chairman of Urban Outfitters Inc, is often quoted for his belief in “big is the enemy to cool”. Many observers have pointed out that the company would prefer to open new concepts in established markets rather than overcrowding every retail corner with new stores. The company values execution and recognizes that no two stores will be the same.
These are all valuable lessons to take away from this story. But there is another lesson that can be learned for small-scale entrepreneurs who want to build a sustainable, profitable strategy for the future.
You’ll notice a lot more at Urban Outfitters and Anthropology than you would expect. You can see that they sell apparel and accessories as soon as you enter the store. But, there are also home furnishings and decor. Books and other knick-knacks are available, and furniture is sometimes found. You’ll notice the store layout, decor, salespeople, and customers. This story is told by the customers. This store is not about the stuff, it’s about the mindset, attitude, and lifestyle.
Although it is not new to build a store around a lifestyle or an attitude, it has rarely been done at the scale and impact of these stores. These stores offer a glimpse into the future of retailing within a Long Tail market. You can also see the potential for small-scale entrepreneurs to expand these concepts on their own niches and strategies. This is what’s known as lifestyle retailing. Lifestyle retailing is a practice that has been used by the best small entrepreneurs for many years.
Lifestyle retailing is a different approach to traditional retailing. Although it may sound cliché to say that lifestyle retailing focuses on customers, you will see that this is a key characteristic.
Traditional retailing begins with the products and services that will be offered. This could be due to a entrepreneur’s product knowledge or entrepreneur’s experience in a specific market. It’s product-driven and asks “What are we selling, and to whom?” Growth can be defined as reaching a wider audience, expanding customer base, or finding more customers to buy from. It is most commonly measured by transaction count.
Lifestyle retailing starts with your attitude and lifestyle, and everything it represents. It is narrow, exclusive and focuses on a specific niche. It is customer-driven and focused on a very narrowly defined customer, who can identify with the lifestyle and attitude it promotes and wants to be part of it. The first question is “These are our customers. What can we offer them that truly represents the lifestyle they desire?” These customers can grow by providing a wide range of products and services in almost unlimited categories. Growth is measured by the number of transactions.
Lifestyle retailing is all about the physical store. Its decor and ambiance are what define the lifestyle. Unique, unique and conceptual stores are distinctive. The store is more than just a display of merchandise. It is also a carefully thought-out combination of space, materials textures, colors and sounds that excite the senses. To fully experience the lifestyle is to enter the store.
Salespeople make the experience more enjoyable by sharing their knowledge, enthusiasm, and interest with guests. This isn’t acting, it is real life for them. They are the embodiment of the lifestyle, and their dress, hair, manner, voice, and vocabulary all play an important part in the experience. Because they are intimately connected to the lifestyle, they interact with customers in the same way as with their family. They are socially connected to their customers in a deeply sociological way.
In this context, business can be transacted. Because customers aren’t just buying merchandise but also participating in the community and the lifestyle, price is not as important as it was in other retail strategies. Because the lifestyle drives the assortments, they are more broad and shallow than narrow and deep. New items are key to increasing the number of visits and the number of units per transaction. Although the merchandise may appear to be discretionary, it is essential because it is closely tied to the customer’s identity. It is, therefore, a fashion company.
The opportunity for entrepreneurs to sell retail products is obvious as the retail landscape becomes fragmented between corporate retailing and price-driven commoditization. It is possible to build a strong retail presence and business by marketing passionately around a personal interest or lifestyle.