The Store Within ... Target and Wal-Mart
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The whole "store within a store" concept seems to be catching on. Although companies like Ralph Lauren and Fifth and Pacific have been doing it for years in department stores, the big boxes are giving it a go. Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) are attempting to increase the value of their brands by working with other highly regarded brands and hopefully encouraging the consumer to think of multiple, seemingly disparate, companies in a complementary way.
Target might be the most recognizable company engaging in this kind of strategy, and they are certainly the most successful. Starting in 2006 with their GO International campaign, Target worked to bring haute couture to its customers. That is, by removing all the haute and couture and just selling clothes with a neat label. OK that sounds snotty… but really. The most recent iteration of Target's store within a store, the Shops at Target, features products from boutiques from around the country… kinda. One of the boutiques is the Cos Bar, a retailer that sells things like $250 sunscreen and $90 lip balm. The Target version of Cos Bar sells Cos Bar branded items that never existed in the real Cos Bar to begin with (kind of how I feel about Nordstrom Rack, but that's another article entirely).
Whatever the quality of the product, the brand is invaluable. Having the names of such exclusive brands at Target inevitably elevates the value of the other more common items surrounding it. Tide detergent at Safeway is just some goop to wash your clothes with. But at Target, Tide becomes pop art. The ads are even Warholian in nature, and I don't think this would be possible without the inextricable link to fashion provided by the store within a store.
Another company trying to use a more popular brand to increase its own (social) popularity is Wal-Mart with Apple (NASDAQ: AAPL). Even though Steve might be disagreeing from above, there is currently a mini-Apple Store within Wal-Mart testing in Lowell, Arkansas. By using the brand equity Apple has cultivated for so long, Wal-Mart can make themselves look a bit better. Whether or not the mini stores will command the highest sales per square foot in the world, as the real Apple Stores do, remains to be seen. Personally, I think the Apple Store, like every other Apple product, was conceived with a very specific experience in mind, and a mini-store simply will not do it justice.
The same goes for the boutiques within Target or the Ralph Lauren stall at Macy's. So, this begs the question, who benefits more from this concept? The store? Or the store within?
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