Why Store-Within-a-Store Concepts are Essential for Brands

Sephora at Kohl's

The physical shopping experience will always have a place in retail, but many retailers aren’t taking full advantage of their retail space. Store-within-a-store concepts offer an option that can help please customers and enhance the in-person shopping experience. 

The store-within-a-store (SWAS) retail model is quickly gaining traction, with major retailers like Target and Lowe's dedicating a small portion of their physical spaces for smaller brands to set up a shop or display. 

SWAS is reminiscent of department stores, where multiple retailers would come together to combine existing resources (and customer bases) into a single channel. It supports consumers' desire for convenient, Amazon-like shopping experiences by offering a more diverse set of products in a single location. It also allows each of the partnering retailers the chance to reach more customers than they could on their own. 

While SWAS offers upsides for brands at a relatively low cost, these partnerships can easily fall flat if both parties aren’t aligned on the approach. To carry out a successful SWAS partnership, brand leaders must be smart about whom they choose to partner with and continuously work to improve the relationship over time. 

What Factors Can Make or Break Your SWAS Partnership?

SWAS partnerships are low risk and high reward for both up-and-coming brands and well-established brands trying to reach new customer bases. They enable retailers to surprise and delight customers where they’re already shopping. These partnerships require relatively small time and financial commitments, yet can lead to increased sales, footholds in new markets, and fruitful business relationships.

With that in mind, here are four keys to a successful SWAS partnership:

1. Focus on Product Alignment

One of the biggest reasons SWAS partnerships fail is a mismatch between products, either in terms of price, style, or function. To avoid this, consider which of your products are best suited to the retailer’s customer base. In some cases, you may need to create an entirely separate product line that fits the preferences of your retailer’s target market. 

Fit doesn’t stop at products — you’ll also need to consider the type of product information you need to carry out the collaboration. Product information includes branding, messaging, format, and other factors — each of which must stand on its own while matching the aesthetic of the other retailer. This is easier said than done, as each brand enters the partnership with its own data systems and formatting standards. To align these, brands must have full visibility into their data and be able to manipulate it to match their new partner.

Improper alignment can lead to an inconsistent customer experience. For example, Target customers are used to a certain level of depth and detail when shopping at Target stores. As Kendra Scott has announced it is launching a collection within certain Target locations, it needs to offer the same in-depth product data to appeal to those same customers. 

2. Analyze Performance Data

Beyond matching product information, your brand must also have access to actionable performance data to gauge which products are performing and which are struggling to capture customer attention. 

This data provides insights you can use to optimize your SWAS partnership over time. Continuous monitoring of performance data is essential for making well-informed adjustments and communicating insights to your partner. 

3. Consider the Length and Timing of the Partnership

SWAS partnerships can come in many shapes and sizes, from temporary pop-up shops to permanent arrangements. To decide which form your partnership should take, consider if there’s a gap that you can fill for the retailer — and how vital this gap is to their bottom line. For example, a well-established jewelry and accessories retailer and an upstart beauty brand might equally benefit from a more in-depth partnership. 

However, short-term partnerships are also a useful option for brands that want to capitalize on a period of increased customer demand — like the holiday season, for instance. In this scenario, your brand can generate a massive amount of buzz in a short period of time.

4. Leverage Local Inventory Ads

Once the right SWAS partnership is established, consumers need to know it exists. Setting up local inventory ads can help promote the combined offerings to online shoppers and direct them to specific physical stores to complete the transaction. For instance, Kendra Scott can target online shoppers with product ads that direct them to their nearest Target. 

Bear in mind, local inventory ads are only effective if they’re powered by product feeds that are updated in real-time. You don’t want to direct people to pick up an item in-store that turns out to be out-of-stock. 

SWAS Partnerships Can Elevate Your Brand

SWAS partnerships aren’t a new concept in the retail space, but they’re gaining traction. As brands across industries continue pooling resources and customer bases — from the consolidation of streaming services to subscription services like ClassPass — it’s clear that multi-brand partnerships are worth considering. 

But whether you’re a new or established retailer, you’ll need to understand the nuances of the SWAS model and work with the right partner to achieve success. 

— Vincent Peters, CEO, Productsup

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