The idea of the global flagship store as a brand showpiece may sound irrelevant in a world of e-commerce, social commerce, and emerging AI chatbots that can shop on your behalf. A throwback to a time when physical retail was the only game in town.

Except this view doesn’t reflect reality. Around the world brands are investing in opening new flagships and upgrading existing spaces, including the digital-first and D2C brands that have been born from the online retail boom.

Why?

Image credit – Jack Stratten

A test ground

One reason behind the continuing presence of the global flagship is the fight for visibility that all brands are undergoing. If attention is the new currency, then brands need to be in front of consumers to get paid.

And one of the best ways to be seen is still to open a physical store.

But brands aren’t investing huge amounts of money in flagship concepts just to improve visibility.

When wellness brand Rituals launched its new service-led concept – Mind Oasis – it did so in its Amsterdam flagship. Lacoste’s brand shift started with a Paris flagship. And every time Sephora opens a new flagship, all eyes are on the brand to see what’s new.

The flagship store has become a place for brands to test new ideas and technology and reposition themselves. This includes new services, display tech, automated checkouts, digital fitting rooms, branding, and design. These spaces can be high concept because they’re about learning, as much as they are sales.

Not everything gets rolled out elsewhere or becomes a core part of the business strategy. But that’s the point of testing.

And a flagship store has the right kind of audience for testing.

Image credit – Jack Stratten

Leveraging pull

Flagships have pull – they attract tourists, as well as locals who live nearby. But they also attract people who live in the same country but not the same city and make a day out of visiting these types of spaces.

When you’re a retail business with multiple stores in multiple cities and countries globally, this is the kind of audience you need to see what resonates. If a service or layout or design works for that mix of audience, then arguably it will work when you put it into the stores near to those customers.

This is becoming more apparent as retailers increasingly understand that marketing and selling aren’t separate things in physical retail. That having a buzzy flagship store that is all about marketing and utilitarian stores that are all about sales doesn’t reflect customer journeys today.

Customers want to be inspired in their local stores as much as they want to be able to actually buy the things they see in the flagship concept space. 

IKEA proves this beautifully in its new Oxford Street flagship in London. It’s a space that is instantly recognisable as an IKEA store that incorporates all the best parts of its existing experience. But it then pushes this further to make the space as useful and engaging as possible for this store’s audience, featuring room sets and curated product selections created by actual Londoners.

Because – as it turns out – flagship stores are a great place to capture meaningful information about your customers. 

Image credit – Jack Stratten

The ‘halo effect’ of being memorable

It’s well known that physical stores have a halo effect on online sales – a brand’s e-commerce sales go up in an area when they open a physical store. Once again, this comes back to being visible.

But there’s also a halo effect connected to being memorable. First coined by psychologist Edward Thorndike, the halo effect describes the tendency for our positive judgments or impressions of one attribute – say a great store design – to influence our perception of a brand or person as a whole.

So, if a store is well designed then we may extrapolate that to think that the customer experience will be good before we even experience it.

Basically, if a brand or store gets one thing right and offers a positive experience, the customer is more likely to think positively about the brand as a whole. This means that memorable retail spaces help to develop positive associations in consumers. 

Here’s where you need to expand your definition of memorable. Because the default is to associate being memorable with big, flashy concepts like slides, gimmicky tech installations, and selfie areas. Stuff that sounds good on a press release and looks good in photos.

And, sure, customers may remember the flagship store with a slide in it, but they may also remember it as the store where they had to queue for ages. They may remember it as being actually quite boring and leaving without buying anything because the store was hard to walk around and find anything.

If you think back to any brand reviews you’ve ever read, positive or negative, you’ll realise that the same things come up again and again. Customers talk about the staff, the service, the queues, the stock, the navigation, the store environment. They talk about the experience of finding and buying things.

These are the things that actually make a store memorable and can create that positive halo effect.

Image credit – Jack Stratten

The right tech foundation

This is where retail technology is really stepping up. The latest advancements in fundamental systems – like POS – can help brands and retailers increase their visibility and understanding of customers.

For example, POS is no longer just a place where customers pay but also somewhere to gather information about their experience.

The right tech foundation helps to create that valuable memorable halo effect by making all the stuff customers care about and notice work better. This includes making information easier and faster for staff to find, keeping stock levels up to date to avoid disappointment, cutting queue times, and linking up the customer journey.

Because as much as the expectation might be for slides, selfie spaces, or gimmicky tech installations, a flagship store is actually about developing the most enhanced experience of that brand as possible.

That’s what makes it worth visiting. That’s what makes it memorable. And that’s why brands keep opening them.