Shop-in-shop, store-within-a-store, in-store shop, concession, in-store concept. Whatever you call the concept, they could be defined as a designated space within a host retailer that is dedicated to a specific consumer brand, allowing them to sell goods under their own brand name. The shop-in-shop retail concept is not new, but has gained momentum in the last couple of years. The beauty of a store-within-a-store is that both the consumer brand and retailer (typically big box retailers) are benefitting from creating these symbiotic arrangements. Some of the shop-in-shops have become so popular they are viewed as destination shops, where the consumer specifically heads to that store for that brand.

Benefits of Retailer and Brand Collaborations

Brand manufacturers are rethinking ways to reach consumers directly and retailers are permitting them to make a clear brand and price statement at the point of purchase. Some specific benefits that make the arrangements a win-win:

• Breathe new life into a large retailer company by offering these specialty shops

• Consumer shopping brands are able to create a larger presence in the store

• Shoppers have access to intimate brand experiences within the retail store space

• Retailers can designate space for a smaller shop, and they don’t have to worry about merchandising and filling the retail space

• Shops become destinations and increase foot traffic into the larger store space

• Specialty shops can act as “pop ups” and create excitement around a product or brand

• Online retailers can test out a brick and mortar retail space with a “shop in shop” experience

• It is convenient for shoppers

Some Success Stories and Why

When successful, a store-within-a-store arrangement will improve the appeal of both brands involved.

• A collaboration that many shoppers have become familiar with is the Sephora brands located inside JCPenney stores. This combo started up back in 2006 and, currently, there are more than 375 JCPenney stores that feature Sephora shops. Most of these spaces are around 2000 square feet and sell a large arrangement of beauty products. Each space became a destination shop for many shoppers, which in turn, is a win for the struggling retailer.

• In 2013, mobile phone company Samsung launched 1400 “Samsung Experience” mini phone stores inside Best Buys across the country. The mobile phone kiosks have been an opportunity for Samsung to showcase their products and allow customers to have a hands-on experience with their products while increasing their brand and company awareness. This year, Samsung plans to expand their mini stores in Best Buys in Canada and across Europe.

• Online retailer, Bonobos, partnered with Nordstrom in 2012 to transform their online store into specialty shops within 20 Nordstrom locations. The brand has also opened 11 stores within another retailer’s, Belk, department stores. This has proved to be a great way for online only brands to test the waters of a brick and mortar concept, allowing consumers to interact with their products and another retailer’s.

Some Bad Examples and Why They Didn’t Work

While many collaborations have been successful, some of these partnerships have brought to light some factors to consider when bringing in specialty shops to a larger retail store.

• Know your customer base: When JCPenney started introducing boutique style shop-in-shops in 2012, it was nice for attracting a new generation of customers, but many loyal customers did not want to see upscale boutique shops and the change was too dramatic for them.

• Target made a similar mistake when they partnered with high-profile company Neiman Marcus in 2012 to launch a Holiday Shop, in which items were significantly more expensive in price than most Target brands. This collaboration did not bode well with the price savvy Target shopper.

• Use brands that are recognizable to your customer: Target has partnered with several brands for specialty shop-inshops, including Missoni, Jason Wu, and currently Peter Pilotto. While the shop-in-shop method may be great designers, they may not be recognizable to many Target shoppers.