“Coffee-shopping” is a trend in China that’s disrupting the traditional brick and mortar retail experience. When customers are coffee-shopping, they peruse in-stock items on a tablet, rather than on the shelves and racks of a retailer. It’s so named for the social, cafe-like, atmosphere that’s designed to entice shoppers to spend time in physical locations.
While it’s making waves of late overseas, it’s not a novel model and not particularly foreign. The cafe-inspired retail space has roots in a company long-known as a vanguard of innovation in the United States. Since the 2001 opening of their first physical store, Apple has made headlines for their disruptive approach to retail that is, itself, more cafe than traditional storefront with a coffee-house table layout and friendly atmosphere. (In fact, before the Apple Store adopted its quintessential modern identity, it was almost literally a cafe.)
And Apple’s not alone. With the rise of coffee-shopping in China, we’ll see more retailers adopt the core of what made Apple’s retail model so successful. Here’s why coffee shopping works, and what we can learn from retailers reaping its rewards.
Coffee-Shopping Appeals To Millennials
Accenture estimates that Millennials spend $600 billion annually in the United States. It follows that retailers are vying to earn their affection – and ultimately their hard-won dollars. But appealing to a demographic that’s more inclined to spend on a rideshare service than a new pair of shoes has proven difficult.
The tendency of Millennials to seek out inexpensive alternatives to owning everything from houses to trendy clothes – which served as a catalyst for sharing economy options like Airbnb, Rent the Runway, and Uber – puts the traditional retail model at risk.
“Retail has changed through the generations,” says Jim Joseph, Worldwide President of global communications firm, Cohn & Wolfe, and professor at NYU teaching Master’s courses on integrative marketing. “Millennials don’t necessarily want to go shopping in the traditional sense of browsing through stores. They don’t want to use their time that way, anymore. They’d rather participate in an experience that’s adding more value to their lives.”
It’s not all bad for bricks and mortar, though. In fact, many Millennials prefer to shop in store and retailers can benefit from understanding the cohort’s shopping habits. Building cafe-inspired showrooms fosters a culture that enriches the shopping experience, which shows Millennials that retailers are willing to invest in what’s important to them.
De-Emphasizing Merchandise Allows Retailers To Focus On Experience
According to Joseph, the key to coffee-shopping’s success is de-emphasizing merchandise which allows retailers to focus on what’s really valuable to Millennials: an experience.
He points to Bonobos, an online turned brick-and-mortar retailer, as a good example. The menswear line emphasizes e-commerce but has opened physical locations, called “Guideshops,” to allow their patrons to try on clothes which are then sent to a customer’s door.
Typical of coffee-shopping, Bonobos de-emphasizes merchandising in favor of the alluring atmosphere of their physical retail location. Guideshops are not flooded with racks of merchandise typical of traditional clothing stores. They resemble a neat, high-fashion closet and tout one-on-one service with complimentary style advice.
By focusing on an experience, retailers empower consumers to “try on” an appealing lifestyle – just as they do when they rent an Airbnb villa in Italy or spring for an Uber Select – making a storefront a destination for more than just its wares.
Foot Traffic And E-Commerce Are Not Mutually Exclusive
While emphasizing an experience over an e-commerce transaction seems straightforward, it has been hard for physical retailers to adopt. Macy’s, for example, recently announced plans to close one-hundred stores over the next few years in response to dwindling sales.
And while countless articles point to the rise of e-commerce as the culprit, the success of coffee-shopping suggests that the failure of traditional bricks and mortar has less to do with the e-commerce overtaking and more to do with a failure to connect online and offline channels. After all, the core of the model has shoppers using tablets to scroll through inventory.
Warby Parker is an excellent example. Like Bonobos, Warby Parker is an e-commerce first retailer. They make it easy for customers to shop online – even for an accessory as personal as glasses – through a home try-on program that sends five pairs of glasses, for free, to potential patrons. They’ve even rolled out an online prescription test designed to make the eye exam process more efficient, potentially bypassing the need for an optometry appointment for customers that qualify.
With a solid e-commerce strategy, Warby Parker’s physical stores began as a marketing experiment of sorts. But the benefits of the retail destination were quickly unveiled, and Warby Parker storefronts became one of its key growth catalysts.
“Those first few shops were generating nearly unmatched sales figures–$3,000 per square foot, a number topped only by Apple stores,” relates Tom Foster in a recent Inc. Magazine article.
The meticulously depicted beach-club lifestyle conveyed by Warby Parker locations invites customers to participate in a culture, just as Bonobos does. Moreover, while both retailers embrace e-commerce, they use their physical storefronts to build relationships with customers that survive past a digital transaction.
While a significant fraction of the brick-and-mortar retailers are reeling from the incipient wave of change in how consumers want to spend their money, some are embracing the coffee shopping culture and reaping the rewards. The social environment that offers a destination experience — a shared ethos and a de-emphasis on merchandise in exchange for enhancing the value of the customer’s time along with the value of their dollar — can all be gleaned from the way we behave at the corner cafe.