Retailers install bars, hoping to lure shoppers offline
NEW YORK CITY — Work's out and it's time for happy hour. Where to go for a stiff drink?
One surprising destination of choice: Urban Outfitters. The hipster retailer has begun to offer customers much more than clothing at certain locations. Now visitors can shop, or just head for its bar area.
Aiming to stand out in a world overflowing with retail shops and online competitors, some chains want to become destinations for diners and drinkers, not just shoppers.
The Urban Outfitters here in Brooklyn, called Space Ninety 8, has two bars — one on the roof and another on the third floor near the men's department — as well as an Israeli barbecue restaurant. The store doesn't discourage walking around the clothing displays with a drink in hand.
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Urban Outfitters has two other stores with bars — one in Los Angeles and another in Austin.
It's not alone:
• Barnes & Noble — which already has in-store cafes — plans to open some stores this fall that will include sit-down restaurants and have alcohol on the menu.
• A Target store in Chicago has a Starbucks that serves the coffee chain's "evenings" menu with wine and beer.
• Accessories retailer Shinola, best known for its high-end wristwatches, is partnering with Washington-based bar owner Derek Brown on a drink concept set to open in its store there next year.
Standalone retailers are borrowing the time-tested technique of shopping malls and high-end department stores, where quick Chinese food or ritzy cafes have long offered respite to exhausted customers. Now the strategy is being adopted as a survival technique by shops that once might have frowned at letting customers roam displays of blouses and leather handbags while carrying food or a drink.
"You have to give people a reason to come to the store other than just duplicating what they can buy online," says Shinola Chief Marketing Officer Bridget Russo.
Those who come in for edible fare may be more apt to linger, and in turn, spend more time with the merchandise, says James Sundstad, vice president of branded environments at strategy, branding and retail design firm CBX. "You're giving them a reason to be there that isn’t just about buy something or get out," he says.
The recent performance of retail shops vs. restaurants offers an idea of why retailers are embracing this strategy. Restaurant sales increased 10% between April 2014 and April 2015, according to data from research firm Nielsen. Retail sales — excluding food and auto sales — have had about 2% to 4% growth in recent years, according to Department of Commerce figures.
People may not be in the market for a new shirt or pair of jeans very often, but "everyone’s eating out at some point during the week," says Anjee Solanki, national director of retail services in the U.S. for real estate firm Colliers International.
For the new Barnes & Noble restaurant concept, it's expected that food and beverage will make up more of the store's sales than those categories do now — at less than 10% — as well as drive traffic through the rest of the store, says Jaime Carey, president of development and restaurant group for the chain.
At Urban Outfitters' amped-up stores, which also host events such as movie nights, the company wanted to create a place that would appeal to its young, adventurous customer base and give them "experiences you cannot order online," says Global Chief Creative Director Sue Otto.
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Many of the young adults on the rooftop bar on a recent evening came solely for the drinks and the atmosphere. Ashley Delamarter, 32, and her friend Brittany Leslie, 27, sipped on glasses of rosé while chatting in a wooden cabana.
"I don't feel like I have to come here just because I'm shopping," Delamarter said. "You can just come hang out." Delamarter said she only occasionally shops at Urban Outfitters.
The business arrangements can vary when it comes to restaurants and bars opening in retail locations. Otto declined to give sales figures for the stores, only saying "we’re happy with the idea and we’re going forward with it."
Target spokeswoman Amy Joiner declined to say how the new Starbucks concept is affecting overall sales and traffic in the Chicago store. Employees have noticed groups of friends often meet there after work for a drink, she says, though customers aren't allowed to leave the dining area with alcohol.
Still, a customer with the time to sip on a glass of wine may be more likely to linger, browsing for books or picking up a new candle for the bedroom. Will a tipsy shopper be more likely to buy? Maybe. Either way, the experience forces customers to slow down, Sundstad says.
Follow Hadley Malcolm on Twitter @hadleypdxdc.