America has evolved over the decades and commerce has dutifully adapted to the needs of the consumer.
A Brief History of Retail:
From the quaint downtown shopping experience to the rise of department stores that were soon overshadowed by the colossal structure of malls, these physical manifestations of consumer shopping behaviors and desires were soon brought to their brick-and-mortar knees by ecommerce.
The endless nature of the ecommerce shopping experience that has grown to be omnipresent has made physical retail suffer. Brands soon adapted to offer their own digital experiences for consumption and upgraded their systems for easy delivery and pick-up.
Just as each of these changes has been rooted in the behavioral shifts of consumers, I believe the next shift is afoot and has already been proven.
Private Labels and Subbrands:
Being a brand strategist I can’t help but notice when brands make moves. When I saw retailers like Target and Walmart follow the wise footsteps of brands like Trader Joe’s and Costco I had to take note. First off I love Trader Joe’s and Costco, so I’m biased… however, I’m not alone in my love for these brands! (Which is a testament of the accuracy of my observation if not just my sanity to the very least…)
Over the last 9 or so years, retailers like Target have been introducing and testing subbrands or what the retail industry likes to call “private labels.” From a brand architectural standpoint, I refer to them as subbrands since they are not only portrayed differently in visuals but are actually positioned deliberately in their product category. Frankly, this is more than just a label… it is indeed a brand.
These retailers have been subtracting the third-party brands they put on their shelves and introducing their own subbrands(private labels) that represent the product and overall theme of the category. Trader Joe’s has been a master of this as the majority of the products they offer are some witty names based on the store’s brand. These names will adjust to different themes or simply state the name. Simple, but also brilliant. Costco has its infamous Kirkland brand that is really more of a white-label approach, a subbrand focused on value for the customer nonetheless. (My podcast episode on Costco)
Current Examples
Target has taken this to the next level and rolled out an array of subbrands that engage with the customer based on their desire. Haven’t noticed? Well, here’s a whole page of them: Target Brands — Magnolia for the interior design shopper, Wondershop for the holidays, Up&Up for value shoppers, Sun Squad for summer, Room Essentials for dorm living, Hyde and Seek Boutique for Halloween, and even Boots & Barkley for our four-legged friends. The list goes….
Walmart has followed suit by rolling out brands of their own as well. These private labels(subbrands) have proven fruitful for these retailers and have obviously been a focus of investment. (Sales of private labels have steadily increased since 2019: Article)
Now, this isn’t a new strategy by any means, but I see it emerging as the defense for retailers as they apply it to their shopping experiences to grow their brand’s reach and relevancy. The advantage I see in this strategy is that the subbrand for the product can relate directly to the specific shopping desire of the customer at that moment. This increases the perceived value of the product and the brands associated.
This enhanced shopping experience leads us to a new era that combines the mall experience of individualistic and themed stores within a giant store with the organization of department stores. This hybrid is focused on lifestyle and desire, not simply product use. It’s about the customer and it’s about the subbrands of the main brand. This is the introduction of the Wepartment Store.
The Wepartment Store:
The focus of the Wepartment Store isn’t to sell specific products but to create a themed experience per shopping category. This is the WHY behind each category that then brings more meaning to the products within.
In the context of a traditional mall experience, this was the concept. As you go from store to store, you are transported through different themed experiences that then bring more meaning and value to the products within. From Hot Topic to Build-A-Bear, and Victoria’s Secret to Sharper Image these pockets of brands each provided unique experiences that reinforce their offerings. This is powerful because the WHY behind the brands’ themes brings both an increase of emotion and logic to the purchasing decision. Collectively they create the experience of that specific mall and its brand.
On the other hand, the department store was structured to sell products based on category and use. A logical shopping experience of men’s, women’s, fragrance, home, etc. — these pockets of offerings were not branded and more for organizational purposes. Very transactional and not emotional. This is a large canvas of lackluster experiences that formed the department stores we are familiar with.
Hybrid Store
The Wepartment Store is a hybrid of these models. The branding and thematic expressions of a mall but consolidated to a smaller more defined size and lifestyle. By this I mean that just as the mall and department stores represented a general, broad stroke of options now Wepartment Stores have more brand that hints at what the shopper will find inside. Just as Target has much more personality as a brand and yet then divides the shopping experience into the subbrands I mentioned previously.
This shift is greatly influenced by the change in the shopping behavior that has been encouraged due to online shopping where endless options are offset by very niche brands and offerings. This expectation does put pressure on classic retailers to not only have a strong brand and theme but also be niche in their offerings so it is a satisfying experience.
Wepartment Store Model
The Wepartment Store seems to be dovetailing in two directions:
1) The subbrand approach I mentioned above that is being deployed by Target, Walmart, Petco, Amazon, and others. These retail brands are creating themed subbrands for specific shopping categories within their store.
2) Other retailers, like Kohls, seem to not be creating their own subbrands, but rather collaborating with other well-known brands like Sephora, Babies R Us, etc. to include within their stores. This is a much more mall-like approach to optimize the square footage of their store. It also leverages brand association and the brands of these other brands.
In both instances, the Wepartment Store model is organizing its offerings based on branded and thematic lifestyle perceptions first then selling products within.
Wepartment is the focus on US, the consumer. It is physical and digital shopping experience that is tailored to our lifestyles from the moment we “enter” the store. Actually, even the store itself is positioned this way! Within the store, curated products are delivered in a seamless experience where we go from one themed “land” of home decor to the next for seasonal wear. The brands that make up each land interact with us in the flavor of their stated theme and reinforce our shopping desire per category need. This increases our perceived value and enjoyment of the experience because we get to play along because it is a performance for us, by us.
From the retailer side, they increase profitability with their private labels which empowers the brand to further curate to the preferences of their guests. The brands are able to reinvest into the experience as a whole and in R&D for new themes and offerings that would impress their guests or are new offerings emerging in the market. This creates an adaptable and profitable model that evolves from customers to guests and eventually to members.
Overall this evolution creates a better shopping experience and a more in-tune brand experience. This benefits both the customers and business in several ways that not only create more value but capture more value as well.
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