Are Tiny Stores the Next Big Idea in Retail?

Like many fashion brands eager to tap new markets and tell their story, Norwegian Rain opened flagships in Paris and Tokyo, in addition to its hometown of Bergen and Oslo, the capital city.

But its latest retail venture is its first Norwegian Rain Compact Store, a 20-square-meter (215-square-foot) unit that opened earlier this November at 14 Bredgade in Copenhagen. Founders Alexander Helle and Michael T. Nartey, who goes by T-Michael, hope it’s the first of many, believing that these showroom-style boutiques — a place to discover a brand and try on key styles, rather than wade through a sea of merchandise — are the way of the future.

They call it “retail on demand,” helping to reduce fashion’s overproduction problem — and melding the physical and digital worlds in one cozy, cost-effective space.

“The idea was to bring together breaking brick-and-mortar, and the digital world, in the same kind of concept,” T-Michael explained over Zoom. “The most important thing was getting people to understand the brand, try the clothes on, and get the fit right in the shortest possible time.”

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Besides fit, the compact stores remove another pain point from online shopping: understanding the quality and make, Helle said, noting that each waterproof and windproof coat is composed of three breathable layers of recycled material — an outer shell, inner membrane and lining.

Raincoats can be bought on the spot, and be delivered within two or three days, or purchased later on the site that the QR code summons on a smartphone. Customizations are possible with a six-week turnaround.

The partners consider the Copenhagen unit a test, but their aim is to roll out compact stores to more cities, lauding the lower rental costs and other efficiencies. In Copenhagen, the tiny storefront joins a district full of galleries and antique shops.

Given that compact stores require lower capital expenditure, and offer slightly higher margins, Helle said he could envision from five to 20 more, with the next one likely to sprout in London, where the company once operated a full-size pop-up in Piccadilly.

Several other brands that market more technical clothing recently unveiled plans to open smaller-format stores.

Canadian outdoor label Arc’teryx disclosed plans to open smaller, Icon stores in the U.S. this fall. The first opened in Walnut Creek, Calif., and three others are to debut in New York City, as well as two in San Francisco before the end of the year.

Nike, meanwhile, said it will open between 150 and 200 new “small footprint, digitally enabled monobrand stores in North America and EMEA [Europe, the Middle East and Africa].”

On the designer end, Comme des Garçons has been a pioneer with its freestanding Pocket stores, the first of which opened in Paris in 2008, mainly stocking the Japanese firm’s Play, Wallets and Parfum collections.

Adrian Joffe, president of Comme des Garçons International, has likened the concept to a convenience store. There are 25 in the world, including six in Japan, all roughly 20 square meters in size.

A Comme des Garçons “Pocket” store in Amsterdam. DIM BALSEM

The nascent trend to smaller stores seems to coexist with the other extreme of ever-larger formats: Fast-fashion chains Zara and H&M, for example, have each closed several locations in Paris while planting new megastores, according to Antoine Salmon, a partner and head of retail at Knight Frank France.

Marking its 10th year in business, Norwegian Rain distributes its coats to about 110 wholesale doors in 18 cities, with business concentrated in Japan, Korea and Western Europe.

While 20 percent of its business is done online, Helle and T-Michael are also staunch believers in physical retail, including flagships.

Finding diminutive real estate is a challenge, they acknowledged, with the advent of globalization and chain stores carving out bigger and bigger spaces, and gobbling up smaller spaces suited to niche retailers.

“Like everything else, now we’re probably entering a phase where we have a reaction to that and where people will think differently and start carving up those big spaces again,” Helle said. “Everything goes in cycles and we’re also very lucky that we can do this customization concept with our factory where they go away from mass production and make a line of more niche production. We are in a crisis and in crisis people are more likely to fail but also they are more in a position to be motivated and to think differently.”

Norwegian Rain looks Courtesy of Norwegian Rain

Helle touted the brand’s customization service as a rarity for technical wear, which is costly to produce and usually done in a standardized manner. The company’s factory in Poland, facing a new reality amid the coronavirus crisis, agreed to take on these orders.

Helle, who holds the title of creative director, and T-Michael, head designer and strategic director, hinted at further brand extensions, but plan to stick to their core concept of rainwear that doesn’t compromise on function or style.

Bergen is billed as the rainiest city in Europe by far, logging on average 239 rainy days a year.

“Living here kind of pushes us much further than any other brand in the world,” Helle said about Bergen, a picturesque, coastal city of about 250,000 where most people walk to get around. “And we’re not gonna compromise on style either. So that’s why we think we kind of created a new category within rainwear.”

Indeed, though it never rains in California — at least according to the 1972 Albert Hammond hit — that U.S. state ranked as Norwegian Rain’s number-one shipping destination for its e-store in 2018.

More to read:

Weatherizing Retail in Competitive Times

Arc’teryx Rolling Out Smaller-format Icon Stores

Nike to Debut ‘Rise’ Retail Concept in China

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