Two stores under a roof: shop-in-shop
Shop-in-shop literally means a shop within a shop. Simply put, it means a smaller store that runs within a bigger store. For customers, they provide access to more products and services for more convenience. For retail business owners, they provide opportunity to attract new customers. We will discuss the concept and advantage of shop-in-shop and success stories and provide some specific ideas for beauty supplies.
• Shop-in-shop is different from pop-up stores
Although both popular marketing strategies of recent trend, pop-up stores are temporary stores that run for a limited period to promote certain products and gather feedback on new products whereas shop-in-shop stores can last perpetually as long as the stores can mutually benefit each other independently and dependently through win-win. The history of shop-in-shop is quite long. The examples include a barber shop in a bath house and a pharmacy in a hospital. Across the industries, they are expanding their market share.
• What are the advantages?
– Great for attracting new customers
Beauty supplies typically address a limited pool of customers. Most customers come to find hair products, makeups, and chemicals, and they are mostly African American women. They do not spend much time in the shop, and they drop by a store that is close to their work or home. Most beauty supplies rely heavily on regular customers. Among many advantages of shop-in-shop is attracting a new customer with a type of a shop that can boost the sales of both shops.
– Generate revenue from leasing
If a start-up retail business looks for a retail space, you can lease a portion of your retail space for monthly rents. Retail business owners with extra retail space can exploit the space financially, and start-up business owners can have an opportunity to try running a retail shop at lower cost.
• Finding a good match for shop-in-shop
As mentioned above, a shop-in-shop should not conflict with the existing shop in terms of business. The goods and services should not overlap or conflict but generate synergy. Also important is that they should be harmonious.
Having a salon shop in a beauty supply and a spa or sport drink bar in a fitness center are good examples of harmonious matches. Those who are interested in physical and cosmetic appearance can satisfy their desire further in a single place.
• First, you should understand the customer base
For shop-in-shop to succeed, the collaboration is important. A shop and the shop-in-the-shop should both have better prospect for profit. For this, the sales items should be highly associated with each other. You should find the hidden needs of customers of the existing shop and understand the needs before working on collaboration. From the typical customer in the locality to relatives ages and household composition, all aspect of the customer base must be examined for anticipating demand.
The importance is the coincidence of purchases. Shop-in-shop marketing can succeed when customers wants to purchase items from both shops at the same time, so you should identify the potential and analyze it thoroughly.
• Successful shop-in-shops
– Target and Ulta Beauty
In 2021, Ulta Beauty announced a plan to have around 100 shop-in-shops in Target stores and to expand it gradually. Target is the second biggest big-box store chain that carries various goods from grocery to office supplies, clothes, and electronics. The Ulta shop-in-shop is already making positive impacts on the revenues of both stores. Target used to carry low-priced cosmetics only, and the Ulta Beauty at Target brought premium cosmetic brands like MAC, Anastasia Beverly Hills, BareMinerals, CLINQUE, Jack Black, and Juvia’s Place.
To find these brands, customers used to visit a department store, but they can now shop at a local Target store for more convenience while spending more money at the Target store. Target is training employees to provide expert knowledge to customers visiting Ulta Beauty at Target. After bringing in Ulta Beauty to Target stores, it increased operating profit by 10% in beauty category. The customers can benefit from both reward memberships of Target Circle by Target and Ultamate Reward by Ulta Beauty.
– Sephora at Kohl’s
In 2022, Kohl’s opened about 400 Sephora shop-in-shops within its stores, and by 2023, it will be having 850 Sephora at Kohl’s locations. It is an effort to bring younger customers who shop at Sephora to its stores.
Each store offers a separate entrance to Sephora, and from makeup to skincare, haircare, and fragrances, 125 consumer favorite brands will be introduced. They will offer personal beauty consultation and expand its signature experience. Sephora at Kohl’s expanded their shop-in-shop to online stores, so you can shop Sephora-exclusive cosmetics at www.kohls.com.
• Shop-in-shop ideas for beauty supplies
About ten years ago, Mr. Kim who had a Metro PCS store rented a small space within a beauty supply ran by his acquaintance to open the cell phone shop-in-shop. An opening promotion attracted a lot of customers, who also shop at the beauty supply and made purchases. The customers who were impressed with the great customer service there returned to the beauty supply even long after the Metro PCS shop-in-shop was gone. It is an example where you attract new customers and made them regulars. What kind of shop-in-shop ideas would work for your beauty supply stores?
1. Hair salon
A beautician-owned hair salon business at a beauty supply is a great example of a shop-in-shop. The hair salon can lead the customers to purchasing goods at the beauty supply while offering salon services, so you can increase the customer satisfaction while boosting sales. You can spare a space within the store and chargerental fees per chair. You can add conditions to the lease agreement such as requiring all hair products to be purchased at the beauty supply and daily payment of rent.
2. Playground for kids
Most beauty supply customers are women, and they might bring their children to your store. If you allow them to shop freely while making the children happy, they will more likely to come back. From arcade claw machines to kids’ favorite character goods and K-pop idol goodies for youths, you can offer or sell them.
3. Hair loss clinic
A while ago, an Arkansas local news reported a story. A beauty supply opened a hair loss clinic within its store to help people with alopecia and hair loss due to chemotherapy through consultation and solutions, and local people responded with praises for the business.
You can not only receive the consultation but also purchase necessary goods, so customers prefer to visit this place if they are interested in hair loss products and wigs. In addition, the beauty supply made a good impression as a contributor to the local community while enjoying the increase revenue from the relevant product sales.
Beauty supplies who can run a hair loss clinic can recommend and sell hair loss prevention products as well as wigs.
4. Pet shops
As much as African American women like taking care of themselves, they like pet accessories and clothing. For example, on social media, matching military looks for a pet owner and their pet went viral for a while. You can still find matching pet outfit on Amazon.com today.
Among pet goods, snacks and foods are not easy to carry due to food safety and hygiene issues, but pet clothes, leashes, bowls, and other accessories are not so hard.
5. Eyebrow bars
Benefit BrowBar is one of the most loved places today. They not only recommend eyebrow shapes for your facial type but also offer brow waxing. When people think about eyebrow products, Benefit is one of the first to come to mind.
You can let beauticians and makeup artists to use a portion of your space, and they can recommend eyebrows and eyelashes you carry to their clients for your benefit. You should help makeup artists promote themselves for the ultimate win-win.
6. Amazon Hub Locker
Package delivery services in the U.S. are not so great. They do not provide head-up messages or give an estimated time of arrival unless requested. If you live in a house, you are in luck. But many apartments residents experience package theft. To reduce delivery accidents, more and more people choose to pick up their packages at Amazon Hub Locker at a local retail store.
You probably have seen one of them at a Whole Foods Market location. Whole Foods Market locations also offer Amazon return service to attract even more customers. Customers use their mobile app to access and securely open the Locker via Bluetooth. Instead of home delivery, your order from Amazon.com can be shipped to nearby Locker based on your Zip code.
If you search Amazon Hub Lockers in Duluth, Georgia, you will find a fitness center, grocery stores, and furniture stores, among others. If a beauty supply has one of them, it might be generating revenue all the while more customers might drop by for their packages. You can apply for the Locker on Amazon website or call 1-877-346-6244.
While there are many options for shop-in-shops, you should first understand the customer base and consider the local characteristics. You may simply ask a customer of yours. If your beauty supply brings more to the table, your customers will rely more on your business.