Can Showroom Brands Save Brick-and-Mortar Shopping?

If you want to buy some clothes at the posh MM.LaFleur in New York, you’ll be in for a few surprises. It starts with the location—611 Broadway is a trendy SoHo address, but there’s no visible clothing store there. Instead, a cavernous Crate and Barrel dominates at street level. To get to the store, you’ll have to take the elevator to Suite 401. Once you’re up there, another surprise awaits. There is, in fact, a clothing store, but one with no visible clothing. The reception area’s white walls, bare plank floors and potted palm could well belong to a design firm or a pricey plastic surgeon’s office. And instead of a sales associate greeting you with retail’s usual plastic smile, the associates here already know your name, and they’ll hand you a flute of champagne and whisk away your cell phone for charging. So, is MM.LaFleur a clothing store at all? Well, sure. But “store” doesn’t wholly convey what’s going on here. MM.LaFleur, which has grown to five locations nationally, is a showroom brand. People who visit consult one on one with stylists who bring out sample garments for them to try on. Once the selections are made, the shopper goes home empty handed. Instead, a few days later, her selections arrive by mail. [kickout id="1"] “This is a tranquil space, and it’s the most efficient 60 minutes of your life,” says company founder Sarah LaFleur. “My customer is a professional woman. She’s busy—midcareer and approaching executive level—and tends to be a mom with kids. She doesn’t have time to run into a department store.” MM.LaFleur isn’t just an alternative to the traditional, often hectic realm of clothes shopping—it’s one of several showroom brands in its ascendancy. Having started about a decade ago with the rise of Warby Parker, showrooms (sometimes called “guide shops” or “fit shops”) have been quietly proliferating across the country. They include shoe stores like M.Gemi and Paul Evans, which fit customers for high-end footwear that’s handmade in Italy and shipped directly to customers’ homes in the U.S. They include interior-décor companies like Restoration Hardware, whose opulent “galleries” across America let shoppers touch and feel and lounge in its luxurious furnishings, then go home and wait for their selections to be sent there. And they include apparel brands like MM.LaFleur, Bonobos and J. Hilburn—stores that, according to retail industry watchers, offer a viable alternative to the brick-and-mortar model that’s been taking gut punches from Amazon and other eretailers. “We are definitely believers in the validity of this model,” says Melissa Gonzalez, founder of retail strategy firm the Lionesque Group. “The purpose of physical [stores] continues to evolve and, at the core of it, brands need to utilize physical [locations] to deliver something they cannot online." Showroom 101 Reduced to its essentials, a showroom gives customers all of the touchy-feely advantages traditional stores always did. But because there’s little or no on-site stock—the shopper has to wait for his or her purchases to be prepared and shipped off—showroom brands have many operational and competitive advantages over yesterday’s brick-and-mortar outposts. For example, showrooms save significantly on rent because they operate on smaller footprints. Ask Micky Onvural, CMO of Bonobos, an upmarket men’s retailer with 47 “guide shops” around the country. “In terms of what we can build with this no-inventory model, we can take much smaller real-estate spaces because we don’t have to have every single product on the rack,” she says. A Bonobos guide walks customers through the goods, helps with size and selection and then zaps the order to a central warehouse. With order fulfillment moving away from the store, “you [also] don’t need all the back office and storage,” Onvural says. “So it’s a much, much smaller square-foot space.” [kickout id="2"] MM.LaFleur’s Broadway location has six dressing rooms and plenty of space for all the necessary try-on outfits, yet the store is just shy of 1,000 square feet. Compare that to the 10,000-square-foot Armani Exchange nearby. (Or, then again, don’t—that location closed its doors in January.) And it’s not just a matter of size, but also of locale. Since many of MM.LaFleur’s customers make an appointment to come in, the store doesn’t need traditional curb appeal. “We don’t have ground-floor retail,” LaFleur says of her locations, and “being on Fifth Avenue is not important at all.” It's a similar story at J. Hilburn, a Dallas-based upscale men's showroom brand founded in 2007. While Hilburn stylists will come to a customer's home or office to fit them for a new outfit, founder and CEO Veeral Rathod says the personalized attention on which his concept is built is enough of a differentiator that customers will seek out his three retail locations. "Our customers are coming to us because they want [their clothing] to fit well and have a personal stylist," he says, "not because they walked by the window." [kickout id="7"] J. Hilburn's flagship store in Dallas does happen to have a handsome facade at street level—the 1,400 square-foot store did $1.6 million in its first 12 months—but the freedom to situate a store in a low-visibility location has been a huge help to Rathod in New York, where rents are often prohibitively high for a startup like his. In Manhattan, Rathod inked a deal with WeWork, the cooperative office space, to set up a store on East 49th Street. Compared to a full-sized "studio" location, this one is much cheaper, smaller and requires a smaller staff to operate. Retail locations like these, stripped of retail's usual appurtenances like checkout counters, elaborate floor displays and cavernous stockrooms, also free employees from the chores of restocking, tidying shelves and running back and forth to check for the right size or color of something. As a result, staffers can devote more attention to actual customers, another factor that gives showrooms a competitive edge. According to research from consulting firm PWC, that face time results in higher sales, a decreased likelihood of returns and even increased ecommerce business, since existing customers have already been shown the offerings and know what size they take. Meanwhile, showroom chains also enjoy significant cost savings stemming from more efficient logistics. Traditional retailers are always busy shifting their inventory from warehouse to store—and from one store to another store—a costly and often inefficient way of managing stock. But a central warehouse that ships only items that have already been selected allows Bonobos, for instance, to streamline operations considerably. “Because we have a single inventory we’re pulling from, we’re not shipping inventory around,” Onvural explains. “We’re not having to plan for having all sizes and all colors, so we’re able to be much smarter about our inventory, which is more financially beneficial than a large brick-and-mortar retailer, which carries a large inventory [in each store].” Similarly, at MM.LaFleur, the central warehouse allows management to respond quickly to the vagaries of regional preferences. “Call it global warming, but temperatures these days are so unpredictable, a coat we can’t move in New York is popular in San Francisco,” LaFleur relates. But “keeping [the inventory] in one pool lets us react promptly to that.” [kickout id="4"] A new trend from an old idea Showrooms might be current in the social-media age, but they’re not a new idea in retail. “This is a reinvention of a very old form,” observes retail expert Paco Underhill, founder of consultancy Envirosell and the author of Why We Buy and other bestselling books on the psychology of shopping. In decades past, companies like H.J. Wilson, Witmark and the once-massive Service Merchandise operated “catalog showrooms” that would display sample items that visitors could try out and, if they liked something, they could order it on their own. (In the case of Service Merchandise, shoppers handed in an order slip and waited for the stockroom boys to send their purchases out on a conveyor belt.) [kickout id="9"] “The catalog showroom was part of our landscape well into the 1970s,” Underhill says. Today, he adds, “that model is being applied in a wide variety of ways.” Most obviously, it’s being applied to relatively high-end retail apparel. Whereas the general-merchandise showrooms of decades past tended to be no-frills houses—outlets where shoppers enjoyed lower prices as a benefit of forgoing the attention of a salesperson—most of today’s showroom brands lavish individual attention on shoppers and charge them accordingly. MM.LaFleur’s black “Melanie” dress lists for $365, for example. A pair of men’s oxfords at Paul Evans will set you back $399, and Bonobos prices its unconstructed wool blazers at $400. It’s no coincidence that today’s showroom chains are proliferating at the high end of the market. If you’re going to ask clothing shoppers to forego shopping’s immediate gratification, to go home and wait a few days for their purchases to arrive, those purchases had better be something special. It follows, then, that many showrooms today resemble ateliers more than run-of-the-mill chain stores. [kickout id="3"] Case in point: Acustom Apparel, a store in New York’s SoHo neighborhood. Like other showroom brands, Acustom lets its patrons try on sample garments and then order what they like for later delivery. “We believe retail is trying to adapt to the changing winds,” says CEO Dan Norcross, “and direct-to-consumer is part of it.” Significantly, however, Acustom isn’t just a showroom brand, it’s a bespoke one. After getting a full-body digital scan to determine his exact sizing, a shopper works with a personal stylist to customize his selections, choosing what lapel style he likes, the type of lining and even the color of the stitching. Once the order is submitted, a contracted facility makes the garments to order, then ships them to the customer’s home. J. Hilburn, too, works off the bespoke model. Once a customer selects the styles and colors he wants from the sample garments on the store racks, a store associate places the order with an offshore manufacturer, which stitches everything according to that client's measurements. J. Hilburn sells a men's dress shirt for about $125, roughly what a man would pay at the upper end of, say, Brooks Brothers. Rathod relates that people sometimes ask him why they should pay that price if they also have to wait for the shirt. Why not just go to Brooks Brothers? "[Because] the fabric quality will be different, and [their] shirt won't be made to fit you," he tells them. "We're buying [fabric] from the best mills in Italy, everything is customer fit, personalized and we offer some of the best delivery times." [kickout id="8"] Even so, asking customers to wait can be a tricky proposition in retail, where part of the reward has always been the thrill of hunting for that perfect shirt (or whatever) then trotting it home in a shopping bag. Asking shoppers to give up that rush is akin to asking them to turn their backs on what makes shopping fun. But showroom executives counter that this kind of retail thrill-seeking is more the fixation of younger shoppers flocking to fast-fashion retailers. By contrast, clients of showroom apparel stores tend to be older, more affluent customers in search of professional clothing—clothing, it follows, that they don't mind waiting for. The career-wear sold at MM.LaFleur, says the company's founder, "is not really something we feel is an impulse purchase." Bonobos Onvural adds that her clients (read: American males) aren't exactly known for their love of apparel shopping to start with. "There is a segment of consumers who want the entertainment and the rush," she says. "But for the most part, with men, the process of going into a store is much more functional." As Underhill sees it, savvy customers are more than willing to trade the ephemeral excitement of going home with some off-the-rack find for a high-quality outfit that, since it's been curated for them, will take a couple of days to get there. “If you’re … one of the merchants able to customize something to someone’s taste,” he says, “part of what it adds up to is people’s perception of value.” A higher standard of operations But offering this kind of highly individualized in-store experience is, to put it mildly, not easy. “It’s not just [a matter of] selling the object,” Norcross explains. “There’s a lot of relationship-building on the presale side and a lot of support on the postsale side. That customer relationship is a lot closer and a lot more complicated than [it is with] traditional retail.” Onvural relates that while Bonobos’ smaller footprint might mean fewer employees in a store, that doesn’t make running a store easier or, from a labor standpoint, less expensive. “When you walk into a guide shop, we offer one-on-one service,” she says. “What we save on the operational running of these stores we invest in the experience to the customer.” “But that,” she adds, “has another financial benefit. We see a much higher basket, and we also see a much higher outlay. And they may come back [to shop with us again] online.” Indeed, once a customer has a positive experience in one of these places, the experience itself becomes nearly as important as the clothing that gets bought. This is a lesson LaFleur learned pretty much by accident. When she started her company four years ago, she had actually never planned on opening a showroom at all. An ecommerce site, she figured, would do it. [kickout id="5"] “But we had a terrible time scaling the business,” she recalls. “We thought the orders would roll in.” Instead, she says, “we heard crickets.” Only after LaFleur began opening pop-up shops around New York did she realize that shoppers—professional women, in this case—really liked the one-on-one attention that only a physical store can offer. And when LaFleur began to offer the highly personalized, highly trained and highly discreet attention her brand is now known for, she says, “we saw growth overnight." The upshot: “It’s really not just about the clothing,” she says. “It’s about giving women the stylist, the advice and filtering through all of the options.” Because showrooms lavish such attention on shoppers who can afford the commensurate prices, it follows that this trend is not (at least for now) likely to revolutionize the lower tiers of the retail apparel business. It’s hard to imagine a teenager trying on a cheap pair of $9.99 jeans at H&M and not being able to buy them in the store—much less heading home to wait a week for their delivery. “A lot of people will [still] be satisfied by going to a fast-fashion retailer,” Norcross predicts, adding that it’s brick and mortar’s midsection—the J.Crews and Ralph Laurens of the world—that’s struggling most. Yet while the rise of showroom brands may be an outgrowth of brick and mortar’s woes, they are also, strangely enough, proof of their validity. True, 2016 and 2017 were fearsome years for traditional retail, with Macy’s shuttering over 100 stores and Ralph Lauren closing down its Fifth Avenue flagship. But the appeal of heading out to the store to buy clothes is not dead. “There’s a lot of hyperbole about retail dying, but [it’s just that] the model’s changing,” Bonobos’ Onvural says. “There is still a place for a physical experience. You just have to think differently about how you do it. That’s what we have done. We have always been pretty good at being contrarian.”

Digital Transformation

Can Showroom Brands Save Brick-and-Mortar Shopping?

MM.LaFleur, Bonobos, Acustom Apparel and others disrupt retail

Robert Klara

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