A Store With No Inventory? Leading Retailers Are Beginning To Offer Showroom-Style Stores

As retailers focus on ways to improve the in-store experience, one approach some are considering is stripping the store down to its most basic purpose: a place to explore merchandise—a true showroom. Despite the proliferation of purchase channels available to shoppers, brick and mortar still provides a significant and unique opportunity for retailers to showcase products in real life. Retail stores also offer the ability to provide a physical destination for shopper education and inspiration. The clean layouts provided by showroom stores allow retailers (and shoppers) to focus entirely on the product experience, without having to worry about inventory management and stocking challenges.

By setting up showrooms, retailers provide their customers with the chance to see and touch products before making a buying decision—something that is still important to a large majority of consumers. Many are researching products online first, but will visit stores to see the product before making a purchase. With less inventory on display to sort through, showrooms allow shoppers to focus completely on interacting with merchandise without the need to sift through an overwhelming number of colors or sizes.

Reduced inventory also means less time that store associates need to spend stocking shelves or searching for products, which allows them to spend more time assisting customers. Whether it’s giving style advice or answering product questions, having more face-time between store associates and customers creates a more personalized experience that sets retailers apart in such a competitive space. If a customer is interested in a product, associates are there to help them determine style and fit, then to order the product to be delivered to the customer’s front door, eliminating another customer pain point of long checkout lines.

In the past, some retailers have been skeptical of the showroom format, fearing that the accompanying reduction of in-store inventory would lead to a decline in sales. Quite the opposite has happened, however, as those that have implemented the new store format have realized significantly higher profitability per square foot than their traditional retail counterparts. Men’s retailer and showroom leader Bonobos generates an average of $3,000 per square foot while a traditional retailer like The Gap averages only $450.

With the success that brands like Bonobos and big box stores like Target and Kohl’s have had in rolling out small-format, showroom-style stores, more retailers are considering the approach. Nordstrom is the latest retailer to jump on the bandwagon. The company recently announced that it will begin opening new small-format stores called “Nordstrom Local.” Unlike their department store counterparts, Nordstrom Local showrooms won’t have any merchandise on-hand for customers to take home with them. The stores will, however, be outfitted with fitting rooms and a staff full of personal stylists to help customers find the perfect look. The stores will also serve as an in-store pickup destination for Nordstrom customers who order online. Nordstrom plans to use the space saved from the elimination of inventory for other, experience-enhancing services. Along with the personal styling services, shoppers can expect to find on-site tailoring, manicure stations, and even a bar to enjoy drinks during their visit.

Whether it’s checking out a big ticket item or trying on a pair of jeans, there are some aspects of shopping that simply can’t be replicated online. Showrooms not only give retailers the chance to show off their product to prospective customers in a carefully curated way, but they also allow them to wow shoppers with services and experiences that can only be delivered in the physical world. Brick and mortar stores aren’t going away any time soon, but the experience of shopping in them is undergoing some profound changes that will reshape their role in the consumer purchase journey.

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