Advertising Age has a story noting that as bricks-and-mortar retailers feel the pain of a contracting marketplace in which e-commerce is growing at the expense of physical stores, among the victims are "the iconic flagship stores" that were built in high-profile locations, that paid high rents, but served "as status symbols for retailers, more important for their brand-wide promotional value than the profits they may or may not have generated on the premises."
"Contraction in retail is leading big chains to reconsider their biggest brand temples," Ad Age writes. " The latest casualty is JC Penney's New York City flagship and sole Manhattan outpost, put up for rent last month less than a decade into a 20-year lease. JC Penney's decision to close the 150,000-square-foot store, centrally located in one of the top tourist destinations in the world, signifies a dire situation at the Plano, Texas-based retailer ... Earlier this spring, Ralph Lauren closed its lavish Fifth Avenue Polo store, for which it brokered a $400 million, 16-year lease in 2013. Toys R Us and Aéropostale shuttered their Times Square stores last year, and FAO Schwarz in 2015 turned in the keys to its Fifth Avenue flagship, whose giant piano won't be enticing Tom Hanks wannabes anymore. And while its miraculous location on 34th Street remains open, even Macy's is rethinking its real estate.
"Struggling retailers can no longer justify the expense, even as a marketing cost, as e-commerce and social media grow in importance with shoppers. In the digital age, ads made from bricks and mortar no longer work as well, or even send the right message."
Ad Age writes that "instead of flagship as marketing, brands may do well to market their flagships as brand experiences." If stores continue to exist, they likely are going to have to be more experiential, and they're almost certainly going to be smaller.
"Contraction in retail is leading big chains to reconsider their biggest brand temples," Ad Age writes. " The latest casualty is JC Penney's New York City flagship and sole Manhattan outpost, put up for rent last month less than a decade into a 20-year lease. JC Penney's decision to close the 150,000-square-foot store, centrally located in one of the top tourist destinations in the world, signifies a dire situation at the Plano, Texas-based retailer ... Earlier this spring, Ralph Lauren closed its lavish Fifth Avenue Polo store, for which it brokered a $400 million, 16-year lease in 2013. Toys R Us and Aéropostale shuttered their Times Square stores last year, and FAO Schwarz in 2015 turned in the keys to its Fifth Avenue flagship, whose giant piano won't be enticing Tom Hanks wannabes anymore. And while its miraculous location on 34th Street remains open, even Macy's is rethinking its real estate.
"Struggling retailers can no longer justify the expense, even as a marketing cost, as e-commerce and social media grow in importance with shoppers. In the digital age, ads made from bricks and mortar no longer work as well, or even send the right message."
Ad Age writes that "instead of flagship as marketing, brands may do well to market their flagships as brand experiences." If stores continue to exist, they likely are going to have to be more experiential, and they're almost certainly going to be smaller.
- KC's View:
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Unless these flagship locations are truly remarkable, they're mostly going to be a waste of time, money and effort ... with very little relevance to brands' actual users. It may be a change, but it hardly strikes me as a loss for western civilization.
