When two or more successful brands team up in one retail space, it can be a great way to boost all businesses involved. An increasing number of major brands have been taking the plunge and joining forces with companies they think their customers would like to do business with to woo them back into their physical locations.
Target (NYSE: TGT) has been a leader in this trend, teaming up with Starbucks way back in 1999 and bringing Apple inside its stores about two years ago, followed by Disney stores this past February and Ulta just last month.
This store-within-a-store concept has been gaining popularity for some time now, from Sephora shops in J.C. Penney (and more recently, Kohl's) to Samsung shops in Best Buy. And while Macy's will carry Toys "R" Us items only on its website this holiday season, it plans to feature the comeback toy retailer's shops in 400 of its stores next year.
Why so many retail partnerships? Certainly, customer convenience is one part of the equation. Who doesn't love checking multiple items off their shopping list in one spot? But the experiential factor shouldn't be underestimated.
Be our guest
At this point in the pandemic, consumers have been buying online whenever possible for so long that memories of leisurely shopping trips to nonessential physical retailers can feel almost nostalgic -- and even more so as the holidays approach. Those consumers might be ready to be enticed back inside. That's where brand partnerships can help.
Offerings like in-store cafes, Disney stores, and popular gadget retailers all have the potential to make customers imagine what it would be like to explore the offerings in person with friends or family and grab a bite to eat or a coffee rather than clicking "add to cart" and calling it a day.
And it's clearly working. Target has been a top performer throughout the pandemic. Of course, its status as an essential retailer has no doubt played a significant role in its success. But now Target plans to nearly triple its number of in-store Disney stores, bringing the total to more than 160, before year-end. Rolling out the Disney store experience to so many more stores so quickly suggests that Target has gained considerable value from offering it.
The Millionacres bottom line
Target's ramp-up of their Disney partnership is well-timed, with the fast-approaching holiday season presenting the perfect opportunity for retailers to test out new in-store offerings. As people enjoy cooler weather and make plans to slow down and spend more time with friends and family, many may be more inclined to want to venture out and make an experience of shopping around the holidays like they used to. And if a retailer they once frequented has something new going on they like, they're more likely to keep coming back well into the new year.