The shop-in-shop vogue is in full swing
Already noticeable before Covid-19, the installation of partnerships (corners of a few square metres or shop-in-shop) by department stores (Le Printemps with Darty) or supermarkets (recently Asda, Tesco, Auchan) is increasing. For the generalist retailers, it is a question of delegating the management of part of a space to specialists in order to attract customers to stores and, above all, to make the floor area more profitable. Incidentally, this method of management by concessions allows retailers to develop a new niche for second-hand goods, already promoted by Cora with Easy Cash or Auchan with Patatam. The retailer, whether pure-player or brick-and-mortar, can dictate the product range, merchandising, employees and pricing at the floor area given to such partners. The latest announcements from Asda, Auchan and Printemps reveal this trend. Asda, No. 3 among British supermarkets, converted to this strategy in 2019 by signing agreements with jewellery and accessories specialist Claire’s, then Greggs (bakery), B&Q (D.I.Y.) and musicMagpie (music).
Asda (turnover €25.4 billion in 2018) confirmed a “test and learn” strategy for selling toys via The Entertainer, the British No. 1 for toys, already operating in 170 U.K. stores and 470 stores worldwide. In February 2021, the toy specialist plans to open 5 brand concessions in Asda supermarkets, controlling supply, merchandising and prices. MusicMagpie will expand the current 5 stores selling second-hand DVDs to 31 new locations. Asda was recently sold by Walmart to British billionaires who made a fortune from petrol stations plus the venture capital company TDR Capital.
In France, Géant Casino initiated this approach with the pure-player Cdiscount, (the same group headed by Jean-Charles Naouri) and selling in 57 hypermarkets. Since June, the brand has linked to other non-food specialists (C&A, Claire’s, Hema and Moovway). According to Linéaires, results are satisfactory. Sales are up by 48% on September 14th for the 7 corners run by C&A. Auchan Retail France (turnover of €45.8 billion in 2019) is partnering in particular with brands from the Mulliez galaxy (Boulanger, Cultura) and Patatam (Editor’s note: the online second-hand store reports a turnover of €2 million). In a press release on October 14th, Auchan Retail France confirmed pilots since April with Decathlon (turnover of €12.4 billion in 2019) and announced the opening of a 360 sq.m. shop-in-shop in the hypermarket at Saint-Jean de la Ruelle (Loiret). Managed by a staff of 7, this space offers 1,000 products via a stand-alone terminal or via a ‘scan&pay’ application. Part of the Decathlon Orléans Sud store, customers order sports items via web order terminals and use a click & collect service. For specialists such as Decathlon, these partnerships offer opportunities for extra value from traffic generated by hypermarkets, to diversify operations and win new customers. This is a pivotal point for large hypermarkets. Auchan Retail has announced a move to “in-platform mode”, with “hypermarkets open to their ecosystem”.
There are further examples of good practices between department store Printemps and Fnac-Darty. The household appliances, electronics and cultural products group has been experimenting with 2 shop-in-shops at Le Printemps since the beginning of October. The first sells a selection of Darty small electrical goods over 180 sq.m. at Printemps Maison. The second is an ephemeral “Fnac Kids” store offering toys and games for the next 3 months over 400 sq.m. within Le Printemps de l’Homme store.