Cashmere for toddlers, handmade lotions and soaps from an agricultural cooperative in northern Israel and tuxedos for Gen-Y males are just a few of the new products retailers are designing new concepts around.
The retail industry has become so saturated with me-too concepts that new retailers, in order to succeed, need to have a laser focus on their market segment and open stores different from those already in the market.
"We are seeing people take one thing and try to become really good at it," says Mike Tesler, partner and principal of Retail Concepts. The Norwell, Mass.-based firm consults with new business owners to help them establish their chains. "If you get known for being the best at that one thing, you've won the game in retail."
For example, Sabon, an Israeli-based chain that sells bath and beauty products, has a more narrowly defined market than mainstream competitors Bath & Body Works and the Body Shop. Sabon's array of handmade soaps, shower gels and body lotions are produced in northern Israel at an agricultural cooperative. The products, which range in price from $6 to $35, are made from a myriad of flowers, vegetables and leaves including amber, rose petals and eucalyptus.
Sabon's success speaks to another trend among new concepts--that of new retailers coming from overseas into the U.S. market, says Joanne Podell, senior director in the retail services group for Cushman & Wakefield. Podell herself is consulting for two mid-market concepts coming over from Korea and Singapore.
"They are really taking their time and learning how the customers will see them," she says.
Retailers often test new retail concepts in stores to help fledgling operations gain traction before rolling them out as stand-alones.
Last year, J. Crew Group spun off a children oriented division of its adult apparel namesake J. Crew, named crewcuts. Twelve in-store boutiques and two stand-alones sell apparel for children ages 2 to 10 modeled off its adult lines. Its racks are filled with cashmere sweaters for $118 and $40 pastel button-down shirts.
As women have children at a later age, when they are more financially secure, Robert Cohen, executive vice president of Robert K. Futterman & Associates LLC, says, "people are willing to pay more for themselves and their kids and it's not a very crowded field."
J. Crew is tapping into the booming baby market, according to Jeff Green, of Mill Valley, Calif.-based consulting firm Jeff Green Partners. And other concepts are targeting that same market, which includes everything from maternity wear and upscale furniture to accessories and apparel. In fact, in 2006, children's apparel sales in the United States brought in $30 billion, an 8 percent increase over $27 billion in 2005, according to the NPD Group.
Rather than position crewcuts as just another children's clothing store, or even an upscale children's apparel store, J. Crew is marketing it as a "sophisticated" children's clothes retailer.
Its Dallas stand-alone store resembles a New England seaside cottage, replete with wainscoting, sky blue and bright green color schemes, which is also carried over to the store's upholstered benches.
"Crewcuts is doing fantastic because it's very targeted," says Tesler. "They don't pretend to be everything to everybody."
So what's on tap next?
Experts and brokers point to an assortment of new concepts that either only operate a handful of stores or are getting ready to open their first. Here Retail Traffic has collected more than 30 examples of new chains still in the development stage that developers should watch. They run the gamut from grocery concepts and apparel chains to bath and beauty products and accessories. Some are international while many are spinoffs of successful existing brands. Among these names is Bratt Decor. Enjoy.
Category: Children's furniture and accessories
Parent: Bratt Decor, Inc.
Current stores: Two. The first one opened three years ago at Belvedere Square in Baltimore, Md.
Planned openings: 20 within the next five to seven years, including locations in Los Angeles, Chicago, Dallas and Boston.
Average store size: 3,000 to 5,000 square feet
Target audience: Affluent new parents in the 25- to 40-year-old age bracket with extravagant taste.
Buzz: A hit with celebrities, including Marcia Cross and Sean Combs, Bratt Decor offers handmade furniture for the little people. The chain is looking for locations in lifestyle centers, next to high-end apparel stores and restaurants.
Written by: Elaine Misonzhnik