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Are hotels the next frontier for retail?

Image: A West Elm hotel.

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As retailers continue to search for ways to connect with their customers, they are increasingly thinking out of the box and into…hotels.

Although high-end fashion houses like Versace, Armani and Fendi were the first to get into the hotel game, mid-level retailers are now seeing the potential of hotels to create amazing brand engagement.

American home furnishings brand West Elm last year announced its expansion into hospitality with a range of hotels across the US, and Japanese retailer Muji will open its first ‘Muji Hotel’ this year.

Located in Shenzhen, China the hotel will feature Muji’s minimalist furniture and products, right down to branded soap and shampoo. The company is also planning a hotel in Tokyo’s Ginza district, to open in 2019.

retailers opening hotels

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A model of Muji Hotel.

While West Elm will keep its retail shopping experience separate from its hotels, Muji is building hotels on top of its stores.

These companies see massive potential for their hospitality expansions. In fact, West Elm’s vice president of hospitality and workspace, Peter Fowler told Forbes that opening hotels is “how we move from a $1 billion brand to a $2 billion brand”.

If you think about it, hotels are the perfect extension of a retail brand. They are a living, breathing showcase of a retailer’s products and give brand devotees the opportunity to live the lifestyle the company represents.

Putting your products in hotels cuts out the middleman and markets them directly to hotel guests. Is there any greater marketing tool than having people actually live with (and hopefully enjoy) your product?

Although moving into hotels is a relatively high-risk and undoubtedly expensive undertaking, the payoff could be immense. The traditional path of opening bricks-and-mortar stores is not the only way to increase brand reach, engagement and growth.

Indeed, with retail brand hotels you have a captive audience of customers who are actually paying to stay with your products.

It’s not only homewares and furniture retailers who are seeing this potential. Equinox Holdings, the New York company that runs Equinox fitness clubs, has also launched a hospitality arm.

retailers opening hotels

An Equinox fitness club.

The company plans to open its first location in New York in 2019, billing it as ‘where the science of fitness meets the art of travel’.

This perfectly sums up the appeal of hotels for retailers. Through hospitality, you’re selling more than your products—you’re offering aspirational customers the chance to experience the lifestyle you’re selling in store, online and through social media. They just need to book a stay (and buy the branded bed linen).

In other news…

SumoSald update: This week I spoke to Luke Baylis, CEO of SumoSalad about the Westfield rent saga. Expect a “very positive statement” regarding this in the coming weeks. Luke also outlined how he is future-proofing the company by expanding into non-traditional locations.

Munich meets Melbourne in this store fitout: We had to cover this fitout of Hophaus Bier Bar because it’s just so cool. Maddison Architects have found a way to make the traditional beer hall trendy. Prost! (Cheers in German.)

The future of customer service: A look at some of the tech you can use in-store to improve your customer service and exceed customer expectations.

Retail digitising needs to move beyond the storefront: Why you need to digitise your back of house operations, and how you can.

 

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