Linger a little too long in a store and loss prevention may get a bit suspicious. Wander aimlessly in a hotel lobby or rest your feet atop a coffee table staring aimlessly out the window? No problem.
As the competitive landscape has demanded new skill sets from brands and the delivery of experiential and immersive retail — whatever that may mean — marketers these days are increasingly taking their cues from the hospitality industry. More specifically, hotels offer everything from inspiration on service in a store or retail center to some companies embarking on far more ambitious projects, such as their own boutique hotels for the ultimate in brand immersion.
The convergence is certainly not new.
“Although it’s not a regular thing, it’s growing and the boutique lifestyle industry is growing very tremendously. The industry has been design-oriented for a while,” said CBRE Hotels managing director Bruce Baltin, citing Ralph Lauren’s work on the Round Hill Hotel and Villas in Jamaica and the Armani Hotel Dubai.
“You look at hotels, travel and fashion historically and you can see intersection from designers who have done suites or the interior. We’ve seen hotels and designers collaborate on uniforms. You see that in the restaurant business, too. It’s maybe a Millennial influence,” said Council of Fashion Designers of America president and chief executive officer Steven Kolb. “You look at the data of how people spend money, much of it is on the experience. Look at the shared economy and something like an Uber. People don’t want to buy a car because they’d rather go on a trip somewhere and have that experience or go out to dinner somewhere. The physical is less important to a new generation. So take fashion and the idea of buying clothes. It’s functional, so we have to buy clothes to cover our bodies, but as you look at that consumer doing more experience spending, [hotels are] a good way for fashion to stay relevant.”
W Hotels and the CFDA teamed in 2012 for the council’s incubator program, the current track of which is set to wrap in the spring, to allow designers the chance to visit different locales throughout the U.S. where the hotel has properties for inspiration and to get in front of press or retailers.
“It’s about travel and it’s experiencing new places and learning new things and that’s where they’re just really coming together organically,” said Rob Corea, brand manager of the Americas for W Hotels Worldwide. “When you think about fashion and design, when you’re going to new places or being exposed to new things, the key there is really inspiration and that’s where this organic overlap happens.”
Shinola and Japanese retailer Muji are erecting their own branded hotels, while Karl Lagerfeld has revealed plans to do so as well. Bulgari last month opened one in Dubai. They are joining brands such as Armani, Versace, Fendi and Krizia that already have hotels. Meantime, real estate developers such as Westfield and DJM have taken a page out of the hotel playbook for staff training.
The message? You’re our guest; do what you please and maybe buy a nice bag or watch — and why not Instagram all that while you’re at it.
Fendi in 2016 unveiled Palazzo Fendi, which included the company’s first boutique hotel Fendi Private Suites and the Palazzo Privé apartment in addition to restaurant Zuma.
“We cannot demand to propose ethic values but aesthetic values, yes,” said outgoing Fendi chief executive officer Pietro Beccari. “We can stand for a set of aesthetic values and we can do this through the collections. We can do this through your furniture, your hotel, your lifestyle. That’s what I like about this business.”
The business has certainly changed, with consumer behavior making those linkages between furniture, a hotel and a clothing brand all the more possible with people who demand just as must versatility in the businesses they transact with as they do themselves personally. Thus brands, Beccari said, must be more than the sum of the products they sell.
“You can buy a wallet on the Internet but when you enter a physical contact with a brand you want a comprehensive, immersive experience and I think if you sleep with the brand, if you go to an exhibition and you feel the brand and maybe bring home pictures and physical proof of this contact that you had, it consolidates an experience that is very important to get your awareness out there for the brand. It’s making the client more loyal and want[ing] to discover more. The more you go digital, the more you need [these] moments of contact.”
Contemporary e-tailer Revolve, viewed by many in the industry as a master at the bridging of the online with the off, dipped a toe in the hotel business last year with #hotelRevolve during the Coachella Valley Music and Arts Festival. The idea, led by Revolve chief brand officer Raissa Gerona, saw the Millennial brand take over the 32-room Arrive Palm Springs, spreading the label everywhere from hotel keys to Instagrammable poolside moments and parties.
“Revolve has become a true lifestyle brand that goes beyond what she’s wearing, but where she’s wearing these outfits to, and a lot of these outfits are worn during vacation. And with a vacation includes a hotel,” Gerona said.
The executive said the company expects to roll out #hotelRevolve for Coachella again this year and there’s also a desire now to take the concept global.
Boardriders teamed with Accor Hotels for a 110,000-square-foot, budget-friendly property aimed at Millennials, called Jo & Joe and located in Hossegor. Plans call for additional hotels in Paris and Bordeaux this year.
The property, opened last summer, has a store selling Roxy and Quiksilver merchandise and was built for those looking for a taste of the surf life. There’s yoga, workshops, concerts, individual and shared rooms and common areas aimed at creating a sense of community for the Millennial traveler. In other words, it’s not meant to be just a place offering beds. The idea was to provide both lodging and the activities making up the memories of a vacation.
“We’re looking to develop an answer to Airbnb that allows us an experiential space that someone can come to and really feel ownership of a destination that almost immediately establishes a connection,” Danielle McKenzie, the head of global marketing at Roxy, told WWD just before the property’s opening.
Airbnb launched Trips in 2016, which propelled the company from a platform for simply bookings into a full-on travel firm with suggestions for local tours, lessons and other activities.
Japanese retailer Ryohin Keikaku Co. Ltd., the parent of Muji, had a similar idea to Boardriders and Airbnb of weaving in the external environment and community when it revealed its expansion into hotels with the development of two in China set to open in 2018 and another in Tokyo’s Ginza district that would also include a Muji global flagship store projected to be completed in spring 2019.
“The goal is to offer sleep at the right price, provide a space supporting both body and soul while away from home and connect travelers to local communities,” said Ryohin Keikaku general manager of business development Hiroaki Azami. “Travel has become part of our daily lives. It has evolved from the extraordinary to the ordinary, from something in which we participate to something we create. Muji Hotel provides an answer to this shift in demand.”
The stores work hand in hand with the hotels, Azami added, as “Muji Hotel seeks to provide a physical experience of the Muji philosophy through the texture of the towels, the placement of outlets and light switches, menu and venue of the restaurant and more.”
Hotels become an extension of the brand. It’s one thing for advertising or a sales associate to say a brand is about quality; it’s another thing to actually show it, pointed out Shinola ceo Tom Lewand.
“We are a brand that believes in quality: quality products, quality experiences, quality hospitality,” he said. “For us, it’s a natural extension into a hotel because the guest experience that we try and provide in our stores on a daily basis should be in the same vein as what we’ll provide in the hotel: A world-class experience that has a positive impact on all five senses.”
For Shinola — a brand that’s managed to exude a sense of tradition and heritage despite being in existence for only six years — this isn’t about getting into the hotel game and one-upping the hoteliers, Lewand pointed out.
“It really is treating the guest like she or he is in your own home. You’ll find that with world-class boutique hotels around the country,” he said. “It’s more than focusing on distinction [within the marketplace]. It’s what is the world-class standard that we can meet and maybe exceed.”
The 130-room, eight-floor Shinola Hotel in downtown Detroit will also have 16,000 square feet allocated to food and retail, including a Shinola store. The company, in conjunction with real estate firm Bedrock Detroit, enlisted help from a wide range of companies to bring the property (due out in fall 2018) to life, including Gachot Studios and Kraemer Design Group along with NoHo Hospitality Group. While the brand has attracted plenty of interest from other developers globally who are fans of Shinola, it’s just the one property on the books for now, Lewand said, although, “If we get that right, then we certainly open up potential future possibilities.”
Lewand, who took the top spot at Shinola in 2016, brings with him an interesting background as the former president of the Detroit Lions where the guest experience for fans was also key. Lessons can be learned about hospitality no matter the industry, said Lewand, who often studied the Walt Disney Co.’s practices while in the sports field.
“The opportunity to be involved in the conventional hospitality space of hotels and restaurants does give us the opportunity to learn more about our customer experience in different ways,” he said.
Lucie Greene, J. Walter Thompson Worldwide’s Innovation Group worldwide director, said brands getting into the hotel game in some ways have an advantage over heritage hotel companies that have been playing in the space for decades.
“They are emerging from a space where they’re already successful and they’re just trying to co-opt more of their target consumer spending habits,” she said. “They’re not trying to earn a new consumer; they’re just trying to earn more of their existing consumer.”
There’s a fine line, though, where certainly not every brand is meant to enter hotels.
“It’s about leading with what you’re good at and not pretending to be something you’re not,” Greene said. “These things can be an extension of the immersive flagship [store] done well and can be a really effective way of brand efficacy. It’s the nuts and bolts of hospitality done well to ensure that this is successful rather than just a public relations headline.”
Greene’s group released a forecast report, “The Future 100: 2018,” looking at industry trends expected to take hold in the future, among those the shift to more immersive hospitality. She said experiences, well-being and self-improvement are driving discretionary income spending which, among Millennials, is expected to be $1.4 trillion by 2020 in the U.S. There will be more brands heading into the hotel space that are able to pull off the full experiential environment, she said, adding that even within existing retail concepts, the convergence with hospitality can be seen in varying degrees.
She pointed to Goop as a good example.
Goop operates the pop-up concept Goop MRKT and a permanent door at the Brentwood Country Mart called Goop Lab. Don’t expect messy folding tables, fluorescent lighting or articles of clothing clinging onto racks. Goop is about discovery, whether it be online or in its stores, said Blair Lawson, the company’s former head merchant recently promoted to chief merchandising officer.
“What we wanted to do with our Brentwood store was set that up like a home environment because we really are addressing all of the different parts of our customers’ lives,” Lawson said. “The reason it made sense for us to create this experience that felt residential was because our product offering and what we bring to the customer spans all of those categories.”
Walk through the store’s entrance and it mirrors a greenhouse-style foyer where you can buy, for example, a mister. Continue on and there’s an open kitchen, again, filled with products for sale and then a bathroom where beauty and apothecary lines are thoughtfully arranged. The mood of the store then shifts to a slightly darker ambiance as one walks through to what’s meant to give off the sense of a bedroom and closet.
Goop has mastered the art of contextual commerce online so physical retail now is only taking what’s been learned on the web and moving it into the real world.
“Big picture right now and when we talk about the future of physical retail, there are two kinds of shopping. Looking for something specific — if you know what you’re looking for, you can do that kind of shopping online,” Lawson said. “The other kind of shopping is where you’re expecting the retailer to show you something new, something you didn’t even know about or knew you even needed.”
Apartment by The Line in New York and Los Angeles also does this with its spaces, which are designed to look like residences. Other brands have also tried to infuse more home-like touches in their stores for a message that’s more “stay awhile” than “buy something.” That type of messaging when it comes to guests’ time is something borrowed from hotels, but so is the service that shopping malls are now increasingly thinking about as stores close and consolidation within the industry occurs.
Westfield last summer began to roll out its “Service With Style” program, created with customer experience firms SGE International and LRA by Deloitte, as a hospitality-focused training program across its 33 U.S. properties.
About two years ago real estate development and investment firm DJM Capital Partners Inc. took its entire team to the Montage Laguna Beach to go through the resort property’s full day of training and then modeled its own training program after that for all employees moving forward. DJM’s Pacific City in Huntington Beach or Lido Marina Village in Newport Beach are less “malls” and more fine-tuned, handcrafted places to visit rooted in what DJM director of acquisitions and development Stenn Parton called a “culture of hospitality.”
“That’s a big part of the differentiation of a great retail experience,” Parton said. “We can influence the way [guests] feel and we can try to create these moments and memories for our guests through great experiences rather than looking at it as how do you build this big monument where if you build it, they will come. Those days are gone. It’s too convenient to shop online.”
DJM’s training program homes in on the details: Make people happy and they’re bound to have a good time and come back. That starts with the parking and valet remembering everyone’s names. Or, if a guest asks for directions, not just pointing a finger at where something is but actually walking someone over, Parton said. “One point that was key [in the Montage training] is how little time you have to make a first impression, how important that is and how hard it is to recover if you don’t do a good job.
“It’s interesting as our business has grown and evolved, [retail’s] almost coming back to its purest form of hosting people,” Parton said. “There is something really important in looking at, if people are going to give us their time, that we do have a reason to make sure they have a great experience and they are well taken care of and they feel like there’s something new and unique and dynamic about it. It’s not rocket science and it’s not some crazy technology that we’re trying to incorporate. It’s just extraordinary customer service.”