How Food Drives Fashion Retail Traffic

How Food Drives Fashion Retail Traffic - GSP

Retailers have been chomping at the bit to create an in-store destination. And they’ve hit gold by luring customers in with food. Big names such as Macy’s, Urban Outfitters, Ralph Lauren and Tommy Bahama have now added restaurants to their retail locations. Restoration Hardware wants a wine bar in its Boston store. Saks Fifth Avenue is opening Sophie, a “global-American” restaurant. Brooks Brothers is adding a steakhouse. Even bike shops are adding juice bars and Walmart teamed up with Checkers drive-ins. More than a marketing gimmick, retailers are viewing these food offerings as an opportunity for a brand extension.

Millennial-fave Urban Outfitters recently announced plans to open a full-service restaurant in Austin, Texas. Judging by the amount of space they’ve secured, it will most likely resemble Space Ninety 8, a large-scale retail “event” in Brooklyn with a store, art gallery, marketplace, bar and Gorbals restaurant. Urban Outfitters tapped Top Chef winner Llan Hall (also host of the Esquire Network show Knife Fight). Gorbals’ cuisine has been described as a Jewish-Asian mashup. (Bacon-wrapped matzo balls, anyone?)

Last November, Ralph Lauren added his third retail restaurant, the Polo Bar, to his New York flagship store. It has the kind of atmosphere that gets talked about in Architectural Digest. With warm woods, Equestrian-themed art, aged leather banquettes, cozy lighting and impeccably dressed wait staff in wingtips, it resembles the classic American style the Lauren name eschews. The Polo Bar features “simple foods” from Lauren’s childhood – grass-fed beef supposedly raised on his Double RL ranch in Colorado, Cobb salads, martinis, corned beef sandwiches. “I want to be the restaurant you want to go to twice a week,” said Lauren.

At the same time, Ralph Lauren’s first-ever coffee shop, Ralph’s Coffee, opened next door. Imagine a polo you can pour. Others in the world of fashion who are mixing coffee with clothes: Club Monaco, Urban Outfitters and Onassis Clothing (a high-end men’s store). As Club Monaco’s marketing and communications director put it, “We wanted to create a space where you don’t just come to buy a sweater.”

Tropical-themed Tommy Bahama retail-restaurant locations are meant to immerse shoppers and diners in the island lifestyle. Tommy also proves that adding food can be lucrative. Tommy Bahama CEO Terry Pillow is quoted as saying the 14 stores that have restaurants generate 2.5 times the sales per square foot of its other 97 stores. Urban Outfitters estimates that its Terrain stores with food have double the customer “dwell time.” Two restaurants/retail markets run by ABC Carpet & Home bring in “hoards of customers daily.” See, you can have your cake and eat it, too.

Macy’s Herald Square went upscale when it added a 10,000 square-foot, full-service Italian restaurant, Stella 34 Trattoria, with a bar, brunch menu, wood-burning ovens for pizza, pasta to go, gelato and more.

Laurence Kretchmer is the managing partner for several of chef Bobby Flay’s restaurants. He told the New York Times, “The retail equation has changed and it has forced retailers to think differently. People have to be given more reasons to go to the stores now. People shop in their underwear now.”

Back in the 1900s, the retail-and-restaurant combination was quite common. Most of the well-known department stores had restaurants and tea rooms for the “ladies who lunch.” The Magnolia Room at Rich’s became the epitome of fine dining in Atlanta. And Marshall Field’s reportedly served as many as 10,000 meals on busy Saturdays during the Christmas shopping season.

Of course, one retailer who consistently outperforms all others both on Wall Street and in customer service has been in the restaurant business for years. Nordstrom operates 200 retail-restaurants locations in several formats from café to full service. Coincidence?