NYC’s SoHo Serves as Testing Ground for Chobani, Samsung

October 1, 2014

Bloomberg | October 1, 2014 – Prince Street in New York’s SoHo, a neighborhood packed with tourists and shoppers, has become a test lab for retail ideas.

Companies ranging from yogurt maker Chobani Inc. to smartphone giant Samsung Electronics Co. have opened up experimental stores on the street — not so much to make money but to pick the minds of consumers and try out new products. (Yogurt with red pepper, anyone?) They also can track customers with heat maps and other high-tech monitoring.

Figuring out the secrets to retail success is crucial to an industry threatened by a long-term slump. Shopping-mall traffic is down, forcing consumer companies to close underperforming stores and heavily discount their merchandise. Retail sales during the back-to-school season grew at the slowest rate since the U.S. recession ended in 2009, according to research firm Customer Growth Partners LLC.

That has companies increasingly looking to Prince Street for ideas and inspiration.

CHOBANI SOHO (150 Prince Street) — The Chobani store looks a bit like a trendy cafe, with warm wood walls, coffee and shelves stocked with extras like estate olive oil. But the main purpose of the company’s sole retail outlet is to see how customers react to new things. Peter McGuinness, chief marketing and brand officer, calls it an “incubation center for us. It’s also the most beautiful ad for Chobani.”

The place sells yogurt, of course, though with some unusual options. You can get a cup of it topped with red pepper harissa, feta, olive oil and mint, for instance. The two-year-old store doubled its size in February, expanding its menu and adding a coffee bar. Some of the new seasonal items on the menu have made their way to supermarket shelves — including pumpkin-spice blend, the company’s fastest-growing item ever, McGuinness said.

The store also is a showcase for the brand. The Chobani name is stamped on everything from the cubed orange seat cushions to the take-home glass cups that the yogurt dishes come in. Using glass containers for the yogurt makes it seem more homemade and less manufactured, said Virginia Morris, vice president of consumer strategy and insights at consulting firm Daymon Worldwide.

Sales at the SoHo shop are up 55 percent over last year, and Chobani is adding delivery and catering. It also plans to open at least 10 more locations in New York and other large cities in the next year or so.

“We set out to really make a physical manifestation of the brand,” McGuinness said. “We want to push yogurt consumption in the U.S.”

To get the word out to New Yorkers, Chobani is teaming with on-demand ride service Lyft Inc. to deliver 1,000 free cups of its pumpkin-spice flavor around the city today, followed by a giveaway at the store tomorrow.

SAMSUNG GALAXY STUDIO (130 Prince Street) — There are plenty of phones and tablets on display at the Samsung Galaxy Studio, but you can’t buy one here. You can’t buy anything, in fact. Even the coffee and pastries are on the house.

The studio looks like a combination of a hipster lounge — with low lighting, easy chairs and white-brick walls — and a school fair, including a kids’ play area, free photos and a make-your-own T-shirt station. There’s even a rewards card that tallies points and awards small prizes for trying different devices.

The idea is to highlight the features of Samsung’s Galaxy lineup “without saying, ‘We are better than someone else,’” Morris said.

The biggest “someone else” is Apple Inc., which has its own retail location down the block on Prince Street. The Apple store had a long line of customers waiting for the iPhone 6 that day.

At the Samsung studio, visitors can belly up to the circular coffee bar in the middle of the store to test out tablets as they place orders. And because nothing is for sale, customers feel more free to play around without fear of pressure from store employees, Morris said.

The store, opened last November, also holds workshops and offers product support, said Jessica Baker, a spokeswoman.

BIRCHBOX (433 West Broadway, just south of Prince) — Birchbox, which sells makeup and grooming products to subscribers, began as an Internet startup. This store, which opened in July, serves as its only brick-and-mortar outlet. Shoppers can buy products in larger sizes than what the company ships out in its signature boxes, which are mailed to subscribers in changing assortments each month. Visitors can build their own Birchboxes, do their hair, nails or makeup, or use a desk-sized touch screen to sort preferences and get recommendations.
Customers have flocked to the store, and the four-year-old company is now considering opening up more locations.

“It’s almost like it’s a Disneyland for subscribers.” said Birchbox co-founder Katia Beauchamp.

For now, the store gives executives the chance to learn more about customer behavior, aided by technology like heat-mapping sensors, which track where visitors spend the most time. It also introduces Birchbox to a new audience, Beauchamp said.

“It’s an investment in our brand,” she said. “We want people to know Birchbox as a retailer.”

WARBY PARKER (121 Greene Street, just north of Prince) — Like Birchbox, Warby Parker is best known as an e-commerce site. The company sells eyeglasses online, appealing to millennials with its relatively affordable style.

Still, it now has nine stores, with almost half in its hometown of New York — and a handful of showrooms at other retailers. The newest opened in Atlanta this week. At the crowded SoHo store, shoppers try on frames before sashaying over to a photo booth where they can snap and e-mail their choices to family and friends.

Co-founders Neil Blumenthal and Dave Gilboa said having a bricks-and-mortar presence gives customers a memorable experience with the brand and has always been important to the online merchant.

The SoHo store has the company’s hallmark retro look, with bookshelves, exposed-pipe ceiling, and long glass display counters with memorabilia like a copy of Allen Ginsberg’s “Howl.” Nonprescription glasses can be purchased onsite, and a desk in the back offers $75 eye exams and the chance to place online orders.

“It’s creating an offline experience to interact with the brand,” Morris said.

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