Experience and experiment: the changing nature of the flagship

“Our flagship has always been at the heart of Heal’s, and is symbolic of the significant role that bricks and mortar has played in our centuries-long heritage. From the flagship, our predecessors have worked not only through evolving design and retail trends, but through key moments in modern history, having witnessed the reign of 10 monarchs, three turns of the century, and two world wars. Our flagship isn’t just a store, but a retail institution,” explains Hamish Mansbridge, CEO of Heal’s.

Clearly, flagships are an important part of a brand’s identity. They offer a company a chance to showcase its best product offerings and a chance to experiment with the customer experience to draw in repeat customers.

Many companies like Fortnum and Mason and Heal’s have gone to great expense to renovate its flagship stores while cosmetics brand Sephora relaunched itself in the UK through a new flagship earlier this year – all demonstrating the resurging importance retailers are placing on the flagship store in recent times. But why is this the case?

As Nikki Baird, a global retail analyst and VP of Strategy, at Aptos explains: “They are the premier brand promise to customers. They are where retailers tend to put out their best effort to make the clearest statement about what their brand promises.”

It is the high density nature of these stores that make them so valuable to retailers. In London, places like Oxford Street and Regent Street are full of flagship stores where retailers try to sell a brand to people rather than specific products.

“There’s lots of value in a flagship store, and lots of retailers also use them somewhat experimentally. The first place that they will try out new experiences or new technology will often be in a flagship store, just to see how consumers respond. It tends to give you a broader base of customers, as it is usually a high traffic location, so I would say every retailer should have a flagship store somewhere,” states Baird.

This is something that is echoed by Mansbridge when it comes to Heal’s. Its flagship in Tottenham Court Road has been there for over 50 years and he believes there is no other place it could be successful.

“The history that The Heal’s Building carries is incredibly unique, and as such, I don’t think a space away from Tottenham Court Road, never mind London, would ever be considered as a flagship for us.

“Of course, we can have large stores in major cities when the right opportunities and locations come up. Indeed, we already have a significant presence in Leeds and Kingston, but I would see these to be key regional hubs, as opposed to flagship spaces,” he states.

While flagships are high density and high traffic they are really all about the experience offered to the customer. Furthermore, as the primary function of a flagship is not only to generate sales but also allow them to experiment with different products and different strategies – something Heal’s has done with its latest remodel.

“As part of the re-opening, we will be launching a long-term partnership with the popular creative learning platform Create Academy, which will see the Tottenham Court Road flagship host an exclusive run of workshops throughout the year. This will provide customers with unrivalled access to the expertise of leading tastemakers, influencers and experts, with events across craft and decorative arts, interiors, gardening and food,” explains Mansbridge.

“I would say the vast majority of retailers treat their flagship stores almost as innovation labs. Some of that is because it is such a destination and there’s some pressure to keep it more fresh than your everyday stores. Consumers do expect this to be ever-changing and expect something new all the time,” Baird adds.

It is the increase of experimentation and experience that retailers are using to try and claw back market share following the pandemic. According to Baird, online shoppers are far less loyal to a certain brand so many retailers are now using their flagships as a way to rekindle that loyalty.

“The cost of acquiring a customer online has become very expensive and I think there’s just been a rising awareness that customers who have exclusively an online relationship with a retailer are just not as loyal as customers who have a positive store experience.

“I think what we’re seeing right now is retailers looking to reestablish or cement the relationship with shoppers with more experiences that keep them locked in more from a loyalty perspective,” she states.

This is a sentiment echoed by Mansbridge but he focuses more on the fact that customers are less likely to make a large purchase online therefore a big bricks and mortar site is imperative for Heals.

“For big-ticket items of furniture, the customer journey will likely go from online research, to phoning customer service teams, and visiting stores to try the product before making the final purchase. It’s unlikely that someone will see a £5,000 sofa on our website and make an impulse buy, before seeing how it looks and feels in real life.

“In this sense, we think it’s really important that the digital experience goes hand in hand with our bricks and mortar platform, and both can be complementary to each other,” he says.

So it is clear that flagships are seeing a resurgence in importance as brands begin to see how difficult it is to retain loyalty from online customers. But what is the future of the flagship? Baird believes that retailers will continue to lean into experience and experiment and continue to offer people things they cannot get anywhere else.

“I think it’s gonna continue down the road that it’s on, where it’s very experiential, there’s lots of technology enhanced kind of experiences that consumers can have and things that you do not find, if you go back home in your mall store or street store.

“I see it becoming even more segmented, where flagship stores are really their own thing. They will be the playground of the brand and the everyday store will be more about fulfilment and execution and getting your hands on the product than it is about necessarily having that brand experience,” she explains.