Why retailer x retailer collaborations are catching on – Glossy

April 9, 2021 Mary

This week, a deep dive into the emerging trend of partnerships between retailers.

As online competition between multi-brand retailers heats up, offline collaborations between them are on the rise.

Nordstrom and Dover Street Market announced on Monday a partnership that will bring DSM’s renowned shopping experience to three Nordstrom stores via shop-in-shops. For six weeks, Nordstrom’s Space, the in-store boutique driven by vp of creative projects Olivia Kim and focused on emerging designers, will be transformed into a downsized version of Dover Street Market Paris. To date, DSM has taken a global approach to physical retail, setting up shop in cities from New York to Ginza. Through Nordstrom, it will reach shoppers in New York, L.A. and Vancouver.

While brand-x-brand collaborations have become ubiquitous, two retailers coming together is a more novel strategy. For years, the rising costs of digital ads have shed light on retailers’ cutthroat competition for customers. But amid the pandemic’s acceleration of e-commerce and tainting of physical experiences, retailers with stores are facing a unique challenge — and are letting their guard down.

The theory: Two retailers are more likely than one to create an experience that’s worthy of the trip.

“Retailers understand that a [curated physical] experience is a very important part of their business, but they also understand that pulling that off requires a set of skills and a headache and attention that not all of them have the resources to manage right now,” said Tal Zvi Nathanel, co-founder and CEO of physical retail platform Showfields. “So they’re thinking about the future in a more collaborative way, with the understanding that every retailer shares the same interest: to get in front of the customer.”

In January, Saks Fifth Avenue debuted Barneys at Saks on the fifth floor of its NYC flagship and via its small-format store in Greenwich, formerly known as The Collective. In this case, the retailer collaboration was part of the liquidation plan spearheaded by Authentic Brands Group, after acquiring Barneys in late 2019.

The concept is an extension of Saks’ product offering, with a focus on Barneys’ signature of emerging designers. And the experience regularly revolves, along with the featured styles. Also featured in the space is Honeybrains, a restaurant focused on brain-healthy foods. Prior to closing, Barneys’ Freds restaurant was a popular destination.

Saks chief merchant Tracy Margolies said it’s too soon to speak to the success of Barneys at Saks. She called it a play to compete — with single retailers and, seemingly, Instagram, which is increasingly being hailed as fashion shoppers’ go-to source of discovery.

“We want this to be the ultimate destination to experience, explore and discover fashion,” she said. “What’s most important to us is that we’re exciting our customers and providing them with the best edit.”

Early to this concept was Farfetch-owned Browns, which on Monday opened its relocated flagship in London’s Mayfair. Creative partnerships with retailers, as well as artists and designers, have become staples of the company, said CEO Holli Rogers. “We hand over retail space to make way for culture and community, and to offer storytelling to the customer beyond the product,” she said.

Browns’ retailer collaborations to date have included hosting now-defunct rental platform Armarium in 2018 and Stadium Goods in 2019. Browns has also been the guest star, launching its localized Nomad pop-up concept at L.A.’s Fred Segal in 2017. The company is still bullish on the strategy.

“We know that, in today’s retail climate where customer behavior is constantly changing, our retail approach needs to deliver on a new notion of a shared community,” Rogers said.

And it’s not necessarily a now-classic case of the industry’s old guard looking to cling to relevance by way of the new guard’s community or concepts.

For example, in March, 2-year-old Showfields launched MagicBox, with the intention of becoming retailers’ go-to partner for providing a custom, supplementary in-store experience around a theme, like sustainable or POC-founded brands.

“We’re constantly looking for ways to give our customers a better way to discover, engage and showcase brands and art, and any place where we have the ability to do so is a place that we want to be,” said Nathanel. Within one year, he said, the goal is to have “thousands” of MagicBoxes deployed.

Digital alternatives are far less appealing, he said: “Online marketing has literally become weaponized [during the pandemic] because that’s the only thing brands and retailers have had left to play with. It’s 100% more competitive online.”

Neighborhood Goods, a retail platform launched in 2017 that dubs itself “a new kind of department store,” is in less of a hurry to collaborate with a retailer. But co-founder and CEO Matt Alexander said he sees the value that doing so would offer both companies.

“We’d definitely be interested in collaborating with [a traditional department store], and for some of the more established folks, it’s great that they’re aiming to bring in a younger or more localized mix of brands,” he said. “In this department store-slash-multi-brand sort of retail space, we often overcomplicate it. But really what it comes down to is just whether or not you have a relevant mix of brands and products.”

In some cases, a partner may be crucial to offering a standout product assortment. Neighborhood Goods, which reached “an unexpected, nascent path to profitability” via growth in 2020, is currently seeing new demand from established, traditional brands, as well as luxury brands. They’re seeking alternative sales channels, after being “disillusioned by the larger problems with large retailers and department stores [during the pandemic],” Alexander said.

Among ways Neighborhood Goods differs from well-known department stores, outside of its platform model, is that its stores are located in “vibrant areas,” versus malls. For example, its Austin location, opened in March, neighbors Texas’ first Sweetgreen and SoHo House locations. The company also offers bells and whistles like in-store restaurants and on-demand delivery.

Some large retailers have begun teaming with Neighborhood Goods by selling their private-label brands through its stores to increase awareness, said Alexander, though he declined to specify what companies.

“Every retailer out there needs to ask: What do convenience, community, content, curation and connection mean to my customers today? The result of that will be these types of [retailer-retailer] collaborations,” said Nathanel. “Because, in the end, retailers are like a publisher with an audience. Creating content that will keep their customers excited is the hard thing to do, but it’s necessary to be successful.”

3 questions with Olivia Kim, Nordstrom’s vp of creative projects and home

Kim breaks down the motivation and expectations for the Nordstrom x Dover Street Market Paris retail collaboration.

Why is Dover Street Market a fitting partner for Nordstrom?
We’ve had a longstanding relationship with the Dover Street Market / Comme des Garçons team. We started carrying their brands in Space when we launched five years ago, and we’ve since worked together on special installations in our NYC men’s store and women’s flagship. A partnership with Dover Street Market Paris felt like a natural next step. Beyond the fact that they have this incredible ability to scope out what is on the pulse of fashion right now, they also feel so closely aligned with Space as they both champion emerging designers.

What are your goals for the partnership?
Being able to support emerging designers is the ultimate goal. Dover Street Market Paris is a platform that not only introduces these brands to other customers and retailers, but [they also support] their business operations and growth. They provide foundational support to these brands, and we want to support their support. To see these designers succeed pushes us to continuously innovate with new and different ideas.

What does the Space customer want from the physical retail experience?
Space is a place within Nordstrom that can act like a boutique itself, and try out different and new ideas through authentic storytelling. Our Space customer is extremely curious and knowledgeable about what’s out there, and always looking for newness. They come to Space to see our point of view on culture, fashion and lifestyle. The beauty of Space is that it dabbles in a little bit of everything, including apparel, shoes, jewelry, beauty and home.