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The Rise of Concierge Retail

Published: 20/04/17

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Retailers have always had to balance a number of different competing factors in order to stay competitive, including location, marketing and convenience. As discussed in this space, in today’s market, many retailers are employing an omni-channel retail strategy, making their items available for purchase through multiple channels, such as in-store, online and via smartphone devices. And some companies are doing even more. In the traditional retail model, companies endeavor to make their goods and services as accessible to consumers as possible, so that when the customer needs or wants a particular item or service, they are able to find the right store and make their purchase (and hopefully a few additional unintended items as well!). And while retailers have historically focused their retailing strategies on location, marketing and convenience, there is another blossoming industry trend that appears to be with us to stay – what we would call “concierge retail”.

For example, subscription box services are now available for nearly any item, hobby, or lifestyle that you can imagine. Really love French pastries? There’s a subscription box for that. Hate buying razors?There’s a subscription box for that. Just had a baby? You can get diapers and wipes delivered to your door every month! The main story behind these subscription box services is one of convenience. In today’s hectic world of constant connectivity to work and dual income households, the ease of home delivery via box subscription services can be quite appealing. But sometimes these subscription services do more than just deliver goods periodically- they introduce the consumer to new products, things that the consumer does not even know that they want. And it’s in this fashion that the subscription box service becomes more than a story about convenience, but also one of concierge retail.

Companies such as Stitch Fix don’t sell consumers a specific product. Rather, the consumer signs up for a clothing subscription, enters his or her sizes and style preferences, and then waits to see what will arrive. Each shipment costs a flat rate as a “styling fee” and includes several articles of clothing or accessories. The consumer can decide which items to keep and which to return, but the styling fee is never refunded. Therefore, the company is selling clothing, but also introducing consumers to a style or brand they may not have otherwise considered. But clothing is not the only thing following this trend. Personalized boxes are available for everything from beauty products to dog toys to wine, taking into account the consumer’s (or their dog’s) preferences.

And these strategies seem to be working. Stitchfix brought in $250 million in revenue in 2015, and even more last year, while wine clubs saw double digit growth in 2016. While location, marketing and convenience are still important factors for a retailer to consider, today’s consumers are looking for more personalized experiences, and concierge retail appears to be offering just that. Rather than presenting and delivering goods as a typical commodity, retailers are using the box subscription service as a means to tailor their products to the particular customer and provide a more individualized experience, along with the allure of the element of surprise.

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Development, acquisition, permitting, zoning, financing and leasing make up the core of Chelsea Johnson’s practice. A Real Estate Associate in our Boston office, Chelsea represents clients in the development of mixed-use, office, retail, institutional, industrial and residential projects.  Prior to joining Goulston & Storrs, Chelsea worked primarily with the low-income housing and solar investment tax credits by setting up transactions to finance the construction, rehabilitation and management of affordable housing and renewable energy projects.

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Commercial real estate acquisition, financing, development and leasing are the focus of Daniel Rottenberg's real estate practice.

Dan, a Director with the firm, has widespread experience representing owners and developers of complex mixed-use projects.