Companies large and small are increasingly looking at Santa Monica as the ideal location for “flagship” retail outlets.
The nearly 8,000-square-foot Verizon Wireless Destination Store at the Third Street Promenade opened July 1, following Ron Robinson’s “lifestyle concept store” that opened on 5th Street in January. They join companies like Muji, Uniqlo and Steak n’ Shake that have chosen Santa Monica as the location for flagship, demonstration or specialty stores.
Flagship stores are often the primary location for a retailer. They are typically larger, carry a wide selection of the newest merchandise and offer services or experiences exclusive to that location.
With 7.3 million visitors who spent a combined $1.63 billion in 2014, Santa Monica continues to appeal to businesses looking to establish a presence and premium location on the West Coast.
“Santa Monica is a natural destination for flagship (stores),” said Jennifer Taylor, Economic Development Administrator for the City of Santa Monica. “Santa Monica is a very vibrant market and it’s also internationally recognized. International and national stores are really looking to have a foothold in the market. … Having a location here in Santa Monica draws on all the visitors we get each year.”
Rob York, a retail consultant to Downtown Santa Monica, described flagship stores as “very critical for a brand” and as a unique opportunity to engage with their customers in a physical space. Flagship stores focus specifically on high-profile, high-traffic areas that serve a broad visitor base.
“In Southern California, Santa Monica has really emerged as a premium destination for that type of (store),” York said. “They really create a unique destination from a retail standpoint.”
In the case of Verizon, elevating a store from location to destination is the goal. Ken Muche, director of public relations for Verizon Wireless, explained the concept behind the “Destination Store” label.
“Just as Santa Monica itself is famous across the country and the world as a destination where people go to (the city) to experience the culture,” he said, “this destination store is a draw for people who are looking for a completely new shopping experience.”
In addition to displaying merchandise, York said, flagship stores typically offer a variety of on-site services to attract customers at a time when a growing percentage of retail transactions take place online. Visitors to Verizon’s store can turn a photo on their phone into a personalized cellphone case delivered via pneumatic tube or kick a soccer ball outfitted with sensors that give feedback via a mobile app. Offering experiences alongside products at flagship stores is becoming more and more of a central strategy for retailers, York said.
With 20 years of experience at Fred Segal, Robinson is no newcomer to Santa Monica’s retail scene. However, the entrepreneur considers his “lifestyle concept store” to be a flagship because it blends lifestyle and retail into a single, cohesive experience.
In addition to fashion merchandise, the store offers flowers designed by a local florist, a complementary refreshment area where shoppers can order personalized beverages and a rotating gallery featuring the work of local artists. The free Saturday morning yoga classes are followed by healthy snacks and kombucha.
“This is my expression of what retailing should look like today and tomorrow,” Robinson said, “orienting both products and the shopping experience around the lifestyle of our customers, and how we project that lifestyle is going.”
A growing facet of that lifestyle is technology. Both flagship stores provide shoppers with hands-on opportunities to engage with technology in new situations — visitors to Robinson’s store can see jewelry that changes color to match their outfit or alerts them when someone calls their phone.
Aligning a Southern California vibe and a growing tech presence, Santa Monica is a natural choice for businesses looking for a foothold in this market.
“Santa Monica was a unanimous choice for us,” Muche said. “You have this perfect blend of technology and culture coming together.”
In a rapidly changing industry, brick-and-mortar retailers can implement high-tech features, bringing these innovations off the Web and into the hands of consumers.
“It’s a much more experiential environment than anything you can create online,” York said.
Drawing shoppers offline and into Santa Monica has benefits for many of the area’s merchants, York added. Flagship stores’ 10-year lease commitments help to keep the area stable while driving foot traffic to smaller businesses located throughout downtown.
While it can be very difficult for independent stores to compete with larger corporate entities and afford the higher rents that accompany large stores, York noted, this is typically not a problem with the Promenade because the retail spaces — at an average of 7,500 square feet — are significantly larger than what most smaller businesses are looking for.
York said clustering the larger stores in one area could open up other parts of town for smaller merchants, and officials said each of Santa Monica’s retail zones has its own identity.
“All our districts are very vibrant,” Taylor said. “The Third Street Promenade just continues to perform phenomenally.”
Photo by Nicholas Salazar: Ron Robinson (above) and other retailers have designedflagship stores in Santa Monica.