Walk into any of Aritzia’s 13 stores across Canada, and you might feel like you’ve stepped into a friend’s hip downtown apartment. With its warm woods, retro-chic stylings and fashion-forward product offerings, the funky women’s apparel retailer is one of several small retail chains in Canada that are delighting customers, winning awards and just plain getting attention – much of it garnered through little or no advertising – by tapping into niche-oriented mind-sets.
The focus of these small-yet-mighty retailers – which also include runner’s haven Running Room, yoga lifestyle store lululemon and home decor concept merchant Jane Hall: The Voice of Color – is the customer experience. They offer retail environments which make their customers feel at home, as well as product solutions that simplify intimidating processes as they entrench themselves in their respective communities.
And they’re cleaning up in terms of sales: Aritzia alone has grown by 30% to 50% per year over the last few years, says company president Brian Hill.
According to retail analysts, these players have effectively tapped into the consumer’s desire to be treated as an individual. ‘We have watched an exodus from department stores and seen the specialty store channel grow,’ says David Howell, VP at Toronto-based market researcher NPD Group.
According to NPD figures, department stores declined from 27% of total apparel dollars in Canada in 1999 to 21% in September 2003, while specialty retailers increased dollar share from 41.3% to 43.5%.
‘Due to time constraints, customers want service. They’re not only looking for value – they’re looking for attention,’ notes Howell. ‘Aritzia, [for example,] is small enough that the owner can keep his arms around it and manage staff and train them properly, while lululemon has good people on the floor who understand the product. The big chains have become unmanageable ships, while the smaller stores are more agile and they can react.’
David Saffer, a principal with Toronto-based SECOR Consulting, a strategy consulting firm, further suggests that these retailers are so close to their merchandise as to share a mutual passion with their customers. ‘They really are their own customers; there isn’t a separation between who they are and who the customer is.’
One of the lessons small shops can teach the big guys, says Saffer, is that they don’t try to separate consumer needs into isolated categories. ‘Whereas a department store, by definition, compartmentalizes or departmentalizes, the small firm is all about one thing,’ says Saffer. And that one thing – which both the retailer and the consumer are passionate about – is celebrated.
Nowhere is this more evident than at Running Room – a store for runners, by runners – which launched in Edmonton in 1984 and now has 57 stores across Canada, and three in the U.S. Its employees radiate a passion for the sport, because they’re all runners themselves, says Edmonton-based Jason Stanton, advertising and promotions manager. Stanton says the retailer streamlines the sometimes overwhelming process of buying running shoes by breaking them down by type of shoe rather than by supplier, and then custom-fitting each customer.
As well, Running Room’s clinics – from ‘Learn to Run’ to ‘Triathlon,’ which teach the basics and benefits of nutrition and fitness techniques – are also staffed by people who have graduated from the programs and are runners themselves.
The clinics are advertised in community newspapers, since Stanton says that those who read these papers are typically most interested in what the Running Room has to offer. Meanwhile, a bi-monthly magazine, with stories and tips by runners including Running Room founder John Stanton, is mailed out to the company’s 150,000-strong database. Jason Stanton says the Running Room graduates over 40,000 people a year from the various clinics, which cost $75 per 10-week program. Year in, year out, the niche chain typically achieves 20% growth in sales.
Running Room’s community-based approach can be invaluable as a market-research tool, according to SECOR’s Saffer. ‘If you are building and supporting and involved in the community, by definition, you’re involved with your customer. And if you’re running with your customer, you know what happens at the end of a 10K run, and that real-time learning gets applied back to the store.’
Toronto design concept store Jane Hall: The Voice of Color takes a similar approach, simplifying home décor by breaking down colour into manageable, yet vibrant schemes. The one-location store features themed set pieces such as ‘Tranquility,’ complete with Hall’s own hand-painted chairs and other accessories, each with an accompanying colour palette. Whereas some stores offer thousands of colour choices, Hall says her store offers only 250 paint shades.
‘The experience of painting a house is difficult for most people,’ says Hall. ‘We have the least number of colours – but they work. We’re simplifying people’s choices to lead them to a solution.’
Hall, along with partner Ian Levack, opened The Voice of Color in May 2001 (a second is to open in Toronto next summer) and they’ve been capturing plenty of media attention. Hall says the store has generated $4.4 million worth of publicity, with the help of PR firm Liz Shaunessy & Associates. Hall appears at home shows both in Canada and abroad to promote her business; most recently she spoke at the Fall Home Show in Toronto about how people can overcome their fear of using vibrant colours. In addition, Hall’s store picked up the coveted 2002 Achievement in Retail Concepts (ARC) award from Cadillac Fairview. ‘We’re in the feel-good business,’ says Hall. ‘People want to fall in love [with their spaces].’
An emotional connection to space – as well as fashion – is also achieved by Vancouver-based apparel retailer Aritzia. The high-style boutique store, which opened nearly two decades ago in Vancouver, but only ventured eastward to Calgary and Toronto in the last few years, is adding a second store in Calgary and looking to expand into new markets such as Edmonton and Montreal.
Kendra Nickerson, marketing director for Aritzia, says the stores offer a unique sensory experience with stylish surroundings and well-edited, fashionable clothing lines. Along with such stylish brands as Seven and Kookai, Aritzia also offers in-house lines such as TNA and Talula Babaton – each targeted to different segments within its 14-to-30 demographic. Some stores offer a snack and water bar, DJs spinning hip tunes, and lounge areas by the fitting rooms, also known as ‘boyfriend couches.’ ‘When a customer walks into the store, it should feel comfortable,’ says Nickerson. ‘It’s not a sterile environment, and some have said it feels like a really cool apartment.’
When it comes to marketing, Nickerson says the company has preferred to ‘fly under the radar;’ dollars have largely been spent on improving the in-store environment as opposed to big ad campaigns. However, the company runs a couple of direct-mail campaigns throughout the year – created in-house with the help of Vancouver-based graphic design company Prototype – targeting preferred customers with discounts and gifts.
Nickerson says packaging, including Aritzia’s signature stylish shopping bags – with swirling company logo and bright colours – have also been a key marketing touchpoint. The bags are made from art-quality paper with cotton handles and can be seen from several blocks away due to their distinctive look.
The company’s Web site is in for a make over in the coming weeks, says Nickerson, who adds that Aritzia plans to have more integrated marketing initiatives – including customer-oriented events tied to gift programs and direct-mail campaigns – in the near future.
This may be a good tactic, according to SECOR’s Saffer, who says that a ‘dramatic clarity’ – in which all elements of the small retailer’s passion are incorporated across all media from the store to the Web site to events – can help to solidify that emotional connection to the consumer.
For Saffer’s part, he compares the small retailer phenomenon to the world of big versus little ad agencies in Canada. ‘You have small agencies like Rethink, Zig and Taxi versus the big ones like Leo Burnett and Cossette,’ he says. ‘You can feel the passion that is driven by the small agencies and you can see it elevate the whole advertising community; it forces the big agencies to perk up and raise their level of creativity.’
