L’Occitane reinterprets traditional flagship-store idea with new experiential retail concept

On Wednesday, the French beauty brand will open at 555 5th Avenue in Midtown Manhattan with a new retail concept that leans heavily into experiences. The store dedicated an area to social media, with a video live feed of the company’s U.S. Instagram account, where the brand is trying to grow its presence. There’s an opportunity for shoppers to “bike through Provence” using stationary bikes against a scenic French background. Customers can also test the brand’s first virtual reality experience, which takes them through a 360-degree hot air balloon ride though the south of France, while receiving a free, real-life hand massage with L’Occitane products. On the merchandising side, a rain-shower sink is prominently displayed at the front of the store for shoppers to test products. Surrounding merchandise includes L’Occitane’s best-selling ingredient franchises, like shea and almond bath and body products.

New-customer acquisition was the driver for L’Occitane rethinking its retail presence, said Paul Blackburn, vice president of concept design, construction and merchandising at L’Occitane North America. The new 1,870-square-foot store consolidates existing businesses that were located nearby in Manhattan’s Times Square and Rockefeller Center, with a tourist-centered slant. After being open in a soft launch for a week, over 2,400 prospective customers have walked into the store, making it the most foot-trafficked store in America, according to Blackburn.

The new 5th Avenue location is significantly bigger than another one of the company’s largest stores, the Flatiron location in Manhattan, which opened in December 2016 and incorporated technology like smart beauty fitting rooms.

Blackburn said the new store location is meant for the company to “take a risk.” Sixty percent of the in-store setups will change about four times per year, with a focus on key merchandising messages, though the social media photo area and the VR experiences will stay longer, depending on interest and engagement.

“It’s a space that is meant to be ever-changing around product, campaign and philanthropy stories,” he said.

For the launch, the store has dedicated a section of the space to the company’s sustainability initiatives: In May, L’Occitane partnered with international recycling company TerraCycle to collect empty bottles and packaging of all brands of beauty and skin-care products from customers. In exchange, shoppers receive a 10 percent discount toward one full-size L’Occitane product purchase. Customers will also be able to engrave and customize L’Occitane merchandise and Swell water bottles (which the brand has partnered with for the new store) with their names and other personalized designs.

L’Occitane’s in-store investments come at a time when the brand is seeing 86 percent of its business in stores versus online. E-commerce has been a key driver for loyalists replenishing product, but stores better drive new business. The company reported net sales of $1.5 billion for 2018, a 4.6 percent increase over 2017. That was driven by positive same-store sales growth, and new and renovated stores — the company opened 41 stores and renovated 153 in the last year.

That the brand is willing to iterate on the traditional flagship store model and yearly calendar cadence of products is a growing opportunity, said Blackburn, who wants to change the L’Occitane perception from serious and old-fashioned to “modern and fun.” The average age of the L’Occitane woman is 43, and she is fairly affluent, said Blackburn. The new store concept isn’t just a play for millennial or Gen Z consumers, he added, but rather a reach for new customers across all demographics.

While Blackburn wouldn’t disclose the initial investment in this kind of store concept, he did say it was less than the capital required for the traditional 2016 Flatiron flagship.

Still, with the store being updated frequently, Blackburn said he sees store investment continuing. He also sees this new retail format as a novel way to grow the L’Occitane base in key international markets.

“We have an obligation as a brand to continue to push the envelope,” he said. “There needs to be a reason for a customer to come into stores now more than ever. We are giving her that reason here.”