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Dining and Retail: Lululemon and Crate & Barrel Join the Trend

Adding foodservice to a retail environment is hardly new. Department stores have married retail and restaurants for well over a century and drugstores routinely had soda fountains. Brands like Ikea have become almost as well known for their meatballs as their dressers and have contemplated having freestanding versions of their restaurants. It now seems to be a trend that has more urgency as retailers scramble with declining traffic and a need to emphasize experience over simply selling product.

The need to create a reason to come and linger is a driver behind some of these collaborations and some brands, like Restoration Hardware and Tommy Bahama have used restaurants as a driver of brand transformation.

Two notable new entrants entered the fray this week. The new Lululemon Flagship store in Chicago covers 20,000 square feet over two levels and features their first restaurant, Fuel, as well as two fitness studios and plenty of space for their expanding product assortments including a broader range for men and personal care products. The Table at Crate is Crate & Barrel’s first effort in the Oakbrook Shopping Center, largely occupying a space once devoted to their Land of Nod children’s brand.

While both are very different in some ways, including menu and focus, they do share a number of similarities:

  • Strong Partners. They are done in collaboration with seasoned partners. Fuel at Lululemon is done in collaboration with Blue Plate, a well-known caterer and event company in Chicago. The Table at Crate is run by executive chef Bill Kim whose Cornerstone Restaurant Group has created well-known spots such as urbanbelly and bellyq. While there are examples of retailers developing their own F&B expertise, it is likely that the right route is to find credible local partners for expertise and authenticity.
  • Brand Consistent. Not surprisingly, a Crate & Barrel restaurant should look and feel very different than one from Lululemon. The Table at Crate features simple, tasty foods with a farm to table focus. The menu offers a relatively limited variety of offers, from salads to tartines and main courses that are designed to be shared. And of course, everything from the tables and chairs to the forks, glasses, and plates are available for purchase within the store. Fuel from Lululemon offers the expected “healthy” fare from smoothies to bowls but also sneaks in a burger here and there to indulge after a workout. While Crate is more of a sit-down (with reservations) affair, Lululemon’s offer is more casual.
  • Integrated. In the end, a restaurant for restaurant’s sake doesn’t accomplish much unless it ultimately leads to longer, more frequent visits and more retail products going out the front door. Both brands can benefit from a reason to come more often and cross purchasing once a customer is there. Lululemon has touch screens on the first floor to encourage ordering and The Table at Crate has outdoor seating that lets the store itself spill out into the mall. Both, I would suspect, will accomplish their goal of driving more overall traffic.

To be clear, this is not a ubiquitous solution. The Table at Crate takes advantage of excess space and a configuration at Westfield that lends itself to built-in traffic. Not all (or even most) Crate’s are similarly situated. For Lululemon, this is their first experience store. Further food offerings, for the most part, would need to be planned as part of what they have planned for more large Flagship locations. Finally, not all brands lend themselves to a lifestyle spin that enables this combination. Yes, I desperately want to have “breakfast” at Tiffany’s (the chain has more restaurants planned after the success of the New York flagship) but I’m not really sure I need to have a dining experience at Café Beyond (yes, Bad Bath & Beyond has a café at their 6th Avenue location).

For now, expect more dining as chains amp up their experiential component. These two are welcome additions to the mix.

Neil Stern for Forbes

Neil Stern

Neil Stern

nstern@mdretail.com

Neil Z. Stern specializes in strategic planning and the development of new retail concepts. He prides himself on long-standing relationships and repeat engagements with valued clients, many extending over ten years. Neil leads the company’s food retail and due diligence sectors.

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