The store-within-a-store concept that seemed like a novelty just two years ago is about to become much more ubiquitous, now that some major retailers — including Target, Kohl’s and Macy’s — have boosted foot traffic and sales by hosting smaller versions of other chains retailers.
Retail traffic analytics firm Placer.ai predicts the concept will play a big role in 2023 location expansion strategies, now that Target in recent months has racked up significant visitor increases at its stores that include an on-site Disney Store location, with traffic edging ahead of stores that don't have one.
The shops-in-a-shop have also helped retailers, such as Target, soften downturns during certain times of the year, outside holidays, when traffic otherwise lags. Other examples include the rising number of Kohl’s with an in-store location of cosmetics seller Sephora, and Macy’s mini-Claire’s, which sell cosmetics, jewelry and other beauty accessories.
In an August statement, Kohl’s said the 200 Sephora locations that opened within its stores during 2021 “have maintained a high single-digit lift” in sales compared with non-Sephora locations, and nearly 400 in-store Sephoras that opened this year have so far seen a “mid-single-digit” lift. The otherwise struggling Kohl’s projected that its in-store Sephora locations will reach $2 billion in sales by 2025.
More store-in-store configurations are on the way. Cosmetics retailer Ulta Beauty partnered in August 2021 with Target to open more than 100 in-store Ulta locations, and the two retailers have since made arrangements for at least another 800 in-Target Ulta shops to open nationwide over the next few years.