<\/p>\n
Caf\u00e9 Dior in Chengdu. Carhartt Coffee in London. Santander Work Caf\u00e9 in Brooklyn.<\/p>\n
Around the world, brands ranging from luxury fashion houses to workwear to banks are opening up coffee shops.<\/p>\n
The phenomenon of retailers hosting coffee shops isn\u2019t exactly new, as anyone who\u2019s ever been to a Starbucks inside of a Target can tell you. But the number of brand-owned and -operated coffee shops seems to be creeping up. Ralph\u2019s Coffee, owned by Ralph Lauren, opened in Manhattan in 2014, and is now neighbored by the Blue Box Caf\u00e9 at Tiffany & Co., a Capital One Caf\u00e9, and a Uniqlo Coffee around its Fifth Avenue location. (And that\u2019s not even including the brand restaurants.)<\/p>\n
Post-Covid, there\u2019s been a resurgence of interest in preserving or even establishing \u201cthird places,\u201d which refers to places to spend time outside of home and work at the same time that brands are seeking to broaden their customer bases on- and offline by investing in customer experiences. Coffee shops, it seems, are working to satisfy both sides.<\/p>\n
Earlier this year, Japanese-owned clothing retailer Uniqlo opened a coffee shop\u2014its first in North America\u2014at its store on Fifth Avenue to \u201cenhance the shopping experience\u201d for customers and project a welcoming brand persona, Nicolas Cessot, head of marketing for Uniqlo North America, told us.<\/p>\n
\u201cIt\u2019s a great branding proposition for us,\u201d Cessot said. \u201cIt is a global flagship, so for us, it\u2019s a global opportunity to continue to spread our brand [awareness] to customers from all over the world.\u201d<\/p>\n
Uniqlo has existing coffee shops in Tokyo, where Cessot said customer experience and hospitality is a cultural priority, and Manila. Other retailers, like French fashion brand Maison Kitsun\u00e9, also started their journey into coffee in Asia, with the first Caf\u00e9 Kitsun\u00e9 opening in 2013 in Okayama, Japan. Earlier this year, Japanese lifestyle brand Muji opened a food market in Manhattan, its first in the States.<\/p>\n
It\u2019s not just brands from overseas expanding their hospitality offerings. American brands Kate Spade and Coach have been experimenting in the hospitality space in Dubai and Jakarta, Indonesia, respectively, while Coach has also opened up coffee shops in Texas and New Jersey.<\/p>\n
Beyond reaching new customers around the world, brand coffee shops allow retailers to reach customers across different interests\u2014including those who might not want new clothes, but do want a cup of joe, Cessot said. That seems to be a key reason why higher-end brands like Dior and Ralph Lauren are opening caf\u00e9s: to reach customers outside of their usual demo, specifically those who may not be able to or may not want to spend big bucks on a purse, but can justify a $7 iced latte.<\/p>\n
\u201cIt\u2019s giving people this opportunity to engage with the brand from a lifestyle standpoint, even if they can\u2019t purchase a product,\u201d Michelle Baumann, chief strategy officer, commerce at VML, told us.<\/p>\n
That being said, a small purchase like a coffee can increase customer \u201cdwell time,\u201d which could mean more time to consider a larger buy. \u201cThe longer you\u2019re in [store], the more likely you are to browse, the more likely you are to purchase,\u201d Baumann said.<\/p>\n
And, it seems, more likely to post. Canadian clothing brand Aritzia has been operating its in-store A-OK Cafes since 2018, and customers often share videos and images of drink tokens online, Baumann noted. Daniel Boulud, chef at Tiffany & Co.\u2019s Blue Box Caf\u00e9, told Food & Wine earlier this year that \u201cwith social media today, [the caf\u00e9] has even more appeal\u201d with its colorful interior.<\/p>\n
\u201c[Caf\u00e9s are] doing a lot in terms of the amplification and being able to create that earned equity,\u201d Baumann said. \u201cYou\u2019ve got Instagrammable spaces and a lot of social media exposure.\u201d<\/p>\n
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After opening its Fifth Avenue coffee shop, Cessot said Uniqlo saw plenty of user-generated content about the location on TikTok and Instagram.<\/p>\n
\u201cWe\u2019re\u2026encouraging people to create and generate more content so we can continue to spread the news and spread our brand awareness across the country,\u201d he said.<\/p>\n
Whether it\u2019s a YSL Caf\u00e9 in Paris or an Ikea cafeteria, a unifying purpose among them all seems to be a desire to enhance the customer experience, Baumann said.<\/p>\n
At Capital One, which opened its first Capital One Caf\u00e9 in 2014, that is certainly the case, said Jennifer Windbeck, SVP of retail bank channels and operations, who told us the move was inspired, in part, by the insight that customers value in-person interactions around customer service and money management needs.<\/p>\n
\u201cThere\u2019s a major purpose of the caf\u00e9 that\u2019s not just basic banking,\u201d Windbeck said.. \u201cIt is, \u2018How do you personify a brand, and what is that in-person experience?\u2019\u201d<\/p>\n
Capital One now operates more than 60 caf\u00e9s in metropolitan areas across the country, the latest of which opened in New York\u2019s SoHo neighborhood earlier this month. Inside the caf\u00e9s, the brand hosts events ranging from coding classes to financial literacy workshops, which Windbeck said has helped build Capital One\u2019s brand image as more than a credit-card company. Capital One Caf\u00e9s also run promos that aim to encourage repeat foot traffic, including one where visitors get free drinks every Monday of the MLB season.<\/p>\n
While the ultimate goal is to drive customer sign-ups, Windbeck said the caf\u00e9s (and deals) are for everyone, not just Capital One customers. Offering amenities like free wi-fi allows Capital One to market to the masses \u201cin a very intentionally non-sales\u201d and \u201corganic way,\u201d she said.<\/p>\n
While there are plenty of benefits, opening a coffee shop can be a costly endeavor when considering the labor and materials, not to mention the potential for stains from coffee spills. (Neither Uniqlo nor Capital One would disclose operating costs or whether the caf\u00e9s are revenue generators, although Windbeck said the continued expansion of Capital One Caf\u00e9s could be seen as a sign of Capital One\u2019s satisfaction with its results.))<\/p>\n
There can also be reputational risks. Besides possibly getting roasted like the beans it\u2019s serving, Baumann noted that a brand coffee shop could be a threat to a brand\u2019s image if the location doesn\u2019t provide an adequate level of service. That\u2019s especially true if the coffee isn\u2019t free she said.<\/p>\n
\u201cIf you have poor service, if people are waiting for a long time, all of a sudden that\u2019s actually going to detract from the overall shopping experience,\u201d she said.<\/p>\n
For help on those fronts, some retailers choose to work with existing coffee brands like Verve Coffee, Capital One\u2019s coffee partner of choice; La Colombe, which is served at Ralph\u2019s; and Allpress, which has worked with Carhartt and Patagonia to help ensure product quality. But as with any business, there can also be risks for partners, Baumann said, citing Ralph\u2019s growing reputation as a tourist destination.<\/p>\n
Still, she said, she expects more brands to get in on the trend, especially since it can serve as a way to introduce novelty and surprise customers with additional offerings. If nothing else, visitors to these stores can know one thing for certain: No one\u2019s going to ask them to leave their coffee cups at the door.<\/p>\n<\/div>\n