Merchant Innovation

Can B&M Line Extensions Give Shoppers A Reason To Stop By?

B&M Tries Line Extensions

There seems to be a new form of retail mania sweeping the nation — that of nostalgia. Whenever a struggling brand needs to drum up a little publicity in its flagging products, reviving a long-dead line extension is never a bad idea.

That's the route Pepsi is taking. On August 8, supermarket shelves will once again be graced with the presence of bottles of Crystal Pepsi. It's unclear how the sweetened version of Diet Pepsi is going to fare in the now health-conscious U.S. during its eight weeks back on the market, but Pepsi throwing a bone in the direction of line extensions as a sales-boosting certainty isn't the worst idea a retailer's ever had.

For that matter, it might be the same case for brick-and-mortar merchants trying to drive more traffic.

Leading the charge on the store line extension front is Starbucks, which announced recently that it would be opening a handful of special stores serving top-of-the-line coffee roasts, with floor plans that clock in at twice the size of an average Starbucks and are set up for grab-and-go purchases. On a press call via Zacks, CEO Howard Schultz explained that, after the coffee chain received such a glowing response to the release of its luxury Starbucks Reserve blends, it's decided to go ahead with four "Starbucks Reserve" store fronts that cater to a more refined sensibility for both food and caffeinated drink.

"Given the response we've had to the Roastery and Reserve coffee, we believe that there's an opportunity to build a coffee-forward store," Schultz told assembled reporters. "This is an opportunity for us to elevate food in a way we never have before."

Starbucks Reserve stores will reportedly offer "an immersive, visual coffee bar experience, offering five different methods of coffee preparation." Until more details come out, it's impossible to say how these stores will differ from the varied ones the chain currently runs, but it's safe to say that things will trend toward the higher of classes. There will be differentiation in terms of products served, of course, but other than that, what's keeping Starbucks from serving its Reserve roasts, regardless of surrounding decor, at the rest of its stores?

The likely answer seems to be a line extension of in-store brands.

B&M retailers have been grasping at straws after some vague goal of experiential retail for years, and many (if not most) merchants have taken the concept to mean that the onus is on them to actively entertain consumers irrespective of the purchasing experience. Maybe this means live music in store or celebrity promotions, but most examples of the recent past have involved dazzling customers rather than immersing them in a retail experience focused distinctly on driving purchases.

Have these worked — especially to the extent that B&M retailers need them to in the face of online brands' growing dominance? Hardly. Might the same philosophy under a different banner? It's worth a shot.

Starbucks' Schultz acknowledged to reporters that "customers expect and desire a higher level of product," which implies that retailers have yet to give it to their consumers. However, it's not out of the realm of possibility for other brands to take Starbucks' potentially game-changing idea and spin it off into their own profit-generating enterprises. For example, if Starbucks can make headway with special coffee grinds in upscale store fronts, then there's little stopping department stores, like Macy's, from buying up smaller locations and featuring only the highest-quality items they carry — an upscale Macy's Mini, if you will.

It might be a bold idea for B&M retailers without much wiggle room left, but it's those kinds of rapid pivots that often save the day.



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