Merchant Innovation

Brookstone’s Second Act

A year-and-a-half ago Brookstone was in bankruptcy, another apparent casualty for the mall ecosystem that supported it. But a last minute reprieve from a group of Chinese investors gave the firm a new chance — a chance they are using to double down in innovative, new inventions and an expansion into China. Will it work?

There are some things that anyone who lived during the 1990s did — whether they care to admit it or not. We all learned the Macarena, everyone got a Rachel haircut and telling another human being to talk to the hand in no way sounded ridiculous to anyone. And rolled into the pantheon of quintessentially ’90s activities has to be the pilgrimage to the vibrating massage chair that every Brookstone in every mall in America contained.  

Brookstone sold other things. Pseudo-perpetual motion machines, self-cooling glasses and fancy chess sets were always popular gifts for the relatives one both didn’t know very well but were interested in impressing for some reason. But from Sacramento to Savannah, from Boise to Boston, Brookstone was all about the vibro-massage chair and as such it was the natural midway point in any visit to the mall.

Sure, almost no one ever actually bought it, but Brookstone didn’t need you to buy it, they just needed you to get a geode or talking singing candelabra while you were checking in with the chair, which they knew you would because after walking around a mall long enough, everyone needed a turn in the chair.

But then a terrible thing happened to Brookstone: the Internet made it possible to shop while sitting down and suddenly shopping sprees didn’t require marathon mall walking sessions that could be best soothed with a hot dog on a stick and turn in the chair at Brookstone. In fact, as the early aughts turned into the 2010s, shopping didn’t require going to a mall at all and so consumers, by and large, just stopped.

Which was a big problem for a chain which had evolved almost entirely to be perfectly tailored to the ecosystem of the indoor mini-malls of the ’80s and ’90s. As the malls started to die off, the Brookstones they contained started to die of with them — and by 2014, the once universally recognizable brand for high end/high concept retail gadgets filed for bankruptcy.

But while for many brands Chapter 11 is where the story ends, for Brookstone it was more the end of Act I, with the big twist before the intermission being the purchase of the ailing chain for $174 million by a Chinese conglomerate: Chinese conglomerate Sailing Innovation US.

Now, we are 18 months into Act II and Brookstone is both the same firm — they are still the nation’s go-to source for tiny robots that will carry for you — and a very different business that is modifying what it offers, how it tailors its products and where they are looking for their future.

Beyond The Massage Chair

About a year after its purchase, the retail world got its first glimpse of Brookstone’s new path with the announcement of Brookstone Launch — a product development program designed to make it easier for inventors, startup incubators, crowdfunders and other companies to get themselves onto Brookstone’s radar, and potentially to get their products onto Brookstone’s shelves.

“We are certainly not the only company that has announced a program for innovator development in the last year,” a spokesman noted. “But what we offer those groups is access to Brookstone product development, manufacturing, marketing and retail resources.We’ve been launching new inventions for decades. Apart from logistics and retail exposure – our customer base are the kind of early adopters that innovators most needs access to.”

The program has two focuses. One is on the customer, and making sure their product offering is actually the most cutting edge in consumer lifestyle products.

The partner side the program is designed to shorten the time to market for new products and technologies, largely through an idea that the Brookstone Launch program can fill in the holes young businesses often fall into between successfully prototyping a product — and then actually manufacturing and selling it.  

“There’s a huge gap between having an idea that people love and bringing that product to market. The advantage of working with Brookstone is that we can fill in any gap you have in your organization — from design and manufacturing to retail sales and customer service,” Brookstone Chief Innovation Officer Lauren van Heerden noted.

Apart from manufacturing and retails sales, products accepted into the Brookstone Launch program also receive end-to-end design and engineering, product packaging, U.S. and international compliance testing and eCommerce services.

“With the rise of crowdfunding,” van Heerden noted, “there are I think ever more inventors with great ideas, who suddenly realize they know how to set up a website — but don’t know how to organize shipping logistics. Or how to lower their manufacturing costs so they don’t have to charge $1,000 per units. How many great products do we see on sites that take preorders that just never make it to customers’ hands? Our development project is designed to make sure the really great ideas don’t disappear into the ether in that stage between working concept and working sales organization.”

Rethinking Consumer Need

With malls dying, being the retail brand best and most symbiotically tied to malls is obviously a business strategy with some limits. Brookstone isn’t getting out of malls. However, part of reinventing Brookstone’s retail strategy has been, in some sense, to relocate and redefine it some. Which has meant that the chain’s natural habitat has shifted some in the decade to airports — where their focus in less on massage chairs and more for the kind of consumer electronics that are portable enough to get on a plane with a consumer who realized in the baggage terminal that they left their iPad at home.

However, it has also meant changing the product they offer as well, as the new launch of the Carry On concept store in Utah earlier this week attests to.

“Whether you’re traveling for business, pleasure or adventure, Carry On by Brookstone has smart, innovative items to make your trip more successful,” said Brookstone CEO Tom Via.

“The clothing you find will be packable and travel-friendly. It will also be on-trend and weather-smart. For instance, one of our featured apparel lines, ExOfficio, can literally be folded into a tiny ball and remain wrinkle free, stylish and low maintenance — now that makes travel easier. Our luggage, packs and wallets are simply beautiful, and aren’t readily available at most airport retailers. Our goal is to make Carry On an easy and exciting stop with an element of surprise for every traveler’s journey.”

Carry On is a pilot program (no pun intended). If the model catches on, Brookstone says it might consider reformatting some current Brookstone locations away from the “classic” design and more toward the Carry On concept.

The Next Frontier

Unsurprising perhaps — given who the firm’s new owners are — Brookstone is also one of many U.S. retail brands eyeing expansion into the Chinese marketplace. The chain’s mainland China location opened in Nanjing on New Year’s Day, and further openings are planned throughout 2016.

“In China we’re thinking of aggressively expanding based on proof-of-concept,” Via told Quartz. “This year’s plan is dependent on the availability of real estate. … It could be up to 30 stores.”

And while a year ago a big push into the world’s fastest developing economy seemed like a good bet, with one of the world’s more commercially enthused middle classes, these days that strategy looks quite a bit riskier for a firm battling back from the edge of bankruptcy.

Weakness in the Chinese stock prices, combined with weak oil, have kicked off a multi-week roller coaster ride to kick off 2016. Many analysts are concerned that the Chinese economy is headed for a cool-off, and that it’s likely the chill will be felt acutely by American firms that have made big bets on a China-dominated future. Whether Brookstone will find a way to catch fire in China or will face cool reception due to a spectacularly poorly timed entrance remains to be seen.

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