Grocery and Food

Can Food Save American Retailing?

RR Restaurant in Retail storeLast time I checked with the boys in Siliconland, you still couldn’t go out to eat online.

We’re not talking about Grubhubbing it to your front door or an Uberlicious special. This is about the idea of going someplace – maybe with others, maybe not – and having an eating experience that can’t be duplicated at home.

This country’s first true sophisticated retailers – the department stores of the late 19th and early 20th centuries – realized this and almost always included a featured restaurant in their downtown flagships.

Is there any girl (and some boys, too) who grew up in New York and doesn’t have fond memories of their mother taking them to Charleston Gardens at B. Altman? Or any of the tearooms/restaurants in the venerable old department stores in the Midwest where lunch with mom included informal modeling?

Those first merchants of retailing knew what today’s generation is having to relearn: that retail stores are more than a place to buy stuff. They are the centerpieces of communities, focal points where people gathered for special occasions, to mark moments in their lives and to celebrate. And oh, while they were doing all of that, maybe they bought a new shirt or a frying pan.

And all of this focus on food wasn’t just about snaring the customer into the store. They were often profit centers onto themselves, another way to wring a few more bucks out of the investment that was the giant downtown flagship store.

Food service continued as an integral – albeit less important — part of the American retailing scene ever since, but more recently it’s become as much about accommodation as destination at most stores. (How else to explain all those dreadful Little Caesar’s at Kmart…but I digress.) Now, however, we’re starting to see a new breed of retailers – as well as some of the old guard – begin to reestablish the role of restaurants within their physical stores as a way not just to feed their customers but to exploit that magical, perhaps mythical element of their experiential strategy.

The most recent convert has been Urban Outfitters which announced a few months ago it was buying up a small cult pizza brand from its hometown Philadelphia with the intent of expanding it into its existing and new stores. This comes as RH – you may still know them as Restoration Hardware – has opened a café and a bar in its new Chicago store with plans to replicate it in other new locations going forward.

In the meantime, Macy’s now operates a quite lovely – and usually very busy – restaurant called Stella at its New York flagship, complete with a view overlooking Herald Square. Forget the fact that you have to walk through the bedding department to get to this somewhat parallel reality on the sixth floor. And let’s not forget that Starbucks is downright ubiquitous throughout American retailing and stores like Bloomingdale’s have been including restaurants in their locations for years.

None of all this new activity is coincidental – or accidental. Retailers are desperately trying to figure out how to get shoppers off their smartphones and back into their stores. Omnichannel is as much about keeping physical stores in the shopping equation as it is about convenience for customers. Big flagships like the H&M Herald Square store, Bass Pro Shops in the Pyramid in Memphis, Neiman Marcus at University Town Center in Sarasota and all those condo-sized RH locations are offering shoppers a destination that isn’t arrived at with a couple of clicks.

And that’s the formula physical retailers must figure out if they are to stay in business…much less thrive. Yet another one-day sale or 25-off-coupon is just not going to cut it anymore. Stores have to rework their merchandising recipe to bring in all kinds of elements – not just restaurants, but services, events and even non-traditional product categories.

There is no small irony in the fact that retailers of the 21st century continue to look to their ancestors of the 19th for inspiration. In the dumbing down of American retailing that we saw through most of the back half of the last century so much got lost and discarded. Now, in the their desperate attempt at reinvention, they are going back to what got them started in the first place.

This new generation of in-store restaurants and food offerings from retailers are part of this plan. On their own, they may not be enough to get the job done. But as part of a bigger strategy they may just be one more piece of the pie.

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