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Urban Outfitters’ Lifestyle Stores Boost Online Sales

When online costume jeweler BaubleBar announced in June that it would be making its offline debut at the Roosevelt Field mall in Garden City, New York, it was yet another confirmation that brick-and-mortar still matters. This, in a nutshell, sums up why hipster haven Urban Outfitters plans to open four new locations in North America this year—despite its e-commerce and catalog sales outperforming its physical stores.

Speaking to analysts during a fourth-quarter earnings call in March, Urban Outfitters Group CEO Tedford Marlow said he believed investing in such brick-and-mortar experiences as Brooklyn’s Space Ninety 8 (an indie-minded concept store) and the 57,000-square-foot flagship in Manhattan’s Herald Square (featuring a hair salon and a coffee shop) was the ticket to improving sales.

“Although each of these projects has called upon our creative strengths and business prowess, our overarching goal has been to reestablish positive sales momentum in the business,” Marlow said at the time.

So far, so good: Sales at Urban Outfitters—though still dominated by online transactions—increased by 6.5 percent in the first quarter of fiscal 2016. By all accounts, it looks like concentrating on “experience retail” that emphasizes lifestyle vignettes instead of overwhelming racks of vintage-looking threads can increase foot traffic in-store and subsequently boost sales online.

“The store is a physical location in which you have an opportunity to create a community of happy, surprised and delighted brand citizens if you offer them an experience that they value and appreciate,” Adrian Weidmann, founder of design and analytics agency StoreStream Metrics, said recently in an online discussion among RetailWire’s BrainTrust panel of industry insiders about how Urban Outfitters’ offline presence supports its e-commerce channel.

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Motivational speaker Ian Percy noted, “The mistake we continue to make, because it’s how most of us were trained, is we keep trying to fix individual parts. From all appearances, Urban Outfitters is the poster child for how to do it right.”

“Listen, observe and respect your shoppers first, then create and activate solutions that they value,” Weidmann continued. “All too often solutions are implemented that are merely tactile and cool implementations in desperate search of a meaningful strategy.”

Ryan Matthews, founder and CEO of Black Monk Consulting, put it another way. “Urban Outfitters isn’t offering us anything new except for its interpretation of a classic retailing theme: adapt to your environment, know your customer, give her or him what they want the way they want it,” he said, adding, “The separation between digital and physical retailing is in the heads of retailers, not their customers, and the sooner everyone learns that, the more successful everyone will be.”