How brands like Swarovski & Fleet Feet are using data to expand their store fleets

“We do want to position our stores where people are running and near running routes. We will actually look at Strava, and that information can be really helpful as well,” Werder said.

Werder was among the speakers at the Future Stores conference held in Los Angeles this week, where many brands came to discuss growing their retail footprints. Topics included strategies for plotting new locations, in-store design and understanding market opportunities. But for many direct-to-consumer brands, growing a physical footprint requires a careful review of where their customers are already shopping or engaging with their products.

Modern Retail spoke with several expert retailers at Future Stores on how they’re approaching retail expansions.

Courtney Hawkins, svp of global retail at fine jewelry brand Mejuri, said one challenge the brand has faced in scaling stores is picking which specific markets to focus on. “You’re not short on where you want to go,” she said. “But you are looking at what makes the most sequencing sense in order to build the brand. And is there real estate available where you want to go?”

From there, picking the exact location means looking at where people are already shopping or likely to pass by. For e-commerce brands like Mejuri, the location selection strategy often involves looking at e-commerce sales data like revenue or growth in certain markets. Hawkins said lifestyle centers and upscale shopping malls are a good fit for the brand. So do outdoor neighborhood-style outdoor shopping districts. Mejuri currently has 33 stores, with recent grand openings in places like Denver’s Cherry Creek Shopping Center, The Mall at Short Hills in New Jersey, and the Stanford Shopping Center in Palo Alto. The next opening is planned for South Coast Plaza in Orange County, a privately owned shopping destination.

Chad Lundeen, vp of real estate at mattress brand Saatva, said that entering hot markets requires a certain degree of patience — or flexibility. The competition is fierce, and some landlords are going to want to make sure they are familiar with the brand before signing the lease. When the company wanted to be in University Village, a shopping destination in Seattle, Lundeen said there wasn’t a spot available. But it did find a location right across the street — and at a lower rent.

“In the early days of brand building, you want to be seen,” he said.

Stephen Hekman, evp at retail consultancy firm Kingsmen Projects, said direct-to-consumer brands hoping to expand into physical retail may often look at the most popular 25 to 50 properties in the country. These large properties are often in major metros or shopping designations, like Roosevelt Field in Uniondale, New York or Orlando’s Florida Mall. “You go in there and you’re guaranteed a certain amount of business,” he said.

But space is at a premium there and it can be competitive to get in. He worked with men’s apparel brand Psycho Bunny in 2021 when it sought to expand to Orange County’s South Coast Plaza. Instead of signing a lease right away, it decided to launch a temporary pop-up to show it could generate traffic and revenue. By the first half of 2022, it had a permanent store in the California retail complex.

Looking at co-tenants in a property is another key indicator for brands looking to expand. Jochen Schmidt, former vp of development of distribution and real estate at Swarovski, said that the company looks at what jewelry competitors are in the area as it seeks to corner the “affordable luxury” market. “It gives you an indication of what type of customer is shopping on that street,” he said. 

Once the brand decides on a market, Schmidt said the strategies needed to secure leases are different depending on what country they’re operating in. In North America, spaces are available and landlords are willing to discuss terms and conditions. That’s especially true for the bigger lifestyle center where Swarovski is successful, Schmidt said. But in some Asian markets, particularly China, brands might pay a minimum lease as well as a percentage of revenue as part of their deal. “If you don’t perform they kick you out. If you perform, they love you,” he said.

There have been cases, Schmidt said, where Swarovski didn’t hit the required sales volume. In one case, the summer collection didn’t resonate at a retail location in China and the company decided to pull out. There’s also competition from locally-owned brands, he said. But the development of cutting-edge shopping malls in China is continuing, and Schmidt said the opportunities are “top-notch” for brands that are able to get in.

“It’s pretty much the same across the globe,” he said. “If you have the right product, and the right marketing campaigns with it, it works for the consumer.”