Identifying the Emergence and

Strategic Significance of

Third Space within Fashion

Retail

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Karinna Nobbs & Veronica Manlow

Contents1. Introduction2. Definition &

Background3. Form & Function of

3rd Space4. Methodology5. Results6. Summary7. References8. Case Study9. Discussion Points

1. Introduction• Evolution of the primary

motivation of fashion consumption

• Postmodern consumer society• New points of differentiation

required• Experience Economy (Pine &

Gilmore 1999, Holbrook and Hirschman 1982, Schmitt, 1999)

• Down-sizing due to growth of e-commerce (WWD 2012)

• Impact of ‘showrooming’• Merging of retail and leisure

“All department stores will becomemuseums, and all museums will becomedepartment stores” Andy Warhol

2. Third Space – What is it?

• “Somewhere which is not work or home but a comfortable space to browse, relax and meet people, even enjoy a meal” (Mikunda 2004:11)

• “A space which is only partly about shopping” (WPP 2010)

• Also known as “Third Place”• Emphasis on socialisation,

interaction and community• Concept requires further clarification• Aim to explore the form and function

of 3rd Space within the Luxury fashion flagship Stores

2. Third Space - Background

• 3rd Space is not new but within fashion it has been growing since 2008

• Oldenburg (1989) spoke of the traditional presence of neutral third places in communities

• Places where individuals could gather, exchange ideas and socialize

• Gap for commercial spaces which fill the void created by the erosion of these social spaces

• Shops and shopping centers now take the place of traditional communal meeting points (town squares, churches, barber shops, bars, grocery stores, restaurants)

3. Third Space – Characteristics of Form

• Socialisation, entertainment and the enactment of self takes place in new branded spaces

• Supermarkets featuring cooking classes and wine tastings to “stitch and bitch” sessions and customisation services in clothing stores (WGSN 2013)

• Oldenburg (1989) suggests that they should be: free/inexpensive, involve food/drink, be highly accessible, involve regular community and are welcoming/comfortable

• Trend is particularly evident within the luxury fashion sector

3. Third Space – Characteristics of Form

• Consumers are increasingly interested in experiences which are: – Unique– Personalised– Entertaining– Relevant– Authentic

• Not large spaces• Form of added value often

promoted via social media and word of mouth (The Future Lab 2013)

3. Forms of Third Space

• Open space – lounge/rest areas, gardens

• Closed Spaces – VIP Rooms, private suites

• Space for games/sport• Space for art & culture• Space for company artefacts –

heritage/museum• Cafes and Restaurants• Spa/Grooming services• Space for education• Space for technology• Adaptable space• Temporary Space• Mobile space disembodied from store

(i.e. pop ups)

3. Function of Third Spaces

• Third spaces are “being spaces” that offer a refuge from conventional commerciality

• Increase dwell time and create an emotional connection

• Non traditional retail space – strategic purpose

• Branded places that transcend the static commercial experience with hybrid spaces that speak to a deeper commitment to a more flexible, adaptable and experiential business model (WWD 2013)

• i.e. art moves from occupying a space on the wall to up front and center stage

3. Function of Third Space

• Diffusion of point of attention and intention

• Focus is shifted from brand as icon to brand as omnipresent

• Co-creation of value• Total branded experience

allows brand to be decentered• Attention shifts to self, others,

screens, installations, performance art, activities

• However all points should lead indirectly back to the brand

3. Functions of third space

• Emotionally engaging place– Competes against e-

commerce• Creates deeper dialogue with

brand through emotional, sensory connection

• Destination location for an international audience

• Attract stakeholders attention• PR exercise• Integrates the brand values• Communicates brand

personality and positioning

4. Methodology • Carnegie Trust Research Grant• Exploratory, Inductive, Qualitative• Observation (Quota/Purposive)• Key Informant Interviews (Convenience)• 2 Phases:• Phase 1 – National, (2 key locations, 87 in total, 12 in-depth

elite interviews)• Phase 2 - International

– Paris, New York, Tokyo, Milan, Hong Kong, Moscow, Seoul, (2 key locations, 527 in total)

– Flagship Store Managers/Brand Representatives (3 interviews per city, 22 in total

• Thematic/Content Analysis

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5. Results: FormOBSERVATION:• Around 57% of the stores

utilised an aspect of third space/place (Tokyo, Milan, New York)

1. Lounging/rest area

2. A space for art/Culture

3. An area displaying/curating the brand’s heritage

4. Private area/VIP Suite

5. A Cafe/Bar

5. Results: Form – Conceptual Model

5. Results: FormINTERVIEWS• Very few brand representatives were

familiar with the term

• However they understood the concept very well and said it was an area of investment going forward despite difficult trading conditions

• “This concept is not new but it certainly reflects some of the marketing strategies we are about to introduce” (Italian Luxury Brand)

• The manipulation of technology within 3rd space will increase

5. Results: Function

• “To stand out from competitors” (American Luxury Brand)

• “To excite customers and get them to stay longer...and hopefully buy more” (British Luxury Brand)

• “To build an emotional connection with the brand” (French Luxury Brand)

5. Results: Function

• “As a signifier of lifestyle” (Italian Luxury Brand)

• “To act as a further point of communication for the designer’s values and philosophy” (American Luxury Brand)

• “To showcase how flexible the brand can be” (British Luxury Brand)

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and management academic discipline• The forms of 3rd Space relate to access,

time, culture, leisure and education• The function of 3rd Space is linked to the

notion of community and emotional engagement, co-creation of value, differentiation and positioning

• Future research aims to quantitatively test the model of third space

7. References• Anderson, S, Nobbs, K, Wigley, S and Larson, E (2010) ‘The Motives and Methods of

Fashion Designer and Architect Collaborations’ Journal of Media Arts Culture, Vol 8. No.2 pp 1-11.

• Allegra Strategies (2005) ‘Project Flagship: Flagship Stores in the UK’ January 2005, Allegra Strategies Limited: London

• Barreneche, R, A. (2005) ‘New Retail’. Phaidon Press: London• Kozients, R.V.,Sherry, J, F, DeBerry-Spence, Duhachek, A, Nuttavuthisit, K, Storm, D.

(2002) ’Themed flagship brand stores in the new millenium’. Journal of Retailing, Vol. 78.,pp17-29.

• Moore, C & Docherty, A (2007) ‘The International flagship stores of luxury fashion retailers’ Fashion Marketing: Contemporary Issues (Hines & Bruce)

• Oldenburg, Ray (1989). The Great Good Place: Cafes, Coffee Shops, Community Centers, Beauty Parlors, General Stores, Bars, Hangouts, and How They Get You Through the Day. New York: Paragon House

• Reynolds, J. Howard, E, Cuthbertson, C, Hristov, L (2007) ‘ Perspectives on retail format innovation: relating theory and practice’. International Journal of Retail & Distribution Management; Volume: 35 Issue: 8. pp 647-660.

• Tungate, M (2009) ‘Luxury World: The past, Present, and Future of Luxury Brands’ Kogan page: London.

8. Case Study: Hermes

• Hermés’ three level deep flagship is built in the former Lutetia Hotel’s indoor swimming pool in Paris’s left bank

• The first level features a florist, book store and tea salon

• Tall lattice wood huts separate space which are multi purpose

• The ‘Festival des Mètiers’ is an event where customers can engage with artisans at work

http://www.youtube.com/watch?v=QQzG6NXGffo

9. Future Research & Discussion

• How does this concept transfer within an online environment?

• Is it relevant for all sectors of the fashion industry (Mid-market and Value)?

• Is the concept culturally sensitive?• How can the strategic impact and effectiveness of

3rd Space be measured?• How should the commitment of 3rd Space and

commercial space be planned?