Shop in shop in supermarkets: practical advice for your brand

Shop in shop in supermarkets: best practices for your brand

Artur d'Achon
February 13, 2024 - 4 min reading

When we think of the shop-in-shop concept, we often think of department stores such as Galeries Lafayette, Fnac and Darty, which benefit from being part of the same group. However, this fast-growing trend is rapidly spreading to the world of mass retailing.

If your brand is looking to develop its market share or marketing strategy, you may be wondering about the ins and outs of shop-in-shop as applied to the physical retail environment. If so, you've come to the right place: this article explores the definition of shop-in-shop, its benefits for brands, the different ways in which it can be managed, and finally the key steps to implementing it successfully.

What is shop-in-shop?

A shop-in-shop - or brand corner - is a space specially dedicated to a brand within a store, in order to create a mini point-of-sale with the brand's image. It enables the personalization of a specific area, reflecting the brand's visual identity, in which its products or services are sold.

Shop-in-shop offers the possibility of setting up temporary stores to highlight specific events, such as promotions, product launches or seasonal rotations. In other cases, they can be set up on a long-term basis, reflecting the establishment of a long-term strategic partnership between two players who are often capital-independent.

What are the advantages of shop-in-shop for a brand?

By opting for shop-in-shop, brands can extend their reach to a wider audience by taking advantage of the benefits of a department store. For example, Easy cash, the leading second-hand buy-to-let network, already in collaboration with Cora, has announced its partnership with Auchan in 2022, to grow further by extending its network of commercial partners on this type of strategic operation.

example shop in shop easy cash
Credit: LSA Conso

Darty has also set up permanent shop-in-shops in selected Carrefour stores. A practice that enables the retail giant to arm itself against competition from e-commerce, but also from department stores.

example shop. in shop darty
Credit: Les Echos

For its part, Haribo is promoting its promotions through a similar scheme in Leclerc stores.

shop in shop haribo
Credit: Strada Marketing

The shop-in-shop concept offers brands the opportunity to leverage the visibility of the store in which it is installed. 

This is how Sushishop came to be deployed in most Leclerc hypermarkets.

shop in shop sushi shop
Credit : E.Leclerc Saint Pierre du Mont

What's more, this approach makes it possible to test new geographical areas or markets, while limiting the investment required to set up dedicated sales outlets.

Moreover, shop-in-shop gives the brand greater control over the way its products are presented, as in the case of La Laitière in Carrefour hypermarkets.

example shop in shop la laitière
Credit: Carrefour Ormesson

Finally, shop-in-shops enable strategic partnerships between strong brands. The opening of Lego France's first permanent corner shop in an FNAC store in December 2023 is a typical example.

shop in shop example lego x fnac
Credits FNAC / Lego

How are shop-in-shops managed?

These mini-sales outlets can be launched under various forms of partnership. This table shows the different aspects of collaboration.

Shop in shop managed by the Magasin Dedicated shop-in-shop Shop in shop in concession
Definition Boutique where everything is managed by the host store A store for which the agreements between the brand and the host store divide the powers and commitments of both parties. Tenant boutique in a department store. Ex: Lacoste at Galeries Lafayette
Brand autonomy Null Low or medium Strong
Offer Distributor-controlled Agreement between brand and distributor or brand-driven Piloted by the brand
Merchandising Distributor-controlled Brand/retailer or brand-driven agreement Brand-driven
Branding Distributor-controlled Brand/retailer or brand-driven agreement Brand-driven
Stock Distributor-controlled Distributor-bought or brand-driven Brand-driven
Staff Distributor staff Agreement between brand and distributor Brand staff
Caisse Managed by the distributor Managed by the distributor Managed by the

How do you set up a shop-in-shop in a supermarket?

If you're planning to deploy a strategy of this kind, there are a few essential steps you'll need to take.

Here are a few key ideas to incorporate into your strategy.

Choice of distributor / host store

To successfully integrate a shop-in-shop, the choice of host store is of crucial importance. It's imperative to select a store whose clientele is close to the one you're targeting. Another approach: if you're launching a product in a new customer segment, you can speed up promotion by placing it in a strategic outlet that already attracts this clientele.

Another sensitive point: it's essential to find out about the outlet's reputation. Social networks and Google reviews, for example, can be invaluable tools in this process. And for good reason: the reputation of the host store can have repercussions - positive or negative - on the perception of your own brand.

Finally, it's important to assess the openness of the host store's management to collaboration. This will facilitate the implementation of the shop-in-shop, and above all its improvement, which necessarily involves follow-up and regular exchanges.

Location selection

Contractual negotiations will have a considerable impact on the results of the operation: this goes beyond agreement on shop-in-shop design, point-of-sale advertising or communication media. Indeed, discussions with the distributor are important in determining the most strategic area to select.

As a general rule, the entrance to the store is the space used. In fact, this is where hypermarkets position their strategic, often theatrical promotions. So you have to do everything you can to capture this strategic space. And if this isn't possible, it's essential to carefully study how customers move around the store, to ensure maximum visibility for your products or services. Understanding the customer's path through the store is a key element to consider.

Inventory management

To maximize shop-in-shop efficiency, close collaboration with your distributor is essential. Together, you'll define procedures to monitor stock levels and minimize the risk of out-of-stocks or overstocks. 

At the same time, you will draw up a supply schedule based on sales forecasts. To this end, take into account not only planned promotional actions, but also the sales history observed in your other shop-in-shops at similar periods.

Setting objectives

In most cases, the aim of shop in shop is to enable you to drastically increase your market share in a store: by benefiting from a dedicated point of sale in place of your usual share of shelf space, you aim to cannibalize sales on one product, or on your entire product range.

If you think in terms of results rather than market share, make sure that the additional margin generated by your sales corner amortizes - and then pays for - the cost of deploying it. However, there may be an exception: if your brand is new to the market, a marketing operation that doesn't generate a profit margin can still be justified by a significant gain in brand awareness. Indeed, brand visibility is often a prerequisite for commercial success.

Shop-in-shop performance monitoring in the retail sector

Maintaining the performance of your supermarket sales corner requires close collaboration with the host brand or outlet. However, when it comes to monitoring performance, it's often the brand that has to go it alone, gathering internal information and taking in-store readings. What's more, these reports often have to be consolidated by cross-referencing sell-in and sell-out data.

The financial impact of the shop-in-shop must be assessed through sales analysis. This means calculating the return on investment (ROI).

In addition, your Area Managers will be required to make regular visits to the sales outlets concerned to ensure compliance with contractual agreements, particularly with regard to the layout of communication elements. This ensures that the quality of the sales offer is maintained at an optimum level, helping to ensure constant customer satisfaction.

If shop-in-shop is deployed in a store where your products were already distributed, a before/after comparison of sales levels can already be a good performance indicator. As always, checkouts are essential for analyzing sales at store level.

If, on the other hand, you're setting up a new outlet, i.e. one with which you have no history, take the time to define the right objectives, and specify the means of verifying results in the partnership contract.

Finally, the KPI's required for performance analysis vary according to the collaborative mode (see table above). The case of concessions is relatively straightforward: your own cash register statements provide the granularity of analysis required for reporting.

On the other hand, as soon as the cash register is managed by the distributor, you'll need to study the usual indicators for supermarket brands, such as the evolution of digital holdings (relative to the assortment present in the shop-in-shop). To do this, you'll need a mobile application that integrates shelf display.

Shop-in-shop is a win-win situation for both brand and retailer. The manufacturer benefits from the traffic of an existing point of sale and activates its strategy at a lower cost, while the retailer deploys new sales strategies that enable it to better resist the rise of e-commerce or department stores.

Knowing these strategic advantages, and the interest your distributors will have in following you in this approach, will enable you to boost your marketing in the field, and ultimately develop your supermarket sales. To do this, you'll need to prepare the partnership, define the collaboration with the outlet in detail, and make sure you can analyze the results with finesse!

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