A Lemon Bar With That Jeans Purchase?

I love this article from Bloomberg BusinessWeek about the rise of the retailer-restaurant. It talks about how shopping stores from Urban Outfitters to JCPenney are adding cocktails, espresso bars, and other foodservice outlets to their storefronts.

Source: Creative Commons

Source: Creative Commons

Having covered the foodservice industry for the past couple years, before coming to NYU, I actually think that from the business’s perspective, this move is great. Malls have food courts, which are often crowded and bustling no matter the time. So why not create a mini-food court of your own, in your store?

As a consumer, this scares me a litte. Mostly because I think it will work. I know how much I love getting a bubble tea or frozen yogurt at the mall to walk around with, and the more stores that include yummy options like these in their stores, the more tempted I will be.

One of the last articles I wrote before I left QSR magazine and moved to New York was about Macy’s opening its first co-location with Pinkberry. I spoke to Pinkberry CEO Ron Graves and Macy’s director of brand operations, Chris Burr. They both concurred that their brands fit well together; the Macy’s shopper is also likely already a Pinkberry consumer, too. Thus, fans of both brands are already familiar with the other company, and if they’re only familiar with one, they’ll have a wide open opportunity to try the other.

This harkens back to the power of co-branding, which I talked about in my very first blog post(!) when I discussed the potency of Taco Bell and the Doritos Locos Taco. Co-branding associates two distinct brands at once, and if it works well, consumers remember not just one but two brand names at the end of the experience. Any fan of Taco Bell also knows the Doritos Locos Taco. A fan of Harry Potter may associate Universal Studios with the enterprise. Universal is owned by NBC, which has little link to Harry Potter otherwise, but its theme park broadens its fan base. And so on.

One downside to this new trend is that consumers allow retailers to dictate which foods we eat and make our dietary assumptions for us. Not wholly, of course; we can always exit the store. But their plan is to keep us in there for as long as possible, and if a store ever opened a taco window in its clothing or shoe department, I’d be hard pressed to say no.

Tourists Still Spend Big Bucks in NYC

Ronan Healy travels to New York with an empty bag.

“Clothes are much cheaper here,” said the Ireland native while wandering the East Village on a recent Wednesday. “So I basically come over here with an empty suitcase, just fill the thing up, and fly back to Ireland.”

For many tourists, New York is a shopping Mecca where daily purchase is equivalent to daily prayer. Visitors flock to stores with inexpensive retail and extensive selection, much to the delight of storeowners who depend on tourism to stay solvent.

In 2011, the city played host to 50.9 million visitors who spent $34.2 billion, according to figures from NYC & Company, the city’s marketing and tourism organization. Statistics show that visitor spending increases nearly $3 billion annually.

Of those visitors, 10.9 million were international tourists, and nearly one third were Euro users, according to NYC & Company. The Euro exchanged at a rate of 1 Euro to $1.29 U.S. dollars, as of Sept 24.

“It’s at least one and a half times more expensive [in Ireland],” Healy explained. “What is 100 Euros, here you get it for 50 bucks. They’re just adding on the prices themselves; it’s not that it actually costs that much, it’s just the stores are really expensive. There’s way more selection here.”

Like a seasoned bargain hunter, Healy has an intricate strategy for New York expenditures. He flashes his European passport to score 10 percent off purchases at Macy’s. If he feels adventurous, he travels to Macy’s in New Jersey, where the lower tax rate and passport deal shave even more from his bill.

Tourist spending such as Healy’s generated more than 310,000 jobs for the city in 2010, according to NYC & Company.

Joe Barbosa is one proprietor who relies on tourism to keep sales up. He makes his living selling records in St. Mark’s Place, and attributes more than half his sales to tourists. “I believe they spend more money than locals when they’re in town,” he said.

ImageAcross the street from Barbosa is a rock ‘n roll clothing shop named Trash & Vaudeville. Clothing racks boast tight, leopard print pants, skinny jeans with more holes than Swiss cheese, and lacy black vests.

Jimmy Webb, buyer and manager of the store, said the store sees equal numbers of locals and tourists.

He said tourists are particularly drawn to shopping in the city because of its reputation. “It’s this amazing, wonderful island packed with a diversity of people and lifestyles. Everyone wants to go to New York City.”

As Healy shopped, he tried to capture NYC’s character with his purchases.

“I come here and buy 10 or 12 baseball hats,” he said. “I give them to my family as presents, because people want some kind of Americana-covered stuff. In Old Navy—we don’t have an Old Navy in Ireland—it’s quite inexpensive, so we bring that home and they go, ‘Wow, that’s really cool!’ You know what I mean? Anything with a different label that you wouldn’t get in my country.”

He leaves New York with a stuffed suitcase.