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: Form

INTERVIEWS

• 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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• Emerging research area within the business 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?