Flagship Stores and Research Motivation

Owned and operated by the focal brand, flagship stores can be characterized as brand biotopes (Kozinets et al. 2002; Manlow and Nobbs 2013; Moore, Doherty, and Doyle 2010). Unlike traditional outlets, a flagship store’s primary strategic marketing goal is to entertain and educate consumers about the brand through its augmented brand display (Nierobisch et al.

2017). This display can include elements such as product offerings, history, brand value

display, or the delivery of special services rather than the sale of goods (Dolbec and Chebat 2013; Manlow and Nobbs 2013). In a business-to-business context or in the framework of an enterprise expanding to new markets, flagship stores are used to create awareness, facilitating business contacts by exhibiting the brand’s strength and gaining expertise that helps the brand to act successfully in the market (Doyle et al. 2008; Lopez and Fan 2009; Moore, Doherty, and Doyle 2010; Plazibat and Brajevic 2011). Another aspect distinguishing flagship stores from traditional outlets is their presence in metropolitan and expansive locations, as the architectural design, the cities’ stereotypes, and the surrounding brands enable synergies of awareness, image, and contact creation (Arrigo 2015; Jones and Doucet 2001). The American Marketing Association (2016b) adds that a flagship store “is large or dominant in relation to other company stores.”

Along these lines, flagship stores in the understanding of this thesis must offer an extraordinary augmented brand display through in-store attractions, storytelling, and entertainment, providing brand- and product-related information, exceptional assortment variety, and services that go beyond the offers in other brand-owned stores or traditional retailers. Visualizations of flagship stores can be found in Paper 1.

Although there exists a clear understanding of flagship stores and their marketing communication purpose for building strong brand experiences, major challenges remain:

1. Future research should assess whether investing in a flagship store is worthwhile for mundane brands and how to best design an augmented brand display to create an experiential, enjoyable store environment (Kozinets et al. 2002; Manlow and Nobbs 2013). In this regard, it remains unclear whether flagship stores of brands in the same industry sector function similarly and to what extent an in-store market adaption must be made for brands of different industry sectors, other than luxury fashion, furniture, or luxury home appliances (Dolbec and Chebat 2013; Keßler, Ney, and Zentes 2014).

2. The learning process of consumers within experiential stores should be gauged (Dion and Arnould 2011). Flagship stores ideally represent the peak of experiential consumption of a brand, lasting with great intensity over time (Dolbec and Chebat 2013). However, the process of creating peak experiences is dynamic, as previous brand experiencest shape future brand experiencest+1 (Verhoef et al. 2009). Therefore, one must take into account the power of previous brand experiences to affect the development of peak brand experiences in flagship stores as well as moderating influences, e.g., repeated store visits or pre-existing consumer-brand relationships (Dolbec and Chebat 2013; Joy et al. 2014).

3. Due to the immense operation costs, brands that operate experiential stores, such as flagship stores, cannot survive without sales at other brand touch points and retailers (Dion and Arnould 2011). It is therefore of great interest to identify the consumer’s future behavioral intentions toward the brand after engaging with an experiential store (Lemon and Verhoef 2016): Emphasis should be placed on the relationships with distribution partners. A substitution of revenue by flagship stores from the partner-owned brand touch points and retailers should be avoided (Doyle et al. 2008; Manlow and Nobbs 2013; Moore, Doherty, and Doyle 2010).

4. The success of flagship stores telling stories through composed mythotypes, delivering a brand’s ideology and values to build strong images and relationships in consumers’

minds, has been well documented (Borghini et al. 2009; Kozinets et al. 2002; Moore and Birtwistle 2004). However, several flagship stores have failed (BBC NEWS 2016;

Ejinsight 2016; Ryan 2016). While McGrath, Sherry, and Diamond (2013) were the first to explain such a failure, recounting the physically staged brand meaning of Mattel’s Barbie brand in the shut-down House of Barbie, the effect of in-store

attractions, stories, assortment, or service on diluting brand experience for consumers in experiential stores has not yet been examined or quantified.

5. Conducting a content analysis in the literature search engine EBSCOhost, applying the procedure as advised by Wiese et al. (2012) – except for restricting industries and research areas – it is clear that academic marketing literature and business periodicals increasingly emphasize the importance of brand experience and its synonymous derivatives (i.e., customer experience, product experience, or retail experience) for branding and retailing purposes (Lemon and Verhoef 2016). Figure 1 displays the number of publications for brand experience within the last 20 years. Evidently, a well-grounded understanding of brand experience in academic marketing literature and business periodicals has jointly evolved. Repeating the same analysis with respect to brand experience creation within experiential stores and its derivatives, academic marketing literature is deficient to business periodicals in identifying and analyzing drivers of experiential consumption and inherently its effects on brand perception, brand relationships, and consumer behavior on the experiential store level (i.e., flagship stores, pop-up stores, or brand museums). Despite the success of brands operating experiential stores – in particular flagship stores – the increasing attention of periodicals on flagship stores seen in Figure 1 indicates the need for a deeper investigation by academic marketing research that quantifies the underlying mechanisms, effectiveness, and consequences of flagship store operation (Dolbec and Chebat 2013; Joy et al. 2014; Keßler, Ney, and Zentes 2014). Consequently, this thesis also contributes to the yet limited number of articles that relate to brand experience creation within brand-owned experiential stores (Lemon and Verhoef 2016), enabling marketing research to test, understand, and further develop theory for an increasingly important topic to the discipline of business management and marketing.

Figure 1: Content analysis for brand experience and flagship store incl. synonymous derivatives.

100 2030 4050 60 7080 10090 110120 130 140150 160170 180190 200 210220 230240 250260 270 280290 300310

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Hits

Year

Yearly Scholarly Peer Reviewed Hits † Brand Experience Yearly Periodical Hits † Brand Experience Yearly Scholarly Peer Reviewed Hits ††Flagship Store Yearly Periodical Hits ††Flagship Store Note:

†: Search terms were brand experience, experience economy, retail experience, customer experience, service experience, product experience, experiential marketing, store experience, experiential retailing, experience marketing, and in-store marketing.

††: Search terms were flagship store, mono-brand store, experiential store, pop-up store, brand museum, brand cathedral, own brand store, exclusive store, and NOT store brand.