Back in the 1890s, Marshall Field’s in Chicago, Ill., was at the forefront of something new – mixing retail and dining at a single location. Here in the 2020s, are we entering a new golden age of the retail café?
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WBBM Newsradio’s Rob Hart noted this week on the Noon Business Hour that there seem to be more of these cafés than ever. They ate at trendy retailers like Uniqlo and Coach and even pop up as the Target Starbucks, Walmart Burger King locations and the Costco food court.
Those might not be as fancy as Marshall Field’s Walnut Room (described as the first restaurant in a department store by Macy’s, its current owner) or the RL Restaurant at Ralph Lauren in Chicago, but they are part of a retail-dining trend. R.J. Hottovy, head of analytical research at Palo Alto–based foot traffic analysis firm Placer AI joined Hart this week to talk about it.
“I think that Marshall Field is probably ahead of their time on this,” he said. Hottovy added that his firm is “seeing a number of retailers and brands putting cafés in their locations.”
One benefit of the dining option nestled in a retail space include keeping people in that space longer, looking at all the things they could buy.
“I think it extends much more beyond that,” said Hottovy. “I think there’s certainly that elevating the brand and, you know, what we’ve seen in the last decade or so… is it’s really hard to have kind of an online only or offline only presence. You really need to have kind of a blend of things both in-store and digital.”
With that, stores have to find ways to get people through their doors instead of shopping from their couch. Hottovy said food is a great way to elevate the in-store experience and create positive brand.
“We’re also seeing a lot demand for a third or second place, if you will, if you work from your home or office, people are looking for spaces to congregate, get together, looking for new options on that front,” he explained. “And I think, certainly, that’s also driving force behind this.”
Do retail cafés actually move the needle? As the Walnut Room’s long history indicates, Hottovy says the data indicates that they do.
“What we’ve seen with our data is it does drive repeat visits, it drives incremental visitors,” he told Hart. “It extends the dwell time that people are in the stores and when you have extended dwell time, as you pointed out, it generally does lead to higher sales or greater transactions. So, I think this is a moment we’re going to get to see more and more of.”