Strategically designed partnerships can create a revenue-enhancing synergy that boosts loyalty and devotion for the participating brands. In this ongoing series, The Lacek Group’s Amy Farsht, our loyalty partnerships practice lead, spotlights examples of brands that are capturing our attention, exploring new approaches, and shattering expectations.
In today’s competitive retail landscape, simply having a loyalty program isn’t enough to cut through the noise and capture the attention of discerning consumers. According to one recent survey, 63% of respondents said they base their purchases on the loyalty programs they’re in. Even still, retailers are facing increasing pressure to differentiate themselves and create more meaningful connections with their target consumers. Customers crave more than just discounts; they seek personalized interactions, engaging experiences, and a sense of community that motivates action.
The shop-in-shop model—where brands build a defined area within the retail space of another brand—isn’t a new idea. As early as 1997, Apple’s partnership with CompUSA demonstrated the power of dedicated spaces within existing retail environments. Today, shop-in-shop partnerships are increasingly integrating loyalty programs into their core value proposition.
The retail landscape has absorbed and adjusted to intense new pressures in recent years, and the COVID-19 pandemic further accelerated the changes. Expanded online shopping, direct sales, and umbrella e-commerce sites (e.g., Amazon, Shopify, and Etsy) allow consumers who can’t or don’t want to shop in stores to access most goods from the comfort of home.
While physical locations still account for 83% of U.S. retail sales, they’ve seen just 1.2% yearly growth, versus 8.2% annual growth for e-commerce. Thoughtfully developed shop-in-shop partnerships offer a way to enhance the in-store experience, drawing in customers to physical locations—encouraging reciprocal brand discovery, spurring product experimentation, and opening the door to long-lasting loyalty.
Store-in-store installations allow brands to extend outside the bounds of traditional marquee locations while exploring additional customer engagement methods. This mutually beneficial approach allows a host retailer to enhance its in-store experience with unique offerings aimed at attracting new customers and deepening engagement with existing ones. Meanwhile, the partner brand gains access to a wider audience—which can drive product discovery and, ultimately, nurture long-term loyalty and increase customer lifetime value.
The shop-in-shop model is being adopted across a wide spectrum of retailers—from established partners to surprising new pairings:
By strategically integrating complementary brands in a shared physical space, shop-in-shop partnerships create unique, engaging experiences that go beyond traditional retail. These curated environments let customers explore new products and brands, participate in interactive experiences, and discover product features and benefits. The collaborations often provide a new convenience for shoppers while also fostering the thrill of discovery by transforming the shopping journey into something more memorable—and, potentially, more meaningful.
Successful partnerships hinge on finding the right partner—one aligned with your business aspirations. Start by defining your goals and articulating what partnership success looks like for your brand. Then consider how a potential partner can help you achieve those goals, whether through data sharing, loyalty program acquisition, enhanced member benefits, or other collaborative opportunities.
With proper planning and strategic collaboration, a shop-in-shop experience can benefit both brands by boosting engagement and driving sales. Customers enjoy a seamless experience, discover new products, and often accelerate their loyalty rewards, fueling lasting brand devotion.
Amy Farsht is senior director, Partnership Marketing at The Lacek Group. For more than 30 years, The Lacek Group has been perfecting the art and algorithms of brand devotion. We help world-class brands identify their highest-potential customers, engage them across channels throughout their lifecycles, personalize each relationship for optimal long-term results, and measure the true effectiveness of those efforts. The Lacek Group is an Ogilvy company.