On Monday, Samsung opened a new 40,000-square-foot store in New York’s Meatpacking District. Across the street from the High Line and a block away from the Whitney Museum of American Art, it’s a prime piece of retail space. But one pursuit "the flagship" is not focused on, says Zach Overton, its general manager, is retail.
Yes, you read that right: Samsung has opened a giant store that does not sell Samsung devices.
Instead of endless product shelves, the space, which is named for its address, 837, features a three-story digital screen composed of 96 of Samsung's 55-inch visual displays; a 90-seat theater; a portable demo kitchen; an art gallery; a multimedia studio; and a café. In it, Samsung will host events like film screenings, book launches, DJ sets, and, already on the schedule, an Oscars viewing party for Galaxy owners. "We didn’t want it to be a store," Overton says. "We didn’t want it to be about pushing products in people’s faces." Instead, he calls the building an "immersive cultural center."
There may not be any device inventory at Samsung 837, but there are still plenty of opportunities to purchase Samsung products. Store staff will be on hand to guide customers through the digital purchasing experience, should they happen to, say, be trying out a Samsung Gear in the "VR Tunnel" and realize they want one. And there’s a floor-to-ceiling interactive touch screen for "exploring" Samsung appliances.
Whatever the company calls it, Samsung 837 is a store of sorts. It's just a new type of store—one that aims to better meet customer needs at a time when, Overton says, "e-commerce is huge" and "people know they can purchase anything on their devices."
The percentage of purchases consumers make in physical stores is steadily decreasing. But even as physical stores handle fewer transactions, they remain important to brands (so important that even e-commerce companies like Warby Parker and Amazon have expanded to brick-and-mortar locations). Physical stores introduce people to new products, allow people to try before they buy, and help create relationships with customers. As shopping online becomes more convenient, retailers have found new ways to get customers into stores. H&M and Target have attempted to spark foot traffic in their retail spaces by offering limited-edition clothing lines from famous designers. Walgreens holds prescriptions hostage at the back of the store, forcing its non-drive-through customers to walk through aisles of holiday-themed candy and packaged foods in order to pick them up. Nike has marketed its stores as athlete oases. Apple turned its stores into customer service centers.
Though Samsung is hijacking the customer service angle (onsite technicians will help troubleshoot tech problems à la Apple Genius Bar), Samsung 837 more closely aligns with the 535,000-square-foot experience center in Memphis that was built by Bass Pro, an outdoor sporting goods company. Complete with a bowling alley, an alligator swamp, and a hotel, the pyramid-shaped palace places the focus on entertaining customers. "People try the product and have an experience that brings it to life," Paul Martin, the managing director of consultancy KPMG Boxwood, told the Financial Times. "The conversion rates [the number of visitors who buy something] with this in-store experience are much higher, and shoppers’ basket sizes are also a lot bigger."
Samsung 837 effectively places Samsung products at the heart of passions like cooking, film, art, music, and fitness (every art exhibit, for instance, will include Samsung devices). And it allows customers to do the number-one thing that they say they like to do in brick-and-mortar stores, which is try out products. "People go to a retail store to see, touch, and feel," Byron Carlock, the head of PwC’s real estate practice in the U.S., said in a report about the future of retail. "It’s a place to buy, a place to stimulate, and a place to create new possibilities in the eyes of the shopper."
Samsung 837 closely adheres to every white paper about how to maximize a physical storefront in the digital age. But it's an experiment. When its doors open to the public at 7 p.m., the question is whether they will want to hang out in a Samsung theme park.
I’m so curious to see how people react to this, I tell Overton.
He smiles. "As are we," he says.