Samsung’s new flagship isn’t a store

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Discussion
Feb 29, 2016
Tom Ryan

Samsung last week opened a 55,000 square foot, three-story “flagship of the future” in Manhattan. While an array of digital experiences are on display, tech writers seemed most surprised that shoppers can’t take any Samsung products home with them.

Named after its address in the hip Meatpacking district, Samsung 837 is described as a “living lab and digital playground” that enables consumers to test products and personally experience the Samsung brand. While having a support center like Apple’s Genius Bar and staff guiding shoppers to Samsung’s “online purchasing portal,” no cash registers are available.

“We didn’t want it to be a store,” Zach Overton, general manager of Samsung 837, told Fast Company. “We didn’t want it to be about pushing products in people’s faces.”

Instead, the store features:

Screen & Mainstage: Heralded as the world’s largest multimedia display, a giant digital screen made from 96 55-inch TV sets stands in front of a 90-seat stadium-style theater. Content will range from live streams and demos, panels and presentations, and screenings. A private Oscars viewing was held last night.

The Gallery: This space features regularly commissioned, technology-based art installations. The first installation, “Social Galaxy,” shows individuals’ Instagram feed as they walk through a mirror-filled tunnel.

VR Tunnel: In this area, customers can experience Samsung’s Gear VR technology with curated content that explores travel, sports and family, or special events like festivals, sports and music, and demonstrations.

Studio: A see-through cube structure serves as an interactive hosting space for radio and podcast curators, DJ sets, live recordings, celebrity interviews and more.

Other areas include the “Kitchen,” with chef demonstrations; a “Playroom” equipped with family-focused gadgets; and a “Living Room” of smart products — all backed by workshops and events. A B2B-support spot and cafe are also available.

“[What] we’ve created is a playground where people can connect with Samsung technology, with our products, with our services in an interactive and immersive way,” Marc Mathieu, chief marketing officer at Samsung Electronics, North America, told Adweek. “We believe that this is the way the store of the future ought to look like.”

Photo: Samsung

DISCUSSION QUESTIONS: What does Samsung gain from opening a flagship without POS terminals? Will showcase stores prove to be the best format for technology brands?

Braintrust
"Perhaps their view is the data about the shoppers/visitors is more interesting/useful for them in the long run than peddling gear which can be purchased online or from local resellers down the street."
"While touted as a a "playroom" or playground, the question is, will consumers come back? How many times do most people go to a museum per year? The answer will depend on if the exhibits and experience changes."
"I believe there is a place for showrooms for brand building and demand creation. If Samsung prefers to let its re-sellers close the sales, that’s a rational choice."

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25 Comments on "Samsung’s new flagship isn’t a store"

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Kenneth Leung
BrainTrust

I am assuming they are basically doing customer data collection only with this showroom. Perhaps their view is the data about the shoppers/visitors is more interesting/useful for them in the long run than peddling gear which can be purchased online or from local resellers down the street. If they want down the road to add a small shop, they certainly can. It would be like visiting a museum where you spend 90 percent of the time experiencing it and have a small gift shop on the way out.

Chris Petersen, PhD.
BrainTrust

What is old is new again — albeit more high-tech.

Samsung’s new flagship store is not all that different from Sony’s and other brand flagship stores designed to showcase the latest and greatest. While touted as a a “playroom” or playground, the question is, will consumers come back? How many times do most people go to a museum per year? The answer will depend on if the exhibits and experience changes.

So the question for the new Samsung’s flagship store is one of whether this is a “branding statement” or a “retail learning lab” or something else. Flagship stores tend to fade fast unless they can convert the “experience” into sales, even if they don’t take place in the flagship store itself.

Max Goldberg
BrainTrust

Samsung hopes to gain customers by opening this store, but why not offer visitors the chance to buy, even if it’s done digitally, with products being sent to consumers? It seems to me that Samsung is wasting an opportunity to capitalize on consumer fascination with their products. There are many ways to sell without getting in consumers’ faces and pitching. Apple does this quite well in its stores.

Tom Redd
BrainTrust

This is a selling tool for Samsung and my read is that they are also letting the strong retail competition online and online/brick-and-mortar continue. They are saying, why get into the retail mess and do the TV price battling? Purely an advertising effort where shoppers can see the real thing vs. trust the online material. Smart move, but coupons from the store only are a major MUST.

This is the future, but many easy ways to purchase online — from any source — need to be available in the stores with a Samsung “FIND THE BEST PRICE” tool.

Stores also sell the service agreements — sell them hard!

Liz Crawford
BrainTrust

What does Samsung gain from opening a flagship without POS terminals?

A museum.

Laura Davis-Taylor
BrainTrust
I saw Renovation Hardware make this move first with their flagship here in Atlanta and my peers and I have mulled over this question regarding the impact of this kind of “gallery” experience often. I would love to see the research, as I don’t know how to answer with anything but a self-reference which is disappointment because I love the instant gratification of stumbling upon an unexpected find and taking it home to enjoy. The discussion thread above already answer the biggies for me: 1. can leadership continue to support something that doesn’t generate revenue?; 2. can they keep it fresh enough to create return visits?; and 3. what is the harm of letting people fall in love and purchase? Or at least letting them order and have it delivered? The one thing that I’d add is that if it is truly about brand experience, can they garner enough visitors to justify the spend? I’m sure someone out there has a magic number for what acquiring a new customer gets them, so how many new customers (or additional product) does this experience have to sell to justify it? On the flip side, a lot of money is spent on advertising… Read more »
Bob Amster
BrainTrust

What they have done appears to be the true definition of a showroom. They are just showing what they can sell you now and maybe some of what they will be able to sell you in the future (prototypes).

This can have multiple impacts. One is to expose more consumers to Samsung’s offerings with the expectation to be a form of advertising. This may prove to be too slick an approach.

Another is to have a showcase/flagship in New York City, in front of the financial markets.

It is difficult to ascertain what the intent was. “Museum” is not a bad analogy but for the fact that this “museum” will have a constantly changing exhibit.

Jerry Gelsomino
BrainTrust

It is great for PR. And with no sales or promotion requirement, it can do more to sell the Samsung brand. Opening in New York City is smart as well as this location becomes a strong tourist draw for visitors from around the world.

James Tenser
BrainTrust

Actually every visitor is already carrying a POS terminal in his or her pocket. This facility may not have merchandise to take home, but it can certainly generate some sales. I believe there is a place for showrooms for brand building and demand creation. If Samsung prefers to let its re-sellers close the sales, that’s a rational choice.

Ed Rosenbaum
BrainTrust

The Samsung brain trust is smarter than I am. So I am not going to pretend to know their intent. But I am willing to go out on a limb and make a guess. Could they be collecting data to determine the consumer’s acceptance of the model? If so, is the plan to strategically open similar stores in high-traffic, high-income areas such as around D.C., Atlanta, Dallas, etc.? I wonder, but I will not lose sleep pondering it.

Ken Silay
Guest
Ken Silay
6 months 17 hours ago

People with vision get this concept. Leaders know that focusing solely on today is a recipe for future disaster. It is important to keep one eye on what is coming while improving those capabilities that allow us to be profitable today. I believe that this concept in conjunction with appropriate opportunities for technology collaboration between retailers (perhaps at a showcase such as this) is a formula for future success both for the individual leader and the company s/he is leading.

Robert DiPietro
BrainTrust

It is a good test of consumer response to new technology in the least pressure-to-buy environment. It definitely will help get consumer feedback and has the ability to showcase how the family of technology works together.

It will be interesting to see if customers go online and purchase through the portal.

Phil Rubin
BrainTrust
6 months 16 hours ago

Samsung is viewing its new NYC-based “flagship” as a branding and product exposition venue rather than a retail location. These don’t have to be mutually exclusive (more on this shortly) but Chris Petersen is correct when he writes that “what is old is new again albeit more high-tech.” Nike pioneered this concept in Chicago with Niketown many years ago. That of course was still a store albeit one that was viewed as a branding investment and perhaps, at least initially, measured as such.

Thus Samsung’s considerable investment doesn’t necessarily have a business case attached — like much image-focused advertising and other branding efforts — but does that make its viability sustainable?

More importantly, from a customer standpoint, why create demand when you cannot immediately fulfill it? While NYC real estate is incredibly expensive, New Yorkers are not only innovators but they are taste- and culture-makers.

This seems like either a missed or misunderstood opportunity, at least for me. Though perhaps Samsung has some very smart partnerships planned, perhaps with key retailers, that will be able to capitalize on the Samsung efforts.

Lee Kent
BrainTrust

Love the concept of having a physical playroom, lab and gallery all in one. As long as it can remain fresh and perhaps have workshops that keep folks dropping by to see what’s new. But there is a big mistake in not giving the customer an opportunity to buy while there.

For my 2 cents.

Arie Shpanya
BrainTrust

Having a flagship based on experiences is a great way to build customer interest. But what good is that interest if it requires visitors to take extra initiative to turn it into a purchase? I think over time Samsung will add POS terminals. The option to buy doesn’t have to take away from the experiential component of the store, but instead I think it will build on it.

Craig Sundstrom
Guest

They get a mention in RetailWire, of course … or more generally, publicity. How well these work depends on how much publicity they can generate which, in turn, is inversely related to how many of them there are. So if you have an attention-starved product and a few hundred million to spend: call now, space is limited.

Vahe Katros
Guest
6 months 16 hours ago

Phones are complex and expensive — the consummation of the sale is a minuscule part of the transaction and it’s a part that folks who are in the Meatpacking District comfortably complete online.

I just checked the web and the site relating to this store has a shopping cart and a way to purchase — so good call James Tenser.

But let’s look at some hypothetical missions:

  1. “Hey honey, we’re out of milk, when you go to the store to buy your smartphone can you pick up a half-gallon?”
  2. “Oh my God, I went clubbing the other night in the Meatpacking District and I saw Taylor Swift at that Samsung Store. Let’s go there and check it out before we eat.”

The head says go to the store/not-store to check out the device, the heart says that the experience might be an entertaining and social experience.

Kai Clarke
BrainTrust

This is a great concept to show off the company’s technology and brands, but a very expensive way to ignore consumers’ demands when they want to purchase the products they have just experienced. Not having POS terminals and product for the consumers will become a major letdown and source of frustration. Who wants to get excited about a product and then have to wait several days to purchase it?

Lee Peterson
BrainTrust

Brand billboards in the form of flagship stores have been around for a long time. What changed the game though, was the numbers Apple got out of theirs. Now it seems a little dubious to NOT try to sell anything. I’d have to say that I believe that will change. Besides, why not try?

Shep Hyken
BrainTrust

Interesting concept. Love it? Then order it. It will be sent to your home or office. Now, it will be interesting to see how they deliver. Is it two-day delivery? Maybe two-hour? (Think Amazon in some markets.) You get the idea.

It’s more than a store. Based on the “experience,” it’s almost a giant billboard. Samsung wants to be a household name, and in some places (and products) they are. This is just adding to the brand awareness.

Cathy Hotka
BrainTrust

Mission accomplished. Plenty of press, no need for inventory and an air of mystique. Nicely done, Samsung.

Erik van der Flier
Guest
Erik van der Flier
5 months 28 days ago

One of the top three of reasons for visiting a physical store is to possess the product right away. From a shopper point of view there seems to be no reason for showcasing only.

Mitchell Fields
Guest
Mitchell Fields
5 months 28 days ago

I think this is brilliant. People hate being sold to. The fact that, going in, I know that there is no way I could actually purchase something from this store means I’m definitely checking it out. I know I can’t be pressured and it’ll hopefully be a fun experience seeing all of the new technology. Samsung is really investing in how consumers are changing the ways they interact and purchase products. This really could be the future of high-end electronics. I can’t wait to see how well this works for them.

Ken Morris
BrainTrust

These type of stores just add to the buzz of the brand. They function as live catalogs that build brand loyalty. Restoration Hardware has been doing this with their RH Gallery concept with great results. They have been buying up expensive real estate in cities like Boston where they bought and renovated the building which housed Louis of Boston at the corner of Newbury Street and Berkley Street to do the same thing a few years ago.

This is retail theater at its best and I believe touch and feel will improve tech brand success.

Adrian Weidmann
BrainTrust

While this may be a Samsung showcase, it certainly is not a “flagship.” This is not a sustainable or viable space. Given its location, I certainly can’t imagine that this will become a shopper destination for the Samsung brand. What is the “surprise and delight” reward for those consumers that do go out of their way to visit the showroom? As with most of these endeavors, Samsung has already maximized its value in that this location has been a PR win — using the opening of this location to tout the Samsung brand.

It seems Samsung should be leveraging the fact that presumably every visitor has a mobile device in his or her pocket. Why not reward each visitor with a notable discount or added value for a Samsung purchase made within 10 days of their visit, regardless of where or through whom they purchased the Samsung product?

From the press release it seems they’ve created a Samsung shrine and missed an invaluable shopper marketing/merchandising opportunity.

wpDiscuz
Braintrust
"Perhaps their view is the data about the shoppers/visitors is more interesting/useful for them in the long run than peddling gear which can be purchased online or from local resellers down the street."
"While touted as a a "playroom" or playground, the question is, will consumers come back? How many times do most people go to a museum per year? The answer will depend on if the exhibits and experience changes."
"I believe there is a place for showrooms for brand building and demand creation. If Samsung prefers to let its re-sellers close the sales, that’s a rational choice."

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