Retailers Use Bay Area to Test Radically Different Models

By Nancy Amdur

Ever since H. Gordon Selfridge moved from Chicago to London in the late 1800s to open the first department store designed especially for women, brick-and-mortar retailers have emphasized the quality of the shopping experience in their business models.

blue illusion web pageSelfridge’s innovations of open shelving of inventory, the center-floor makeup and perfume counter, in-store cafes, tea rooms and “ladies rooms” free of cigar smoke and spittoons, have long become ubiquitous elements of the retail shopping experience, but the search for new ways to deliver an experience along with quality and value continues.

Blue Illusion, an Australian women’s fashion boutique focused on personalized service coupled with local community engagement, can be seen as the logical extension of Selfridge’s focus on the shopping experience. The retailer debuted its first United States location late last year in San Jose, with plans to open up to 11 more stores in the Bay Area over the next 18 months.

Blue Illusion’s 893 square foot store in San Jose’s upscale outdoor shopping center Santana Row marked the brand’s entrance into the area. The retailer will open a 1,500 square foot store on Santa Cruz Avenue in Menlo Park and a 1,630 square foot location in the Los Gatos Old Town Center shopping mall during the first quarter of 2014, said broker Scott Turner of Retail West Inc., who is working with the growing brand. The company also expects to open a store in Carmel this spring and is looking for space on Fillmore Street in San Francisco along with locations in Corte Madera, Walnut Creek, Burlingame and Sacramento.

“The Bay Area is a good fit for the brand from a cultural perspective, with [its] strong community roots,” said Joseph Doyle, vice president of property for Melbourne-based Blue Illusion, adding that the area’s clientele and climate also are similar to the brand’s existing markets.

Further U.S. expansion is possible, but “we will first make sure the model is tight in the Bay Area,” Doyle said.

Launched in 1998 by husband and wife Danny and Donna Guest, Blue Illusion sells French-inspired clothing along with fashion and home accessories. Stores provide a Parisian feel with cornices, distressed paint finishes, chandeliers and armoires. The concept promotes a comfortable environment and strong customer service with employees connecting and building relationships with shoppers. New product is introduced every two or three weeks.

“Our cornerstone is working with local communities,” Doyle said. The stores run monthly events where customers shop during a certain timeframe and 25 percent of total sales go toward a specific charity.

Blue Illusion fits best in a 1,000 to 1,500 square foot footprint in lifestyle centers with co-tenants such as Chico’s, J.Jill, Anthropologie, White House Black Market, Talbots and Nordstrom. Neighboring daily needs destinations, such as a bank, grocery store or post office, also are a plus, Turner said. The company targets areas with average family income levels of roughly $100,000 or more and its core audience is women ages 40 years and older.

There are 112 Blue Illusion stores in Australia, New Zealand and the U.S. While the stores are no doubt a testament to the success of Blue Illusion’s touchy-feely retailing model, it isn’t the only model competing for shoppers’ attention.

Hointer, a Seattle-based technology-driven clothing store, opened and closed a pop-up location in the Stanford Shopping Center in Palo Alto during 2013 and is considering opening one in San Francisco. In sharp contrast to high-touch retailers such as Blue Illusion, Hointer offers a sleek, technology-enabled shopping environment emphasizing convenience and value that is gaining attention from other retailers.

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