The Latest Retail Trend is Also One of The Oldest

They say retailing trends go in cycles, and while there is an occasional new twist, oftentimes best practices are drawn from prior efforts and strategies.

Such as the consignment model, which is being named as the latest and greatest thing to hit retail.

That would be true if we hadn’t seen it before.

Back in the early days of retailing it wasn’t uncommon for manufacturers to show their wares in a retail space, lease or sublet the space, and then give the hosting retailer a cut of the action. When discount retailing really hit it big in the 1960s and 70s, many featured leasing departments for a wide variety of products from shoes to electronics to rugs.

Today’s modern department store often includes subleased spaces in some merchandising areas, particularly for luxury and beauty products

So the trend we’re seeing today, particularly from independent specialty stores, is not a radical change. What has altered however is the duration of the sublease, which often runs for a month or so, sometimes even less.

One of the most recent examples can be found in the Dallas marketplace at a retailer named Neighborhood Goods. Located north of the city in suburban Plano, the store only opened this past winter and features a whole host of what are essentially leased departments, everything from home to fashion to beauty. Its developers plan to open additional units over the next 12 to 24 months using the same basic model.

That model was seen earlier in New York City at a retail operation called Story in the Chelsea neighborhood. Every six to eight weeks, the store would be completely remerchandised with a different theme, very often featuring a single supplier or brand. It’s a variation of the pop-up model, but Story institutionalized the concept. And also attracted the attention of Macy’s, which bought Story and is putting its founder to work creating similar merchandising spaces in its stores under the Market name.

Perhaps the most long-running – and successful – retailer to move towards the consignment model is Selfridges, the London department store that sublets a significant portion of its selling space to third parties. It ensures a constant new flow of products while keeping Selfridges’ risk exposure to a minimum.

The consignment strategy isn’t new. But it has proven successful for many retailers, large and small, from around the world. Sometimes the best ideas are the ones that have been proven to work.