With a paired-down product assortment, reduced square footage and a merchandising concept that quickly illustrates how to accessorize outfits, Express Edit is here to reintroduce its brand to shoppers.
It's also here to experiment. Express CEO Tim Baxter spoke about the store concept in June as a channel in which the company will "test, learn and modify going forward." It's also being used to diversify the apparel company's store fleet, which is primarily mall-based. Express Edit stores are between 1,400 and 4,500 square feet, with short-term leases at off-mall locations to allow for "maximum flexibility" as the retailer tests the format.
So far the trial seems to be taking off. Baxter stated that the company is seeing a higher percentage of new and "reactivated" customers at its Edit stores, with those locations seeing higher average dollar sales.
The retailer expects to launch 10 of these locations by the end of 2021. Two of them are already open in Washington, D.C., as a means to explore multiple stores in a single market.
"[T]esting these smaller formats in the city center will allow us to read the impact on existing stores, e-commerce sales to these zip codes, and new and existing customer activity overall," Baxter said. It also stays within the larger objective of curating a product assortment to reflect local trends in a market or neighborhood. The company declined to comment on the number of Express Edit stores currently open and their locations.
"Having local, smaller shops as a representation of your brand is a really good idea," said Lee Peterson, executive vice president of thought leadership and marketing at WD Partners. "I think the idea that you can pretty cost-effectively try smaller stores in neighborhoods with limited inventory and short leases is a really, really good try."
And it's a very different scenario than what was in play prior to the pandemic when everything seemingly was contracting. During the fall of 2019, the retailer made an appearance on a watch list for showing an elevated risk of bankruptcy. By January of 2020, the retailer stated that it would shut around 100 stores and was embarking on a three-year, $80 million expense reduction plan. That came just after the company announced a 10% corporate workforce reduction at its Columbus, Ohio, headquarters and its New York City design studio, followed by an additional 10% reduction in December of that same year.
And the company is still in a precarious position. S&P Global Market Intelligence identified 15 companies on its "Most Vulnerable U.S. Retailers" list as of August 16. Express made that list, coming in third behind Merion and J. Jill, with a 21.7% probability of default on its debt in one year.
At the time the company revealed that it was closing 100 stores, Baxter also presented a corporate turnaround strategy, which, in part, included a plan to drive customer retention and acquisition, inventory optimization, a product-first approach and a "promise to customers to edit the best of current fashion for real-life versatility."
The Express Edit store looks to be the embodiment of that promise.
"Shoppers are increasingly attracted to curated selections by experts and influencers," Daniel Levine, director of the Avant-Guide Institute, said via email. "The idea that a store would curate its own collection is a playful twist on that trend."
Express Edit is tapping into that sense of curating a capsule collection through its merchandising. The store groups together like colors and places products in ways that shoppers can easily create outfits. "They've got belts hanging up over there with the outfit, they've got sunglasses sitting there," said Joan Braatz, a freelance executive merchandiser with assortment optimization and product development experience with retailers including J.C. Penney and Macy's. Braatz noted that many Express competitors keep those items grouped together near the cash wrap. "It really feels like to me they're trying to cross-sell," Braatz said, stating that there is an opportunity to increase the units per transaction by selling an outfit instead of unrelated pieces.
That means Express is taking a different approach. "I think about some of their other competitors and it's just a commodity — of here's a tables-worth of jeans or here's a tables-worth of T-shirts. This looks more lifestyle merchandising to me," said Braatz. "You can really see they've narrowed their choices down to strike some kind of focus with their customer."
Other experts aren't convinced, with Peterson calling it disappointing. "It was just sort of normal," he said of the Edit store and its merchandising strategy. "It just looked like an Express store but only smaller. And, if that was the big idea, then they certainly achieved it. But you would think that you could test some new ideas and even some virtual elements. Or you could do the showroom idea."
But, Peterson said, now is the time to test things. "Right now is a really good time to experiment because people are still spending money." Part of that includes pushing stores outside of malls, with some of the biggest retail players making the leap, including Victoria's Secret, Gap, Bloomingdale's and Nordstrom via its Local stores.
"If she's shopping off-mall, she's already looking for ease, right?" Braatz said of how customers are interacting with the real estate strategy. "She wants to get in and get out. The parking is easy, she doesn't have to walk through the mall. She's making a very deliberate driveway decision to go to that particular store. So you want to be sure that you're satisfying her expectation." One way all retailers exploring the off-mall locations can achieve those goals is to invest in employees as a means to go from a transactional experience to something personal.
"You want to have a really good experience in store, whether that's clienteling or it's wardrobing. It's much more of a personal shop kind of atmosphere. And if Express can figure this out at their price point, that really sets them apart," she said.