With community increasingly taking center stage in driving performance for many businesses retail strategies, Retail Connections caught up with Caroline Crosswell, Director of Retail at Rapha Cycle, during her fireside chat at Retail Week Tech. to find out how Rapha is ripping up the retail rule book and driving performance by putting community before commerce.
Blending community with commerce
You don’t have to be a cycling enthusiast to engage with Rapha, Caroline told us. With its strategically positioned Rapha Clubhouses that offer everything from sommelier tasting and yoga classes, to a place simply to enjoy a coffee on the commute or host a work meeting, this is a brand that has realised the value of community when blended with commerce.“It’s important we have a compelling programme to feed that community and afterwards we hope to transition them to commerce and balance the two together,” said Caroline. “I think actually that that is the crux of the success of Rapha – it’s about tearing up the rule book on many things and not thinking either first, and following the path of what you are trying to do, which is to make cycling the most popular sport in the world.”
In Caroline’s view, if you put the customer and the community first, it is actually easier to bring them across channels. For example, with two thirds of Rapha’s sales coming from online, Rapha doesn’t open a store without looking within a 50 mile radius to assess what the online demand is in any given market. But that doesn’t mean its stores are any less important – in fact quite the opposite.
“To open up a store per se is relatively straightforward, but to open up and activate a community is much harder. We’re on a journey to balance the commercial with building a community. For example, we have a café in every Rapha Clubhouse – yes, it adds operational costs and takes away from profitability, but you can’t have a Rapha Clubhouse without a café in it. It’s all about balancing out the non-commercial elements with commerce.”
“We are happy if people just use our cafés – it’s a brand connection whether they are buying or not. Some people may come to our in-store events but then go on to buy online so it’s a seamless journey. It’s really community first, commerce after, and we are starting to see that work in many markets.”
Fuelling brand passion through people
Talking of their people strategy, for Rapha’s store associates, the love of the sport has to come first and retail or sales experience afterwards. This is finely balanced so that Rapha’s store staff can give the right level of service to customers – whether they are keen cycling enthusiasts, looking for answers to technical questions or recommendations on which mountain they should ride up next, or those who aren’t into cycling but might be popping in-store to pick up a gift. “We employ sport first and commerce after – you can teach commerce but you can’t really teach the love of a sport, so getting this balance right is key,” according to Caroline.
Rewriting the physical retail rulebook
Rapha’s store strategy is about building breadth and not depth. For example, Germany is a significant market for Rapha as a brand, and the business could easily grow revenues in that region by opening up additional stores. However building the mission and the love of cycling within its community comes first, so they tend to focus on having one store in a market allowing them to extend the global community in more markets.
When it comes to the location of its stores, Rapha always prioritises ‘off pitch’ locations. While finding Rapha on the main street or in a mall might be seen as a more commercially viable option, with higher levels of ambient footfall, instead Rapha picks architectural spaces that are interesting. ‘Ride in, ride out’ access is a must, and Rapha favours locations where its customers would be more likely to socialise or work or just generally lead their non-Lyrca lives.
Gut retail wins out in community commerce
Instinct also plays a key role in the choice of location for its Clubhouse – according to Caroline. It has to feel right and feel like the right place for Rapha’s home, rather than just the right place for a Rapha store. Rapha’s Clubhouse in Majorca is a case in point. It’s one of the most profitable stores in Rapha’s estate – but when it was chosen there was no logic to back it up commercially, nor was there a market online to support the decision in the local area. The Rapha store team just felt it was a good thing to do and the store proved to be an instant success.
The same can be said of its store in Boulder, Colorado, which was selected as a location due to the central role the city plays as the global heart of the sport. “Gut-retailing is key to community development,” and these locations, Caroline suggests, are just as – and if not more – important as having presence in New York, Tokyo and other major cities.
Caroline was speaking at Retail Week’s Tech festival, which this year will combine with Retail Week Live 2020, which has been postponed to take place in H2 (date tbc) at the Intercontinental O2, London.