ANALYSIS: Why are coffee shops popping up inside retail stores?

Retailers are finding new ways to turn a quick shopping trip into a longer stay, with cafes becoming an unexpected part of the retail experience.

Coffee is creeping into places where you never traditionally expected to find it, and there may be a very good business reason why.

You can now browse clothes at Bench or Penshoppe and grab a cup of coffee without leaving the store. Some UNIQLO and MUJI stores have also made room for coffee.

It may seem like an unusual combination. After all, what does coffee have to do with clothes or Japanese home goods?

For bookstores, the connection is easier to understand. Books and coffee have long been paired, with cafes becoming a familiar feature in bookstores around the world. Fully Booked BGC now has Book & Cook, a bookstore cafe and bistro serving coffee, pastries, pasta and comfort meals. National Book Store, meanwhile, recently brought Toby’s Estate into its SM Mall of Asia branch.

But when coffee starts showing up inside fashion and lifestyle stores, the connection is less linear. Somehow, though, it works.

A coffee shop can give a retail store something that is increasingly valuable in the age of online shopping: a reason for people to stay.

Buying something online can take a few taps and a couple of minutes. A physical store has to offer more if it wants customers to make the trip, and coffee is a relatively simple way to make the experience more inviting.

Someone who walks into a clothing store to look for a shirt may leave after 15 minutes. Give that person somewhere to sit, a friend to meet or a coffee to drink, and the visit can become considerably longer. That does not automatically mean the customer will spend more, but more time inside a store creates more opportunities to browse, discover products and eventually buy.

There is also a practical benefit for the coffee operator. Instead of building a customer base from scratch, an in-store cafe gets access to people who are already walking through the door. The retailer, meanwhile, gets an additional attraction without having to become a coffee company itself.

And this is hardly a new idea in the Philippines. A 2018 Knight Frank report on Metro Manila’s retail sector said the in-store cafe concept had already made its way into the market, citing Craft Central at Ayala Malls Vertis North, Biblio at Ayala Malls Circuit and Dark Specialty Coffee at SM North EDSA. The report said these cafes could be less expensive to operate and construct than full-service coffee shops while helping retailers with branding, marketing and creating a more distinctive shopping experience.

The concept has since moved into more mainstream retail, making the examples we see today less like quirky experiments and more like different versions of the same strategy.

Customers can combine shopping with a coffee break without having to make another stop. A mall visit can become more leisurely, while a clothing store can also become a place to meet someone or simply spend a little more time.

That makes the arrangement potentially a win-win-win, with each side getting something useful from the partnership.

The retailer gets another reason to bring people into the store and keep them there. The coffee operator, meanwhile, gains access to customers who are already there to shop. And customers get a more convenient experience.

For Filipino retailers, that may be the bigger opportunity. As buying online becomes easier, physical stores have to offer something that a checkout button cannot. Coffee is a relatively simple addition, but it can change how people use a store and give them another reason to make the trip.

What started with bookstores and lifestyle shops is now showing up in mainstream fashion and retail. The cafe inside the store may be less of a novelty than a practical response to a retail environment where getting people through the door is only half the challenge. Getting them to stay—and spend—is another.

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