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Back in March 2021, Dr Christopher Knee shared his views on cultural goods, specifically books, in an IADS Exclusive. Two years later, the cultural goods footprint in retail is growing in renewed ways, justifying a new look at the topic.

Several reasons are underlying the cultural goods trend. On one hand, the cultural goods business at large is growing as explained by Bain & Company and Altagamma in their 2021 luxury report: with the reopening of art fairs, the art market recorded a post-Covid renewed interest in art with an increasing participation of new and younger consumers buying in the mid-priced segment. Besides investment and speculation purposes, this phenomenon is also sustained by the new pivotal role of home and the intertwining of living and working. On another hand, many luxury brands are morphing from high-quality product manufacturers to cultural actors, offering consumers ‘on steroids’ value proposition and raising the bar for other retailers.

This expanded value proposition is an additional way to answer new consumers’ expectations for more experiences beyond the traditional retail transactional relationship. From that perspective, increasing the retail’s cultural component and the cultural goods offerings represent an additional opportunity to drive traffic in stores and possibly generate additional turnover.

High-end art is a traffic and brand builder, but could art selling generate turnover?

Many department stores display art in their stores. For more than 30 years, Le Bon Marché in Paris has supported the contemporary art scene by acquiring paintings, sculptures and drawings as well as exceptional design pieces. Visible everywhere in the store and in parts of displays for some design pieces, the store is now giving its collections an additional experiential value by monetizing visits (for a EUR 20 fee).

Galeries Lafayette also ventures into exhibiting art: since 2016, they are showing a massive ‘Light Machine’ by French artist Xavier Veilhan in the Haussmann men’s store. More recently, and now that the famous cupola renovation is completed (a cultural attraction in itself), they brought an art installation called ‘Time to Breathe’ by the Korean artist Kimsooja, which offers a new vision of the cupola. By covering the inside historic dome with a film that diffracts the sun's rays, Kimsooja creates ephemeral luminous effects on the exterior surfaces and in the interior spaces of the dome. To create a new experience, visitors can even book a visit to the in-between dome.

Since 2020, South Korean major department stores such as Shinsegae, Lotte and Hyundai are venturing into the art market in 2 ways. Firstly, they jumped into the art market by collaborating with existing art fairs: for example, Hyundai and Lotte’s Busan branches are partnering with local art fairs. Secondly, they are incorporating art pieces in their stores to enhance the customers’ shopping journey (up to 250 pieces for Shinsegae). As for other Western countries, interest in art grew during Covid-19, particularly among the Millennial and Gen Z generations. Overall, the purpose of art displays in department stores is about enhancing company branding and not trying to make a profit out of selling art pieces.

But art also increasingly enters department stores in transactional ways. In May 2023, Lotte announced they would open a pop-up store showcasing 200 different kinds of merchandise from the National Museum of Korea (replicas, limited editions). Here, this museum ‘gift shop’ overlaps with national pride amid the Hallyu cultural wave. Similarly to Lotte, La Samaritaine opened a 5-month ‘gift shop’ run by the international art gallery Perrotin at the time of the store reopening in June 2021. The 200 sqm pop-up store offered cultural goods such as art books, artists’ limited editions, replicas, goodies and decorative objects. Besides product selling, offering cultural goods was a great way to make the offer dedicated to younger customers more dynamic and attractive.

Finally, in May 2023, Galeries Lafayette Nice Massena store hosted a performing 50 sqm pop-up store dedicated to controversial, yet very successful, French artist Richard Orlinsky. The space was selling limited editions of the artist’s famous gorilla sculpture and an exclusive highly commercial capsule collection including items priced under EUR 100 such as t-shirts, pens, puzzles, suitcases, iPhone and AirPod cases.

Selling cultural goods thanks to partnerships

As explained by Dr Christopher Knee, some department stores have not abandoned books but run this business in partnership with bookstore partners. Harrods in London partners with WHSmith to manage their lower-ground bookstore. De Bijenkorf in Amsterdam has handed its book department over to AKO, part of Audex. In 2021, Manor signed a partnership with FNAC (a legacy French retailer specialised in cultural goods) to open 27 shop-in-shops to provide books, audio, video and electronics. There are business limits to partnerships though: having limited brand awareness in the German-speaking part of Switzerland, FNAC and Manor recently decided to close 10 shop-in-shops.

As part of their turnaround strategy launched in March 2022, Printemps announced that cultural goods would be part of their revamped product offerings. Pursuing their existing partnership with the famous Parisian bookstore Gibert, they opened a 490 sqm bookstore located on the 7th floor of the Haussmann men’s building. The space offers more than 20,000 books including 20% of second-hand books and also a very large selection of Japanese manga books. This is a smart move as the category is highly praised by Gen Z who is massively buying manga (France is the second market for such books). Filled with natural light and offering a great view of Paris rooftops, the bookstore is coming along with appealing food and beverage offerings, making the entire space a relaxing and engaging place. Whether profitable or not, this type of offering can generate traffic when shrewdly targeted and create the kind of lifestyle experience and ecosystem that consumers are currently looking for.

Being part of the Zeitgeist: cultural prizes and sponsorship

Brands are increasingly embracing culture to be visible to additional groups of consumers and to be a player in the Zeitgeist. Supported by the Loewe Foundation, the brand created a Craft Prize to support international artisans who create objects using materials such as ceramics, metal, leather, textiles, glass, wood, etc. To emphasize its cultural impact, the latest edition of the Loewe Craft Prize award ceremony was held by Fran Lebowitz (a famous New Yorker intellectual leading figure) at the Noguchi Museum in New York at a time when the brand is willing to grow its footprint in the US.

The world of department stores also participates in cultural prizes or acts as a sponsor. In the US, Neiman Marcus has 3 fashion awards which were given to Brunello Cucinelli, Loewe’s artistic director Jonathan Anderson and shoe designer Amina Muaddi. The department store will invest in merchandising, brand marketing and in-store experiences to promote these brands to its customer base. Closer to the IADS, the Manor Cultural Prize offers an opportunity to discover a wide range of emerging artists throughout Switzerland. For more than 40 years, the prize-winning artists have had exhibitions of their work throughout the country.

In terms of sponsorship, in 2022, Galeries Lafayette Group renewed its support for the international contemporary art scene by becoming a partner for emerging art galleries during the first-ever edition of Paris+ by Art Basel. The Group supported and boosted the visibility of 16 galleries and artists. Also, the group runs Lafayette Anticipations, a foundation supporting contemporary creation. The Foundation acts as a catalyser, providing artists with unique conditions to produce, experiment and exhibit their art.

Beyond retail: becoming a cultural ecosystem

Big luxury brands have always had privileged relationships with the art world in many ways, from product offerings (think Yves Saint Laurent’s Van Gogh sunflower jacket and Mondrian dress) to brands sponsoring art institutions (Chanel and Rolex being Paris Opera’s major sponsors) or art museums (Pinault Foundation in Venice and Paris and Louis Vuitton Foundation in Paris). Art and commerce have always been a great match and it’s only growing.

Since December 2022, the Louis Vuitton Dream exhibition is held in their Paris HQ, celebrating 160 years of creative exchanges with artists such as Jeff Koons and Yayoi Kusama. The exhibition includes a curated gift shop and a famous pastry chef restaurant offering logo-stamped cakes. Overall, Louis Vuitton is doing more than ‘only’ transforming into a luxury lifestyle brand: the value proposition is now to dress, eat, drink, sleep (they will open a hotel), and soon read and watch Louis Vuitton. It’s a complete mental ecosystem. And speaking of watching, Kering’s Saint Laurent launched a motion picture production company in 2023 with a first venture financing the latest Pedro Almodovar movie. Also, LVMH’s Loewe entered the world of high-end design with an exhibition held as part of the 2023 Salone del Mobile in Milano: building on their reputation for craftsmanship, they showed different weaving techniques in various materials to reinvent humble chairs. Chairs were sold out in minutes.

In the word of department stores, Flannels is currently rethinking the role of its London flagship store. They opened a new space dubbed Flannels X. Rather than a space designed to sell products, it is meant to become an ever-evolving cultural playground of pop-ups, gigs and exhibitions for cultural creators to exchange and broadcast ideas. On the occasion of Beyoncé’s tour coming to London at the end of May 2023, Flannels X had a pop-up store showing a big part of the Beyoncé x Balmain couture collection for the first time, and also selling merchandise from Beyonce’s Renaissance World Tour. This initiative positions the store at the intersection of luxury and pop culture to offer more experiences and reach younger audiences.

In Hong Kong, on top of their art village, art collection, art space and events, K11 malls launched its Art Foundation, a non-profit organisation dedicated to fostering the development of Chinese contemporary art. Committed to supporting artists and young curators through exhibitions, artist residencies, and educational programmes, the foundation also established partnerships with leading art and cultural institutions around the world, Centre Pompidou in Paris, and the Metropolitan Museum of Art in New York among others.

Since their inception, department stores have always been cultural stakeholders. Their remarkable architecture, the size of the stores, the unprecedented abundance of products and the revolution they initiated in buying and selling made them an essential part of the Zeitgeist.

They lost a bit of their grip over the past decades. While fashion usually is department stores’ main source of revenue, cultural goods and footprint can for sure contribute to improving the shoppers’ journey (if not generate turnover), not to mention how acting as a cultural player can contribute to creating the experiences consumers are looking for.

Credits: IADS (Christine Montard)