The Rise of the Neighborhood Store: Why Brands of All Sizes Are Investing in Local Retail

neighborhood store local retail experience

When Darnesha and Erwin Weary decided to open a coffee shop in the middle of 2020, they knew it would be a risk. “We had never owned a brick-and-mortar location before,” says Darnesha.

The couple, who recently celebrated their 23rd wedding anniversary,  love coffee, and even went to a coffee shop on their first date. With 20 years of community organizing experience, they decide to combine their love of coffee with a desire to improve their community. “We knew it was going to be more than coffee. We knew it would be a community center,” Darnesha says. 

Two years later, Black Coffee Northwest is a neighborhood favorite in Shoreline, Washington. Besides being well known for its coffee, the café has become a gathering place for locals. The shop hosts events for local organizations and community members and acts as a drop-in youth center. Students can use the space to study, receive tutoring, and access free mental health sessions.

Black Coffee Northwest is part of a trend of store openings that focus on the local community. Even larger retailers like Google, Nike, and Nordstrom are opening “neighborhood stores.” These stores are often smaller and located outside of traditional shopping centers. 

This trend will continue. According to a study by Accenture, 56% of consumers are shopping more locally or purchasing locally sourced products. Despite varying motivations, shoppers are seeking goods and services in their backyards.  

As companies continue to invest in community-based retail, brands must make sure physical stores fit authentically into the local community. 

The rise of the neighborhood store

New consumer shopping habits, brought about by the pandemic, accelerated the rise of neighborhood stores. 

“COVID changed everything, especially [the] shopping experience. More people [are] working from home and staying local,” says Vinny Martinelli, owner of Helios Sunglasses, a sunglasses and apparel store in Rehoboth Beach, Delaware.

Shoppers expect convenience, speed, and personalization. According to a study by the National Retail Federation, 97% of shoppers will back out of a purchase if it’s inconvenient. With rising supply chain costs, retailers can use local stores as micro-fulfillment centers to meet customers’ needs. 

Local stores can also build brand awareness and act as a “billboard.” Opening a store close to consumers’ daily routines allows brands to leverage their retail locations as marketing tools, even after hours. 

For Amish Tolia, co-CEO and co-Founder of Leap, a retail platform that enables brands to open physical retail locations, local stores foster brand loyalty. 

“Stores help create a more meaningful relationship between brands and shoppers,” he says. “This is only heightened when they combine an immersive experience with well-trained associates. These connections and relationships translate directly to a more valuable shopper.”  

Finally, the increase in community-based retail reflects a growing interest in conscious consumption. For many consumers, shopping in their local communities is an opportunity to invest in their neighborhood.  

Ashley Robinson, founder and Chief Strategy Officer at The Seaker Group, a retail growth consultancy firm agrees. “Consumers are driven more now than any time in my 20-year career to ‘purchase with a purpose.’ Often, supporting their local community is enough.” 

With local stores, brands can better meet shifting consumer expectations and a craving for connection. 

Community-based retail in practice

Often retailers rely on the same store design or concept as they expand. As consumers continue to shop locally, brands will need to be more mindful of the communities within which they operate. 

“The answer should not be one blueprint,” says Robinson. “But rather a specific strategy. If you don’t take this approach, it won’t be authentic, and your customer will feel it.” 

For brands to be genuine, they must consider the local community at every touchpoint. Here are five ways brands can authentically fit into their local neighborhoods. 

1. Choose a store location based on local customers’ habits 

The location of a store is crucial to how well the brand fits into a community. Where are your customers shopping, eating, working, and socializing?  

As brands look to meet their customers’ in their daily routines, mixed-use environments and retail clusters have become more popular. In Washington, DC's neighborhood of Georgetown, 15 direct-to-consumer brands have recently opened stores, with more on the way. Clustering with like-minded brands can create a more organic shopping experience.

neighborhood store local retail experience


Brands have also opted to pursue local shop-in-shop locations. Last year, DWS opened inside six Hy-Vee grocery stores in Minneapolis. 

For Robinson, choosing the right location requires brands to “understand how your consumers think differently …  about their local real estate, and how that perception reflects upon your brand.”

Although location criteria vary by brand, retailers must meet customers where they find it convenient.

2. Invest in a store design that celebrates the local community 

A well-designed store can help create a sense of locality. When opening Helios Sunglasses, Martinelli looked to the surrounding landscape for inspiration. “As a beach-driven laid-back community, we wanted to create a relaxing beach vibe as you walk through our doors,” he says. The store “mimics the relaxing and stress-free nature of the southern Delaware shores.”

 neighborhood store local retail experience


Here are a few ways retailers celebrate the local community through store design: 

  • According to Patagonia’s Sustainable Building Principles, the brand uses local materials and labor whenever possible. It looks for locations that are accessible by public transportation. It also follows strict guidelines to cut its environmental impact
  •  In Nike’s new small-format store, Nike Live, the retailer looks to incorporate the local community in its imagery. In its Eugene, Oregon, location, the store includes a running map that highlights local landmarks. The store also uses images of athletes with ties to Eugene
  • Google teamed up with Brooklyn-based artist Olalekan Jeyifous to create an art installation for the company’s new Google Store in Brooklyn, New York

3. Differentiate the store experience 

The experience inside the store should reflect the energy of the outside community. Retailers can create a unique store experience by diversifying products, services, and events. 

  • Nike offers University of Oregon merchandise at its Eugene store
  • Jeni’s Splendid Ice Cream varies ice cream flavors by location to give each store a more memorable experience
  • As part of its “West Elm Local” initiative, each store features a variety of home goods and gifts from local artisans
  • Feral, a Denver-based outdoor retailer, offers gear repairs and same-day delivery. The retailer also partners with Gear Washers, a local restoration company, to clean technical gear

Host in-store events and workshops

Workshops and events can generate traffic and help your store stand out as a destination in the community.  

  • The Google Store hosts neighborhood tours where you can try out Pixel’s photo features
  • Alo Yoga offers weekly classes with monthly themes. In June, members from the local LGBTQIA+ community will be leading wellness classes and workshops
  • Last year, Feral hosted a Feral Camp Cook-Off where participants could compete to create the best camping dishes

4. Build a connection with the community 

Collaborating with local businesses and nonprofits can help stores feel more rooted in the community. 

  • Cotopaxi hosts Questivals, a 24-hour adventure race. The event encourages teams to complete “community-oriented” challenges and explore their neighborhoods
  • Solfire, a Brooklyn-based athleisure retailer, has a community board that showcases local fitness studios and outdoor places “where people sweat” 
  • Charlie Hustle, an apparel retailer in Kansas City, partners with local nonprofits to create “Communi-Tees.” The brand donates part of the proceeds from each collection
  • Patagonia operates individual store accounts on Instagram. Each account highlights store events and opportunities to get involved in the community

5. Empower local teams

By empowering store teams to drive programming, retailers can create a better local experience for customers. 

Retailers can push teams to get involved by encouraging: 

  • Participation in community affairs
  • Hosting staff volunteer days 
  • Highlighting staff in-store and on social media 
  • Organizing philanthropic campaigns that benefit causes that are important to staff

For Darnesha, empowering her team at Black Coffee Northwest is part of her company's mission. The coffee shop hires and trains young baristas, and the owners encourage their employees to get involved. “We make sure our youth voice is heard. We truly believe that emerging leaders are the future,” she says. 

By allowing store teams to drive decision-making, even large retailers can create an authentic local experience for their customers. 

Using local retail to build a stronger brand community 

Brands can no longer replicate a store concept and be successful. Consumers want to invest in brands that provide convenience, personalization, and a connection to their values. 

For Robinson, local retail is about appealing to shoppers’ emotions. Retailers “need to meet their consumers where their hearts and minds are,” she says. “[This] typically doesn’t occur at the big mall or a nearby tourist destination, but on a local level.”

With a more localized retail strategy, retailers can more authentically tell their brands’ stories and build community among their consumers. 

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