Mocha And Minions: Inside Comcast’s Attempt To Revive Its Image Through Retail
Comcast has jumped into the experiential retail trend with two openings of its Studio Xfinity concept, a move Comcast representatives and retail experts say is aimed at repairing the often-criticized company's image rather than bringing in sales.
"The company recognized that a lot of the customers felt disconnected," said Comcast Senior Consultant Vailen Smith, who works in the D.C. location. "They figured a way to fix that was to create a place customers could come, hang out and grab a cup of coffee."
The first Studio Xfinity store opened in Chicago in 2015. Comcast then waited over two years before rolling out the second iteration in D.C. in November. The 9K SF store features standard service and product offerings, plus a café with seating areas and a large events space.
Comcast, a $156B telecommunications company, has struggled with its reputation in recent years. It ranked last in customer satisfaction among major national television providers with 58% approval, according to the American Customer Satisfaction Index's 2017 report. Comcast's approval dropped 6% from 2016, the largest dip of any television service in the survey, and it sat well behind the 70% approval of top competitor Verizon Fios.
While many customers may associate Comcast with increasing monthly rates or frustrating customer service calls, the company hopes to show them it has more to offer.
Comcast owns NBCUniversal, one of the nation's largest media companies with hundreds of popular shows and movies. Rappaport's Patrick O'Meara, who represented Comcast in the Studio Xfinity deal it signed next to D.C.'s Capital One Arena, said the company wants to highlight some of the more popular aspects of its brand.
"If they can have everybody going into a hockey game or a concert walk by and say, 'Oh wow, Comcast is cool, they own Universal pictures. I love Minions, my kids love Minions'," O'Meara said. "Every positive reflection helps the parent company, which is a multibillion-dollar company, one of the biggest in the country."
Comcast is paying top-dollar rents for the high-traffic location in D.C.'s Chinatown neighborhood. O'Meara would not disclose the exact price, but he said it is three times what the previous tenant, CitySports, paid to occupy the space.
Seventh Street is D.C.'s most expensive retail corridor with rents as high as $400/SF, according to Dochter & Alexander Retail Advisors' latest report. O'Meara said the company does not necessarily need to sell enough products to justify that rent, as long as it is making positive impressions on those who enter and walk by the store.
"The goal was not so much to sell a bunch of cable subscriptions or upgrade to buy HBO like a typical store," O'Meara said. "The ultimate goal was to improve customer satisfaction and opinion. It's as much a marketing tool as a retail store."
Dochter & Alexander principal Dave Dochter, a D.C. retail expert who was not involved in the deal, said he sees this as part of a larger trend of companies using prime physical retail locations as a branding opportunity. He said Comcast is a good example of this trend given its historical unpopularity.
"They're servicing and they're enhancing their brand from some of the challenges they had previously under Comcast," Dochter said. "They're completely rebranding. They're getting away from a lot of the negative connotation to Comcast."
For the D.C. store, Comcast partnered with trendy coffee shop La Colombe to serve coffee, and the store offers seating and free WiFi to encourage customers to treat it like a café. It also has a large events space in the back where it hosts movie screenings and brings in popular figures.
During the Winter Olympics, which were broadcast on Comcast-property NBC, Studio Xfinity brought in former U.S. Olympic figure skater Michael Weiss.
"As we're so acutely focused on customer experience, it's about having a place where we can really tell that story in person and improve that image of who we are as a company throughout the D.C. area and broader," Comcast Beltway Region Vice President of Marketing and Sales Jeff Seidenfaden said.
While Comcast chose D.C.'s busiest corridor, Studio Xfinity's first location in Chicago was a bit different. Sitting at 901 West Weed St., the store is near the fast-developing Halsted Triangle, but it is off the main streets and does not see as much organic foot traffic.
"The feedback from Chicago was underwhelming in terms of performance," O'Meara said. "The reason, they decided, was the geographic real estate selection; they chose an up-and-coming neighborhood ... They learned the lesson and their strategy [in D.C.] became to get as many eyeballs and get as much foot traffic."
Comcast's regional vice president of sales in Chicago, Matt Quantz, said the Chicago location opened a dialogue in the company about transforming the customer experience, but did not comment on the store's performance.
"It's about trying to find the right balance of city and neighborhood," Quantz said. "We realized this area is an up-and-coming neighborhood with a solid residential base surrounding it. Retail and real estate is as much an art as a science, and we're able to do things here we could not do in other stores because of Studio Xfinity's location and size."
On an electronic panel in the West Weed Street store, a display tells passersby the store is closed even while it is open. Bisnow visited the Chicago store on three occasions, and the panel was lit up every time.
Seidenfaden said he does not have details on the Chicago store's performance, but he said the D.C. store has performed beyond the company's expectations. He said it measures success in terms of foot traffic, retail purchases, subscription growth and event attendance, though he could not share specific numbers.
"We're a subscription-based business, so we're not just relying on the sale of products," Seidenfaden said. "It's about maintaining that subscriber growth and making sure we're telling the right story so people want to stay Comcast/Xfinity customers.
The company views the D.C. location as a success after its first five months, Seidenfaden said. He said Comcast does not have immediate plans in the works for a third location, but is open to looking at other markets.
While the store has plenty of foot traffic walking by and is able to draw people in, the majority of those who enter are not signed up with Comcast, said Smith, the D.C. store representative.
"We get a lot of tourists," Smith said. "Surprisingly, not a lot of Xfinity customers. People don't really know what we are. Even if they see the 'Xfinity,' they see the 'Studio' first. It's nothing they've seen before."
But Seidenfaden said the company is perfectly happy with people coming in for coffee or to see the store without engaging with any sales representatives or looking at any products.
"If you aren't a customer, we would love to have you," Seidenfaden said. "Come in and learn and connect and we hope that over time because of that, you see that we're a great company to be with."
Chuck Sudo contributed reporting from Chicago.