Retail is creating a stir with a new take on physical stores: shop-in-shops. This store-within-a-store model is popping up everywhere, from big-box chains to department stores. Major retailers are teaming up to create mini stores and brand displays inside their larger stores to mutually increase foot traffic and sales across the board. Shoppers love the convenience of having multiple brands under one roof and stores are eager to improve the shopping experience with these unique partnerships.
What is a Shop-in-Shop?
A shop-in-shop, also known as a store-within-a-store, is exactly what it sounds like – a smaller branded retail shop located inside another retailer’s space, complete with its own products, branding and sometimes even dedicated staff. The shop-in-shop concept lets a brand create a boutique presence inside a host retailer in a distinct area with its own retail store design and store signage to stand out.
For example, a department store might host a cosmetics brand as a mini-shop in its beauty section, with that brand’s logo signs, displays and even checkout. The retail shop-in-shop approach allows two brands to share one space while each keeps its identity. It’s a clever combination of visual merchandising and strategic retail design by using custom signage, such as SEG fabric, fixtures and decor so the mini-shop feels like its own little store, but still complements the larger store around it.
Image 1: Sephora shop-in-shop store inside a Kohl’s retail store. Image 2: Disney section located in Target store.
Why Are Shop-in-Shops Trending?
Several trends are driving the rise of shop-in-shops. First, retailers are finding creative ways to maximize their space and offer more variety. By inviting partner brands in, a store can instantly broaden its appeal and product mix. It’s also a cost-effective strategy: the smaller brand avoids the huge expense of opening standalone stores, while the host retailer fills out empty or underused floor space.
Both sides benefit from improving the shopping experience; in fact, many retailers report higher traffic and sales after launching shop-in-shop initiatives, such as Sephora locations inside Kohl’s retail stores. In one case, Macy’s saw toy department sales skyrocket 15 times higher after introducing Toys “R” Us shop-in-shops. These results show why the trend is booming: shop-in-shops make stores more interesting and can smooth out slow periods by giving shoppers new reasons to visit.
Benefits for Brands and Retailers
The shop-in-shop concept creates a win-win situation for the brand and the host retailer:
- For brands: It’s an easy way to get a physical presence in high-traffic stores without opening a full store. The brand gains access to the retailer’s existing foot traffic and customer base, which helps increase exposure and sales. It can test new markets at a lower cost and risk. The mini-shop format also allows immersive branding with tailored displays and retail signage to tell the brand’s story.
- For host retailers: Partnering with a popular brand can refresh the store’s image and draw in new customers. The host retailer broadens its assortment (for example, adding a beauty or toy section it didn’t have before) which improves the overall shopping experience. These collaborations often increase time in store and repeat visits – new shop-in-shop customers at Kohl’s visited twice as often as average customers. The host may earn additional revenue through rent or profit-sharing and see a lift in sales.
Examples of Store-in-Store Success
Real-world examples of shop-in-shop partnerships are everywhere in 2023-2025, across different retail sectors:
Sephora at Kohl’s
One of the most talked-about collaborations, this brought Sephora’s prestige beauty mini-shops into hundreds of Kohl’s stores. Launched in 2021, the partnership reached 850 Sephora at Kohl’s locations by 2023. These beauty sections mimic a standalone Sephora with dedicated Sephora signage, lighting and product displays. Kohl’s reports beauty department sales jumped over 100% after adding Sephora and is attracting younger shoppers into Kohl’s.
Disney at Target
Target teamed up with Disney to create magical “Disney Store” corners in Target’s toy aisles. Starting with 25 locations in 2019, the Disney shop-in-shop has expanded to dozens more Target stores. Each features Disney signage and fixtures filled with toys, costumes and collectibles. This partnership also coincided with Disney closing many of its standalone stores, making the Target mini-shops an important way for Disney to reach shoppers in person.
Lids in DSW
Footwear retailer DSW (Designer Shoe Warehouse) joined forces with Lids, the hat and sports apparel retailer. In 2021, Lids opened mini-shops in 45 DSW locations across Canada, with plans to expand into the U.S. These in-store shops feature Lids’ branded sections selling baseball caps, jerseys and sports fan gear alongside DSW’s shoes. The partnership makes sense: a customer shopping for sneakers might also grab a matching hat. DSW gains extra product categories to entice shoppers (especially younger sports fans) and Lids reaches customers in off-mall locations.
Ulta Beauty at Target
Another big-name beauty example is Target’s deal with Ulta Beauty. By 2023, Target had opened over 600 Ulta Beauty shop-in-shops inside its stores. These Ulta sections are like a mini cosmetics store within Target, complete with Ulta’s signature orange signage, dedicated beauty consultants and a range of prestige makeup brands that Target didn’t sell before. The move broadened Target’s beauty offering (letting it compete with specialty beauty retailers) and gave Ulta a way to reach shoppers in new neighborhoods.
Image 1: Toys “R” Us shop-in-shop located inside toy section of Macy’s retail store. Image 2: Ulta Beauty inside Target.
The shop-in-shop wave is transforming modern retail. In a time when retailers are looking for an edge, this concept delivers fresh experiences and efficient growth. By blending brands under one roof, stores become destinations where shoppers can discover more in one place. The formula is powerful: combine smart retail design, strategic partnerships and engaging retail signage to create a unique space that excites customers.
As this trend continues to expand, brands and retailers are collaborating to add to each other’s offerings and keep brick-and-mortar shopping fresh and exciting. It’s clear that store-within-a-store setups are here to stay and underscore the importance of great signage and design in bringing retail visions to life. Contact 40 VISUALS today to step up your shop-in-shop with custom retail store signage that creates an impactful store experience.
