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Netflix Plans To Premiere Branded Stores After Trying Out Pop-Ups

Streaming Giant’s Brick-and-Mortar Retail Also To Feature Experiences and Dining

Netflix is aiming to launch its first two Netflix House stores — which will feature retail, dining and events — in 2025. (Netflix)
Netflix is aiming to launch its first two Netflix House stores — which will feature retail, dining and events — in 2025. (Netflix)

Here's a new kind of debut for streaming giant Netflix: launching U.S. stores.

The Los Gatos, California-based entertainment juggernaut plans to take the plunge on brick-and-mortar after experimenting with various kinds of retail pop-ups nationally. The first two permanent Netflix House locations are slated to premiere in 2025, officials at the streaming service confirmed to CoStar News. Bloomberg News first reported Netflix's plans, which include eventually rolling out the Netflix House stores globally.

The stores will hawk merchandise based on hit Netflix shows, as well as offering an in-house restaurant that will serve food and drinks based on Netflix's cooking reality shows or food or cooking themes related to the service's series. Netflix House will also offer rotating art installations based on the streaming company's shows, as well as live performances. The pièce de résistance, perhaps, in terms of so-called experiential retail will be the inclusion of an obstacle course based on the Korean-produced hit series "Squid Game."

The new venues will be the first multiple-title Netflix locations offering ticketed experiences, a food hall, dedicated retail space and a screening-event area.

Netflix is following in the footsteps of Walt Disney Co. in terms of trying to generate interest and loyalty to its programming using products and stores as well as finding new ways to monetize its content. Netflix already sells an array of merchandise related to its franchises, including such shows as "Stranger Things," "One Piece" and "The Witcher" — through a variety of outlets.

For several years now the subscription-based service has been looking for new revenue sources by trying out different temporary retail locations, from "Stranger Things" pop-up stores in various cities to Netflix Bites, a pop-up restaurant in Los Angeles. Permanent brick-and-mortar sites — offering merchandise, dining, activities and events — mark the evolution of that strategy.

The pop-up Stranger Things: The Official Store opened in Las Vegas in May. The pop-up has had stints across the nation. (Netflix)

"We've seen how much fans love to immerse themselves in the world of our movies and TV shows, and we've been thinking a lot about how to take that to the next level," Josh Simon, Netflix's vice president of consumer products, told Bloomberg.

Boosting Consumer Engagement

It's logical for Netflix to take a shot at becoming a brick-and-mortar retailer, according to Neil Saunders, managing director of GlobalData, a retail research firm.

"Netflix already creates a big buzz around many of its hit shows, so there is clearly an appetite from consumers to engage," he said in an email to CoStar News. "Quite how much they want to engage and quite how much they want to spend remains to be seen. However, it makes sense for Netflix to try and capitalize on this through physical destinations."

The streaming company is putting its own spin on a strategy that others have done, according to Saunders.

"Of course, none of this is new," he said. "Disney has monetized its content for years and has a very successful retail business through licensing, its own stores and shop-in-shop concepts. Netflix will be hoping to create a contemporary version of this — perhaps with more emphasis on experiences."

In May Netflix opened its roving pop-up, "Stranger Things: The Official Store," at the Showcase Mall in Las Vegas. It includes set pieces from the TV series, as well as exclusive merchandise related to it. That pop-up installation has already made stops in New York, Los Angeles, Dallas, Chicago, Miami and Paris, and is slated to remain in Las Vegas through 2024.

That's not the streaming company's only foray into pop-ups. This summer it debuted a pop-up restaurant, Netflix Bites, at the Short Stories Hotel in Los Angeles. That eatery, which was scheduled to stay open for three months, served cuisine featured on Netflix food-related shows.

A year ago, Netflix bowed what it described as its first "multi-title immersive shopping experience," with merchandise from across its programming roster, at The Grove shopping center in Los Angeles. It sold goods that included limited-edition items from "Bridgerton" and branded "Stranger Things" and "Squid Game" merchandise.

"This felt like the most organic next step to continue our growth and bring Netflix's most beloved shows together in a completely new way," Greg Lombardo, head of live experiences for Netflix, said in a statement at the time.

That location, at 10,000 square feet, was slated to stay open until January this year.

Naveen Jaggi, JLL's president of Retail Advisory Services, told reporters at the ICSC's annual conference this year in Las Vegas that TV programming providers were increasingly seeking to open pop-up shops to sell merchandise tied to hit TV shows.

“Remember the ‘Friends’ pop-up a year ago, which was really popular?” Jaggi said. “Well now you’re hearing about a ‘Yellowstone’ pop-up and other examples of this coming, where they’re talking about how they can leverage the fact those studios have an immense amount of money, an immense amount of capital. ... When the [TV shows] take off, how do you leverage it? You do a small pop-up or experiential store, to push that to the next level.”