The news: Ralph Lauren is expanding its hospitality empire, with plans to open a new Polo Bar restaurant in London in 2028, joining outposts in New York, Paris, Chengdu, Milan, and Chicago.

The play: Ralph Lauren’s hospitality business—which also includes over 40 Ralph’s Coffee shops worldwide—is becoming important to the company’s growth strategy, despite representing a small share of revenues. While not everyone can afford an $800 Polo Ralph Lauren jacket, coffee shops provide an accessible entry point as well as an opportunity to keep shoppers engaged with the brand.

Such shops are a handy way to drive traffic to stores and get shoppers to consider purchases they wouldn’t otherwise make.

• Coach strategically positions bestsellers like its Tabby and Brooklyn bags to ensure visibility while customers wait in line at its cafés, the brand’s North America president, Leigh Manheim Levine, told CNBC.
• Adding coffee shops to Coach stores has increased traffic and dwell time, and led to double- or even triple-digit sales gains.

Our take: With luxury sales under pressure as aspirational customers pull back, hospitality concepts give brands a way to engage shoppers and maintain heat. By courting social media attention and offering exclusive merchandise to build excitement, brands can create new reasons for customers to spend time (and money) in their properties.

But quality is key. While Ralph Lauren’s coffee trucks are Instagram-worthy, it’s the product that keeps customers coming back—and willing to wait in line.

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