In addition to its traditional apparel and home offerings, the store ties in Los Angeles-based Amoeba Records shop, which sells more than 800 vinyl titles, and Tortoise & Blonde, an eyewear company with in-store "lensometer" that can scan a customer's glasses and read their prescription.
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It also features a bookshop—complete with seating for browsing titles—an instant photography shop that lets shoppers print their photos from Instagram, and its first full beauty outpost.
Joanne Podell, a vice chairman at commercial real estate firm Cushman & Wakefield, said the most important component to Urban's new store format is the coffee shop. That's because whenever a retailer adds in a food or beverage component, it encourages the customer to sit down and relax as they browse the store—meaning they're in no rush to leave.
Oxford Industries-owned Tommy Bahama said earlier this year that its stores with attached restaurants generate two-and-a-half-times more sales per square foot than those without them.
"You keep the customer longer, and what's better than that?" Podell said.
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Keeping the customer engaged is something the Urban Outfitters brand is aiming to improve. Although the company's Free People and Anthropologie units posted impressive same-store sales gains in the most recent quarter, of 25 percent and 8 percent, respectively, the company's namesake brand has lost traction among its younger shopper. For the same quarter, the Urban Outfitters brand saw comparable-store sales decline 12 percent.
In the company's earnings call, president and CEO Richard Hayne attributed the drop to the brand losing its fashion footing among its core 18- to 28-year-old shoppers.
"I... believe the stores and web look better than they did several months ago, but clearly, there is still much work to be done," he said.
In addition to the Urban Outfitters' new Herald Square location, it opened a store in Brooklyn earlier this year that includes a third-party rooftop bar.
"I think there's something to always making each [store ] fit the neighborhood," Hauser said. "But I think the idea of having a richer experience and a bigger experience is really cool, so if the customer responds to the ones we've done we'll probably keep doing them."
—By CNBC's Krystina Gustafson