The boutique concept originated in the jewelry and luxury goods market as a way to bring focus and prestige to a single brand. By selling just one family of products in a location, both sales and customer appreciation increase. Customers feel a greater sense of commitment from the brand and are unlikely to move on to a different brand.
Boutiques also function to control pricing for luxury products. Since they are either owned by the manufacturer or licensed under strict conditions, adherence to the suggested retail price is much more controlled. Boutiques will typically not discount products without permission from the manufacturer except in the case of established customer relationships or inventory clearance purposes.
Most brands set a standard for the architectural design of the store, the fixtures and furniture used, and require training and adherence to the company's product positioning. This lends a familiar feel for repeat customers and ensures that the brand is properly represented.
Boutiques exploded in popularity after 2010, with many brands establishing hundreds or even thousands of locations. The high-end brands were especially keen to open their own single-brand company-owned boutiques. Omega notably terminated relationships with many third-party retailers unless they were willing build a standalone boutique according to the company's specifications, following the lead of Patek Philippe and Rolex, among others.
Many retailers feel that this focus on company boutique sales hurts their customer relationships and market prospects.