"Stores within stores" is a concept often spoken but seldom understood. With retail closures on the rise we look at how real estate is adapting to new digitally native brands, how flagships are shifting focus, and how companies like Cushman and Wakefield are helping brands get to market faster than ever. Listen now!
A perfect storm in physical retail vacancies has led to an emerging retail renaissance.
Retail space is being utilized to bring a new experience to customers.
For brands to survive, retailers need to see the internet as collaborative, not competitive.
The most interesting store in the world is bringing new commerce straight to interested customers.
Community seems to be the future of commerce, can consumers bond over toilet seats?
The Retail Renaissance: The Re-Emergence of Brick-and-Mortar:
Brandon Singer of Cushman and Wakefield explains that there have been two factors that have led to an uptick in traditional retail space vacancies: The rise of the internet, and e-commerce, and an increase in the cost of renting and maintaining space in new york city.
Now, brands, as well as large tech companies and even some familiar faced traditional retailers are finding new innovative ways to utilize their space in a way that brings a sense of experience to their customers.
Brian points out that though the United States is one of the most over-retailed countries, retail is still on the rise in new and exciting ways.
Brandon makes the point that when the internet really started everyone said e-commerce was the end of brick and mortar retail.
Lots of brands are moving from online to brick and mortar even if they're traditionally online are realizing that having a brick and mortar location can help increase customer retention and in-store experience.
Phillip points out that in-store experience is also about entertainment.
Internet vs. In-Store: Collaboration Not Competition:
As Brandon points out, one of the biggest challenges for traditional retail is that they have historically seen the internet as their competition. Brick and mortar retail space with a value-added in-store experience combined with an online presence is crucial to success in commerce.
And this has actually been the downfall for those retailers who's decision makers have been unable to adapt, and consider the internet to be collaborative.
"New commerce: a new initiative that is taking advantage of the new age of commerce."
Brandon points out some brands that are doing this well:
Bonobos, a formerly e-commerce only brand turned retail space into a showroom, called a Guideshop allowing customers to achieve optimal fit and feel before having their purchase shipped to their home.
Warby Parker started out entirely online and moved into brick and mortar, and now has over 100 stores where customers can try on frames to best fit their face and their style.
Fun fact: Sears's business model actually inspired Warby Parker, which is ironic to anyone who knows anything about Sears.
Brian brings up the new Nike 68,000 sq ft flagship store, called the House of Innovation 000, which is all about the in-store experience, in just about every possible Nike-esque way.
The Most Interesting Store In the World: A New Kind of Mall:
One of Cushman and Wakefield's retail clients is Showfields, a direct to consumer retail outlet that in their own words: "We empower the brands of tomorrow with access to physical retail space at the heart of the direct-to-consumer conversation.".
Showfields is a different kind of retail experience and will be set up in a 14,700 square-foot townhouse in Noho (Manhattan) with a real focus on experience for the consumer.
Phillip points out that this has concept has been somewhat tried by single-owner companies like Citizen Supply, but poses the question of whether this will be an opportunity for clicks-to-bricks without a commitment by brands to a full store-front.
Brandon makes a comparison between ShowFields and co-working companies, who rent space to companies who don't want to have to make a significant investment in retail space for employees as they grow.
Phillip declares that: "experience is at the forefront and the opportunity to browse and discover is at an all-time high."
ShowFields is like the We-Work for physical retail space.
Community Driven Commerce: Making Shared Values Cool Again:
Amazon keeps trying to sell Phillip toilet seat covers because apparently, the push notifications for Chewbacca bobbleheads wasn't weird enough.
How community can really drive commerce: Phillip ponders starting a community for toilet seat seekers.
Brandon points out that community-driven commerce is becoming a huge focus in retail space.
For example Fithouse: a fitness studio on a mission to bring lovers of boutique fitness classes together at a much lower cost.
Who is the intended audience for a studio like this? People who already attend group-fitness classes, and share a love for fitness, but don't want to have to take on a hefty price tag for participating in that community.
Brian points out that Future Commerce did an entire episode on community-driven commerce.
Can Suburban & Rural Commerce Keep up With Changes in Retail?
Brians asks Brandon what if anything is happening in suburban and rural areas concerning commerce?
The program is called BrandBox, and it will give e-commerce brands unprecedented access to tools like foot-traffic analysis, and the lease agreement will only require a six to twelve-month commitment as opposed to a traditional lease of ten to fifteen years.
Also: Simon Property Group another major mall owner has partnered with Appear Here to bring Edit which is a new shopping experience which allows tradionally online brands to "pop-up" at their local mall.
And as Brandon says, once a brand has a successful pop-up-shop experience, it will lead to an expansion of a physical retail presence.
Brandon Singer's best advice for retailers going forward: Brick and mortar and online are not competitive they are collaborative. Also, create the best in-store experience possible, millennials are going to want to experience your brand, so build that in for your customers in a brick-and-mortar setting.
Go over to Futurecommerce.fm and give us your feedback! We love to hear from our listeners!
Retail Tech is moving fast and Future Commerce is moving faster.