By Tristan Pollock, Co-Founder, COO, Storefront
“We would love to [open retail stores], but only if we can have a truly differentiated idea,” said Jeff Bezos, CEO of Amazon, in a recently published article.
When even Amazon’s Jeff Bezos is considering offline, the paradigm has changed. No longer is retail paralleled against the rise of e-Commerce and brands attempting to create their offline experience online. Now they are doing the opposite (think Warby Parker or Bonobos). Offline isn’t dead as some say, it’s cool again.
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And success offline isn’t limited to just the big retail players anymore. Makers, artists, designers and small businesses are all going offline in the form of pop-up shops, trunk shows, brand experiences and other types of retail events. Cities with strong urban cores have long been a hotbed for these experiences, so it should be no surprise when you hear that the entire temporary retail industry in the U.S. alone is upwards of $80 billion (source: The Ultimate Guide to Opening a Pop-Up Shop).
If you are reading this article, then you are probably know retail. You understand the hopes, dreams, and risks that come with the package. Whether you are an owner, operator, merchandiser, or wholesaler, there no longer has to be a compromise of online or offline. You need to do both.
And you’re in luck. Using retail as part of your business strategy has never been easier. With average retail vacancy at around 10% in the U.S. there is a plethora of empty shops. To be exact, one in 10 stores in the U.S. is sitting vacant. Boutiques, markets and malls are also looking for unique products and experiences to bring into their retail space. With these changes, the definition of retail space is expanding.
Enter the pop-up shop and smart small businesses. There has never before been more motivation for collaboration and innovation in the retail sector. Stores and malls are renting out their space and local and large businesses are renting it, not for traditional five or 10 year leases, but for days, weeks, and months. This includes both product- and service-focused businesses creating exclusive offline experiences, testing markets, and trying out new ideas.
Overall, these business owners are doing this sustainably and making a healthy profits by activating the local economy and bringing products without barcodes to market.
RealTech And RetailTech
Never before has there been so many options available to tie together online to offline, or O2O as industry experts now call it. Tablets act as cash registers (Indochino, Warby Parker), giant interactive touch screens are browsable, shoppable stores inside stores (BaubleBar, Etsy), there are even stores that you don’t enter but literally “window shop” (eBay and Kate Spade Saturday).
One of the most interesting retail and real estate technologies draws a juxtaposition between online analytics services like Google Analytics and the offline store. The modern store is being run more and more like a web site — online traffic is foot traffic, unique visitors are individual shoppers, conversions are POS systems, and this information is capture via sleek, powerful devices placed in stores that monitor shopper behavior.
These devices can anonymously track shoppers mobile phones and relay if they pass in front of the store, the time they enter the store, their path through the store, and how long they stood at certain displays. Some of these devices are small cameras, Wi-Fi trackers or smartphones. Some may not even need hardware at all. The end result, businesses are becoming just as data-driven offline as they are online.
New Forms Of Retail
1. Lean Retail: Also known as temporary retail. More commonly mentioned in the mainstream media as pop-up shops, Lean Retail is the use of low-cost, targeted tactics using short-term retail space. It allows businesses to see if certain neighborhoods, or even streets, are sustainable. It also helps brands build relationships, track success, and drive their online revenue.
2. Multichannel: The act of using a variety of retail operations in such a manner that enables the transacting of a customer via many connected channels, including retail stores, online stores, mobile stores, and mobile apps.
3. Omnichannel: Multichannel’s descendant, Omnichannel Retailing is the method of using the strategy above in a more seamless way to the consumer experience through all available shopping channels.
All three of these retail strategies are becoming more commonplace among businesses and brands. E-Commerce is growing at a rate of 15% per quarter, but 95% of commerce still occurs offline.
We’ve heard cried that retail is dead, the shopping mall is dead and the future is online, but times are changing yet again. Once upon a time retailers wanted to replicate their offline experience online. Now they are doing the opposite. The retail industry is becoming smarter and more efficient. Smaller stores that are more targeted, tech-savvy, and selling unique local products and experiences will be the future.
Tristan Pollock is making retail accessible as Co-Founder and COO of Storefront, an online marketplace for artists, designers and brands to find and rent retail space.
