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Design Exec: Understanding Human Nature is ‘Terra Firma’ in a Fast-Changing Retail Industry

In an exclusive interview, Executive Design Director of KTGY Phil Otto shares how cultural anthropology can drive innovation in store design.
Photo credit: Bnetto - stock.adobe.com

Phil Otto considers himself a bit of a nomad. He works remotely on a small farm in Ohio, although his office at national architecture firm KTGY is based in California. Prior to moving to the Midwest, he’s lived in Seattle, California and even France.

By title, Otto is Executive Design Director of KTGY. But by practice — and by passion — he’s a cultural anthropologist. That means he studies culture and how we as humans live, interact and respond emotionally and physically to the world around us in order to help brands shape their physical experiences. In this era of constant change, he believes deep anthropological study is needed if brands want to adapt and embed themselves into consumers’ hearts, minds and lives.

“I worked on the Urban Outfitters rollout when it only had street locations in college towns,” Otto said in an interview with Retail TouchPoints. “The next stage was to go to shopping centers, and the potential worry was that it was going to be a culture killer. But that didn’t happen because, although that kid they catered to met the brand when they went off to college, they also are from a suburb. It didn’t kill the brand; it was an honest moment to determine where people really were. When you do that kind of study, it frees you to think about who the end user is.”

Otto shared how understanding cultural context and adapting brand experiences to align with deeper consumer insights is shaping the future of store design and retail as a whole.

Retail TouchPoints (RTP): As a cultural anthropologist, what kind of lens do you bring to retail design projects?

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Phil Otto: Retail overlaps with anthropology because you have to start with people. You must think about how they live, and then think about the place and space. The rate of change is faster than ever — there’s more information and trends are moving faster. On the other hand, what doesn’t change is the driver of all that is human nature and the five senses. And you can make some very dependable decisions by looking at human nature. That is the terra firma in a world of change.

We flatter ourselves when we say certain generations have reinvented the world, [but] the Roman Empire didn’t act that differently than the current economy. People are still the same.

RTP: How can brands harness that essence of human nature to understand how their brand environments need to evolve?

Otto: You always want to go to the fundamentals and get beyond the surface that can be so changeable and scary. That’s how you become reactive. You want to understand the root causes that are driving change. Tom Boellstorff of UC Irvine in the Anthropology Department did some case studies on [virtual worlds] and he found that thinking this way, thinking about the “big data,” allows you to get to the pattern of events.

I had the good fortune of rebranding REI Co-op a few years ago, which culminated in the Lincoln Park flagship. It’s like a parking structure on a canal with a barge to try kayaks. It was all about the experience of the five senses. [The design was about] admitting that people might just buy it online; in some ways, they’re saying, Why even do stores? However, the store is where people come to try out an air mattress, to talk to someone about a trail in their area. It was really this brand immersion idea.

The more I was able to see their side of the curtain, the more we pushed the experience and the community and connection. They did some more stuff in the space, but it wasn’t all about buying stuff. It was more targeted, saying to the consumer “we’re here to help.” They may know that most of their customers are in the beginning of a sport or at the intermediate level, and they may outgrow REI and go to a specialty shop after that. But on that trajectory, REI is a trusted friend, so the main job of the physical space is to be a community center for consumers that are going to buy things omnichannel.

RTP: Are there any other brands doing this well?

Otto:
Anthropologie is another great example because they’re thinking philosophy first and then the specifics follow. They just got into furniture, and if you look up the best furniture experiences, they’re already in the top 10. In some cases, brands like CB2 are below them. Why is that? Arguably, Anthropologie isn’t as focused on furniture as their competitors, but they’re selling a lifestyle. And if Anthropologie says it’s a cool sofa, you know that it’s true and you’re committed to that lifestyle.

It’s a great example of a brand that starts with people. They know their audience and then they go to the culture and the lifestyle, and then the place, whether it’s digital or physical. They know what matters and what doesn’t. Because they always have that filter, their ROI is a lot better; they know where to put their money and it remains authentic. The storytelling and philosophy of the brand is embedded. They also do a great job of representing the local culture. You always have to think about how you blend in, speak the language and take care of the people there.

RTP: And what does this shift toward more community- and culture-based environments mean for larger commerce destinations, like shopping malls?

Otto: We’re not going back to the malls we saw before because we’re going through this big cultural adjustment. This is a massive change in the Information Age. We all know what the Industrial Revolution looked like — and this is what happens when you have all this information at your fingertips. We all have gotten used to a very user-friendly experience while buying things online. Physical reality is just going to have to match that; brands have to be as versatile.

Mall spaces are going to be more diverse; there are going to be smaller spaces that appeal to emerging brands, and then you’re going to see established brands invest further in brick-and-mortar. And now we’re seeing a generation of millennials that are nostalgic about mall rat culture, so these mall environments are almost becoming a novelty.

RTP: Are there any mall-type environments that you believe are truly innovative and aligned with our evolved needs as humans?

Otto: I’m seeing the most innovation in new approaches like Area15 in Las Vegas. It’s a great example of immersive, experiential retail growing from an artist-driven process. Similar organizations are looking to reinvent that kind of group experience. You go to Area15 so you can have this whole shopping experience that is very art-driven. By day, it’s very family-oriented and in the evening, it becomes very nightlife-driven. There’s a DJ and there’s a ring of bars. It really works the day parts very well.

Retailers can apply learnings from experiences like Area15. I was talking to Ingka Centres last year about their emergence into doing shopping centers and started talking to them about the 6×6 mall in San Francisco, which was a traditional mall just sitting there. Rather than doing the “big blue box” and the suburban green space, they’re doing more city center locations and applying this strategy that is more about reuse on a grand scale. They have one on Bloor Street in Toronto, they have the 6×6 in San Francisco. But then they also think of what the adjacencies are. They’re saying, “Let’s not do our own restaurant, let’s have a really cool restaurant that says something about values,” and they’re also making statements like Circuit, their sustainable DIY center. When they have dead space, they have a couple of in-house things they can put in there to keep the space vital.

RTP: How should technology play into these more enriching and community-based experiences? Is it a requirement, even for shopping malls?

Otto:  
Yes, I think that’s exactly where it’s going to land. Operators like Simon are doing it really well and I think it comes down to the fact that the most successful brands — the ones that we feel an emotional bond with — tell a great story. You like Nike for reasons that go beyond the shoe. It’s because they have the culture, and they invite great guest artists you like to do collaborations. And you like Spotify because they make these intelligent playlists for you, and they are doing more than selling you stereo equipment. In both cases, they’re showing up on your phone.

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