The Outside View: Retail Isn’t Dead, It’s Just Boring

When I started my retail consulting business 12 years ago, department stores, specialty stores and retail developments were in a much different position than today. As the industry became fixated on e-commerce, many proclaimed retail to be dead. Retail isn’t dead, it’s just become really boring.

In the early Aughts, luxury brands became stronger and their desire to create a consistent image translated into an excruciatingly similar experience worldwide. This caused a chain reaction among department stores, malls and retail developers. Suddenly you had the same brands around the world, with the same store concepts, the same adjacencies and the same product whether you were in New York, Paris, Dubai, Hong Kong or London.

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And as digital became the new and exciting frontier, the stores all looked the same and the retail apocalypse sirens began to sound.

Now, I would never be so naïve as to ignore the importance of e-commerce, but the reality is that the customer’s desire to shop in-store is very much alive. A report by Forrester Research projects that in 2019, 13 percent of retail sales in the U.S. will come from the digital channel, while 87 percent will come from physical stores and 41 percent of those sales will be influenced by digital touch points.

This presents a real opportunity for department stores, specialty retailers, malls and retail developers to take a fresh approach toward physical retail in order to differentiate themselves. In our work with retailers and developers across the world in formulating these strategies, we’ve found the following elements to be crucial in the revival of retail.

Experiential

“Experiential” is one of the most overused words in retail today, but in order to get customers in the door, providing an experience that can’t be replicated online is key.

One of the leaders in this area is Selfridges, which has outperformed its competition in a challenging U.K. market. They provide a rotation of relevant pop-ups and activate customers in-store with interesting and provocative partnerships. Selfridges tempts the customer with experiences linked to product that the customer didn’t even know they wanted to buy. This requires vision, commitment and the guts to try something new.

In the U.S., Saks Fifth Avenue has shown a similar boldness in their Fifth Avenue flagship. In the midst of a massive renovation, they took a risk in executing a collection of wellness concepts like Con Body and Breathe Salt Rooms. While it was a temporary concept, it laid the foundation for the impressive relocation of their beauty department from the ground floor to the second floor. Given that beauty is one of the strongest traffic drivers, this was an unprecedented move that required real conviction and faith in a long-term vision to reenergize the overall flow of the store. They continue to champion unique experiences on their beauty floor, with the first U.S. location of Face Gym and Blink Brow Bar, both from London.

Inspire Your Customer

Call me a romantic, but I still think product is paramount. Customers also want to be inspired by the world that surrounds that product and brings it to life by telling a story.

An exceptional example of an inspiring environment is Matchesfashion’s 5 Carlos Place concept in London’s Mayfair. They have taken a 7,000-square-foot town house and made it into what feels more like a cultural center than a store. Customers can shop from exclusive product presentations that are refreshed every two weeks, meet friends and dine at their restaurant featuring a Michelin-starred chef from London’s River Café, attend events and listen to podcasts.

This confluence of culture and art has always played a role in inspiring fashion design, and now it is inspiring customers directly in-store. Louis Vuitton’s Place Vendôme flagship in Paris is another prime example. I walked through shortly after the opening and while I was admiring the artwork, the sales staff was able to tell me about each piece and provide me with a book they had printed as a guide to their art installations.

Similarly, The Webster, which was born during the early days of Art Basel, is no stranger to featuring art and design within their stores. Its highly edited and locally personalized concepts, along with innovative collaborations with retailers like Le Bon Marché and Lane Crawford, have set a new standard for the specialty store.

And we can’t forget Dover Street Market, a true retail pioneer. Many traditional retailers dismissed their opening in Manhattan in an unexpected area, but its creative approach to product and visual display consistently draws a customer looking for the unique sense of discovery they know they can find at each Dover Street location.

It has become obvious that the customer is craving an edited selection and presentation of product. This is confirmed by the success of Linda’s, the curated shop by Linda Fargo, and most recently, B. by Bruce Pask, at Bergdorf Goodman’s women’s and men’s stores, respectively.

The Key Ingredients: Food and Drinks

The customer today has never been more interested in and attuned to distinct dining experiences. Retailers and developers are capitalizing on this by incorporating innovative and unexpected food and beverage concepts into their environments.

Think about the Brasserie of Lights at Selfridges, a partnership with London’s Ivy Group featuring artwork by Damien Hirst. Or the first Stateside opening of the famed French restaurant L’Avenue at the Saks flagship, brought to life by the interiors of Philippe Starck.

Consider also the reimagined culinary offerings at Los Angeles’ Beverly Center. Its food offer ranges from restaurants like the new spin-off from San Francisco’s three-Michelin-starred Saison and Farmhouse, a unique concept from the team at Fig and Olive, to local fast casual spots including the famous Eggslut.

When it comes to the union of dining and retail, whatever the concept, the design must be great and the food even better.

Bringing It All Together

These examples show that there are endless approaches for specialty retailers and department stores to amaze the customer, but what excites me most are the opportunities for malls and retail developers to capitalize on this energy by getting creative in building or revitalizing their retail mixes.

I’m reminded of a recent trip I took to Asia with the chief executive officer of one of the most powerful and influential global luxury brands. As we walked the development, he said, “Whatever you do, don’t show me a space in the ‘luxury ghetto!’ I want to have a store where there is excitement and traffic, not where it’s predictable and expected.” Using the word in its literal sense as an isolated area, he was referring to the fact that the customer had become bored seeing the same brands side-by-side in the same area.

There is no room for formulaic, predictable or lazy approaches to store concepts and adjacencies. Whether you’re a department store, specialty store or retail developer, you have to inspire the customer through interactive elements like services, dining and exhibitions that use space in unexpected ways. Most importantly, the customer wants to see adjacencies and a brand mix that mirror their lifestyle.

So rather than writing retail’s eulogy, let’s start writing the next chapter.

Robert Burke is chairman and chief executive officer of Robert Burke Associates and was previously senior vice president of fashion and public relations at Bergdorf Goodman.

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