the retail apocalypse is fake news 2.0
My very first post on retailfitness.com in early May 2017 was entitled “the retail apocalypse is fake news, and here’s why”. Six months later as we move quickly toward the holiday season, the headlines about the death of retail continue to dominate the industry news. I am always happy to see someone I know respond to a post about the topic, defending brick and mortar retail, but it can feel like we are on the offensive sometimes. I want to change that conversation.
There were a few recent store openings in the SOHO neighborhood of NYC that I had been reading about, so I bundled up and dragged by husband for an afternoon adventure to check them out. Here is what I saw in an hour on a Saturday afternoon…retail is thriving in new and really exciting ways. Here are just 3 examples:
Laure Heriard Dubreuil opened a multi-brand luxury boutique named The Webster in South Beach Miami in 2009. http://thewebster.us She has since expanded to Bal Harbour Florida, Houston, Texas and Costa Mesa, California. I have visited all of them in my travels, they are beautiful boutiques with nicely curated assortments. But this week she took a giant step forward and opened the largest store to date, a gorgeous 6 floor Flagship on Greene Street in a historic cast iron building from 1878, spending 4 years to renovate it.
The 12.000 square feet of fun begins with a first floor of gifts and jewelry, and as you make your way throughout the space, you encounter well-chosen selections from more than 200 labels- from Balenciaga to Thom Browne, Valentino and Vetements. There is gorgeous art and art-deco furniture throughout the floors, and the team was absolutely lovely, sharing all of the details about the building and their excitement about bringing the Webster permanently to NYC. They spoke to us about fusing art, architecture and furniture into a retail space to showcase the clothes and accessories. And people were spending money.
Why this is important? There is a significant amount of vacant real estate available around NYC, creating an enormous opportunity to choose a great location. I hear comments often about the “death” of retail when you see how much space is available; this is just one example of the next generation of business having a great opportunity to expand. Secondly, multi-brand businesses have a huge up-side today to shift their assortment based on trends. Once designer gets hot, you expand that brand, reducing another label who has become less popular. In a flexible space, you can grow shoes or handbags, then shrink it back down. You have complete freedom in how to drive your business. And most importantly, luxury retail is about touching, feeling, learning how to mix and match different designers together in your life. It gives you a reason to go to the boutique and build a relationship with the team, who can do the work for you and find that perfect next piece.
The Real Real
If you are not one of the many of fashion lovers who spend the day adding to your shopping cart on the digital luxury consignment store TheRealReal.com, then there is great news for you! Yesterday, The Real Real opened a permanent store on Wooster Street in NYC, the first one in its six-year history.
It’s a beautiful space, and the store will feature over 400 new pieces daily, as well as drinks and monthly installations from outside partners. Since all items on display are also available on their website to purchase (remember this is a digital consignment business), sales associates are using iPads to temporarily scan the product you are interested in and remove it from the website. I saw this live and in action working well and this was just day 2 of business.
Here is the most interesting part…the store was packed! Remember, these are luxury items only, not a mashup of random vintage clothing and accessories with a weird smell. I have sold things from my own wardrobe on their website, and I know how selective they are. It’s all the top brands, gently donated by their owners looking for their next adventure. And here’s an even more investing fact…since everything in the space is on consignment, the store spent ZERO dollars investing in inventory. Once an item is sold, part of the money goes to the Real Real and the rest goes to the owner. It’s brilliant, and a spectacular example of how retail is evolving today.
Why is this important? Similar to The Webster, there are great real estate opportunities in NYC that continue to be developed by next generations of businesses for permanent space. Secondly, this is a whole new business model that is setting a tone for continued re-invention of traditional formats. And again, they have created a reason to go into the store to find that perfect piece. Since there is only one of each and the assortment is constantly changing, the sense of urgency is greater to visit.
Canada Goose just opened its third company owned brick and mortar retail space in the Americas in Chicago, the first two were in Toronto and here in NYC in SOHO. Since 1957, their business was only done through wholesale accounts and their own website. Just last year they began opening their own stores, with a goal of around 20 globally.
The maker of $900 parkas just reported that they expect their direct-to-consumer business to contribute about half its profits in the long term, significantly up from the 14% currently reported. The company, which reported a bigger-than-expected profit in the quarter ended Sept. 30, also said operating income from its direct-to-consumer business, comprising own-store and online sales, was 18 times higher than a year ago.
But here is the thing…today in SOHO there were over 100 people waiting just to get into the store... to spend at least $1000! Canada Goose understands the value of trying on a jacket, having the complete assortment to choose from, and hopefully interact with a great sales associate that teaches them a few things about cold weather gear.
Why is this important? Canada Goose is investing in brick and mortar retail because they know the value of controlling the brand experience. It’s a luxury item with a specific geographic demand in a market dominated by only a few players. And the customers are showing up in a big way!
The lesson of the day…I am sharing my experiences with just 3 brands, just an afternoon out in one city. Retail is alive and well, you just might need to think about it a little differently, try a new approach, create a reason to visit, invest in your customer experience, and magic happens. I was really proud of our industry today, and the next time you hear about that apocalypse, tell them to just go out and visit stores on a Saturday afternoon.