Stores as Experiences: Back to the Future

The Atlantic: “The funny thing about stores-as-experiences is that, even as a notion that is shaping retail’s future, it also represents a return to its past.” Tracey Deutsch, a professor of history at the University of Minnesota, comments: “Apple might be interested to know that the first post-WWII malls often used similar rhetoric about public squares. Victor Gruen, who designed Southdale (the first indoor mall) and who really created the look for many of these shopping centers, saw himself as creating new public space.” Gruen based his vision on “the ancient Greek Agora.”

“In the 19th century, the creators of early department stores, too, were attuned to the experiences of shoppers, particularly the middle- and upper-class women they catered to. Deutsch notes that these stores had cafes and tea rooms in which customers could rest, along with plenty of attendants to help carry any purchases.”

“The journalist and historian Marc Levinson offered another historical precedent for experiential retail … the Great American Tea Company, which set up a coffee-roasting plant in Manhattan’s Greenwich Village in 1865, aimed to dazzle people walking by with its sights and smells. (Levinson says the idea was inspired by the spectacle of P.T. Barnum’s nearby American Museum, which displayed live animals and freak shows.) Levinson comments: “A few years later, the company … played up its supposed connection with Chinese tea growers by painting its stores in vermillion and gold leaf, adding Chinese wall hangings and oriental lanterns, and turning the cashier’s station into a pagoda. Customers were meant to experience a bit of China as they bought their tea.”

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J. Press Store Revives Its Yalie Roots

The Wall Street Journal: Preppy clothing retailer J. Press said it is trying to ignite U.S. sales by opening a store in the Midtown Manhattan building that houses the Yale Club this October … The proximity to the Yale Club represents a homecoming of sorts for J. Press, which began by selling ties, belts and odd trousers near the school’s New Haven, Conn., campus in 1905. The brand is known in preppy circles for its embroidered collegiate logos and cocktail-themed accessories such as needlepoint martini-themed cuff links.”

“The move near the Yale Club is one of the biggest investments for the brand in a long time, according to Jun Murakami, chief executive officer of Japanese company Onward USA, whose parent owns J. Press. He added the Midtown space is expected to generate 25% of total U.S. sales. Mr. Murakami also said he forecasts 30% of J. Press’s sales will be generated online in the near future, and the company hopes to increase that number to 50% by relaunching its website and boosting its presence on social media.”

“Marshal Cohen, chief retail analyst at NPD Group, believes J. Press has a ‘tremendous opportunity’ because the brand is still strong with U.S. consumers.” He comments: “The challenge is that they’re climbing up a hill selling tailored clothing in a casual environment. But there are times when the younger generation needs to get that job or go to a wedding, even in a less dressy world.”

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Dark UX: The Art of Online Addiction

Quartz: “Designing to encourage addictive behavior is a studied skill. Legions of designers are now learning the psychology of persuasion and use these tactics to make sites and apps ‘stickier.’ One of these schools is the Stanford Persuasive Tech Lab. Spearheaded by behavior scientist BJ Fogg, the lab teaches students about the tenets of ‘captology’ the study of computers as persuasive technologies.”

“Addictive, well-designed interfaces mean that UX designers are doing their jobs. And micro visual cues like a bigger ‘Buy Now’ button, or flashy testimonials, can be just as much value-neutral tools of the trade as they are tactics in the battle for your attention.”

“Dark UX is an industry term for sly design tricks that benefit the client’s bottom line. It ranges from creating defaults, such as a pre-checked opt-in email subscription or pre-selecting the most expensive options. It can also manifest in the form of interfaces requiring clients to supply their personal information before being allowed to look at the products on a website.”

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Augmented Reality Retail: Last Jedi ‘Treasure Hunt’

The New York Times: “Disney is billing a new entertainment experience as a free ‘treasure hunt’ for ‘Star Wars’ fans … Some 20,000 stores in 30 countries will offer an augmented reality event that will allow participants to uncover ‘Last Jedi’ characters.”

“You download the ‘Star Wars’ smartphone app and head to the mall. Participating stores … will have a placard on display that says ‘Find the Force.’ Point your phone at the placard with the ‘Star Wars’ app open. One of 15 ‘Last Jedi’ characters, including two never before seen, will appear in the room. They might even talk. If you come back the next day, the same display will reveal a different character.”

“The app allows you to take photos of the characters, record videos and share the experience on social media. Anyone who does so via Twitter or Instagram … is entered in a sweepstakes. The grand prize is attending the ‘Last Jedi’ premiere … The effort illustrates what it now takes to generate excitement at traditional retail outlets, many of which have been struggling as online shopping continues to soar.”

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LVMH: A Winner in Real-Life Retail

Axios: “LVMH, the French conglomerate and owner of brands Louis Vuitton and Sephora, had a 15% rise in first-half 2017 revenue, and that did not come by running fire sales — profit was up 23% … LVMH’s success is a reason for traditional retailers to despair as much as hope. The secret behind LVMH’s success is near total control of products from conception through manufacturing and sales, the opposite strategy of traditional mass-market retailers that largely act as middlemen and little more.”

“Next to Louis Vuitton, LVMH’s most important brand is Sephora, the beauty retailer that has been gobbling up market share in the $22-billion cosmetic retail industry. Customers interviewed by Axios raved foremost about the in-store experience, with freely accessible samples of any product absent any interaction with a salesperson. If shoppers want help, these customers say, Sephora’s staff is knowledgable and eager to find them the right look.”

“LVMH is demonstrating one formula for making a success of brick-and-mortar retail. That does not mean it can rest: Even high-flying luxury retailers like Louis Vuitton must constantly innovate as e-commerce matures and offers more products and more ways to buy them.”

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Brands Go Local To Beat Amazon

The Wall Street Journal: “As Amazon.com Inc.tightens its grip on retail sales, a growing number of brands are pushing back by championing local retailers. Some manufacturers are enforcing minimum advertised prices to make it harder for online sellers to undercut local merchants, while others give local stores first dibs on new products or funnel customers from their own websites to local outlets.” For example: “Luxottica Group SpA last year launched a minimum advertised pricing program that restricts the price at which its Ray-Ban and Oakley sunglasses can be advertised … The average discount on Ray-Ban sunglasses on Amazon has shrunk to about 3% as of this month from 37% in April 2016, according to Luxottica.”

“Free stroller tuneups are one way UPPAbaby, a Hingham, Mass.-based maker of baby strollers and car seats, draws customers back to local retailers carrying its products after they buy one of its strollers, which cost up to $900 … Running gear maker Brooks is testing a new app that uses an iPad connected to a treadmill to help local retailers determine which Brooks shoe best suits a runner’s biomechanics … Orb has a program designed to encourage local retailers to try out new products without worrying they might be saddled with excess inventory. At the end of each quarter, local stores can donate slow-selling items to a favorite charity. Orb then replaces the donated goods with new items selected by the retailer at no extra charge.”

“Arc’teryx salespeople use e-commerce sales data to help merchants determine which styles of clothing, shoes and backpacks are best sellers in their local market … If Simms Fishing Products had its way, the company’s waders and other fishing gear would never show up on Amazon’s website. The Bozeman, Mont., company doesn’t sell directly to Amazon, and its dealer policy specifically prohibits sales on third-party platforms … Simms employees visit local independent retailers and use computer-assisted design software to create customized Simms shops within each store.”

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Brick Sh*thouse: It’s not Amazon’s Fault

Business Insider: “Online sales are growing rapidly — up 15% in the most recent quarter compared to 4% for total retail sales. But total e-commerce sales account for just 8.5% of overall retail sales in the US. The other 91.5% of purchases are still made in brick-and-mortar stores, according to the US Census Bureau. So what’s sending mall and store traffic plunging, if most purchases are still made in stores?”

“Retailers expanded rapidly in the 1990s, blanketing the US with hundreds of shopping centers and strip malls under the expectation that demand would follow. Demand never quite caught up and then the recession hit, resulting in a sharp contraction in discretionary spending … Too much excess retail space has led to a drop in retail sales per square foot in the US.”

“Many retailers expected sales to bounce back after the recession. But that never happened for a majority of mall-based stores, primarily because people changed their shopping habits … Specifically, shoppers are buying more experiences than things … this trend, which has been particularly devastating to apparel retailers, is due in part to the rise of social media.” Consultant Doug Stephens comments: “Experiences make a better story on social media than things.”

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Sephora Studio: Where Small is Beautiful

Fast Company: Sephora “is tinkering with a new kind of store: an intimate boutique embedded in a neighborhood. The very first of these stores, which will be called the Sephora Studio, is launching on Newbury Street, the charming upmarket shopping street in downtown Boston, full of historic brick and stone buildings … While most Sephora stores make a big statement with their large storefronts, this small store attempts to blend into its locale.”

“At the center of the store, there are eight makeup stations where customers can book personal consultations. The product assortment is much smaller, focused on makeup, although there is a small selection of perfumes and skin care. Staff members will be well-versed in Sephora’s broader product range and may direct customers to products that can be shipped to them for free.”

“There are no cash registers, since staff members can process payments digitally, on their phones. At makeup stations, beauty advisers can take pictures of the client, then note all the products they test together, which is then emailed to the client and added to their online profile.”

“The brand is about to launch other small-format stores in similar shopping streets in Williamsburg in Brooklyn, Hoboken in New Jersey, and Washington, D.C. These stores will not replace the bigger store format, but rather complement them.”

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New England Scrambles to Save Country Stores

The Wall Street Journal: “For 203 years, the Francestown Village Store served its tiny New Hampshire town, selling everything from fresh-baked bread and live fishing bait to winter hats and groceries while offering a place where residents could gather and gossip. But the institution, formerly known as the Long Store, closed earlier this month … hit by changing consumer habits such as online shopping and residents who increasingly commute out of the town of 1,600 for work and shop at large grocery stores on their way home.”

Designed to provide everything rural residents might need, general stores often are packed to the gills with things ranging from tools and electrical supplies to fly swatters, newspapers, meat and other food, long underwear and maybe even a bottle of champagne. Many offer postal services and function as a town center, where locals debate political issues or find out who in the community needs help.”

“Vermont is losing three or four general stores a year, and is down to about 80 from more than 100 a decade ago … In Putney, Vt., the local historical society raised money to buy the embattled Putney General Store and in May took over the day-to-day operation there. In Bath, N.H., Scott and Becky Mitchell jumped into an auction last year and bought the historic Brick Store, which is so old that the sides of its counter are angled to allow women in hoop skirts to get closer to the merchandise.” Says Becky: “Customers come and say, ‘thank you for saving it.’ The town really needed it.”

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