Store Innovation Watch: June 2018
New stores and concepts come across my desk all the time, so I thought it was worth sharing some of the ones that really stood out, and why. Here's a look at seven new retail concepts worth watching:
- The Pint Shop
A collaboration between the Museum of Ice Cream and Target, The Pint Shop is part experience, part brand launch, and part pop-up selling opportunity. I've heard people talking about the exhibit itself for several weeks now, and how "Instagram worthy" it is. What I didn't realize until I dug in a bit more is that it is also the launch of a line of ice cream flavors which will be available in Target stores.
I'm interested in this concept for two reasons. One, typically product launches like this have historically been heavy TV advertising by a brand, with the hopes that consumers eventually find it once the products reach them in distribution. I know there have been products I've been looking for – triggered by advertising (look, it worked!) – only to find that it hadn't made it into distribution in my area yet. Which, honestly, is a waste of advertising. It took me almost 6 weeks from when Diet Coke started advertising their new "millennial friendly" flavors before I was able to find it at my local grocery store. At some point, I was only looking for it out of stubbornness – as a consumer, I would've given up.
I don't know that The Pint Shop's flavors are going to be any more available, but I think it's interesting that they're focused on the experience first – and the word of mouth – before they start promoting any kind of wider availability. The anticipation is still there, but it doesn't come with an expectation of availability like something that is ad-supported does. I think it's fascinating how a different campaign, which is generating lots of organic coverage, creates a different expectation in me as a consumer, than one that follows the traditional route.
Two, this idea of "Instagram worthy," while seeming like a stunt on the surface, is becoming more and more important. In this case, The Pint Shop combined the retail experience with the installation experience (learn more about installation experiences here). This allowed people who were there in person an Instagram badge of honor, while also being able to take home a piece of that experience when they purchased a pint. I think we should expect to see more collaborations like this in the future.
- ShopUp
At Aptos, we've been watching the pop-up phenomenon for a while now. After seeing more and more internet (aka Instagram) brands eschew the traditional approach to retail stores, but still investing in physical locations through pop-ups, I started watching the trend more closely. ShopUp, in Tucson, is exactly that intermediary that is the next step to come to the pop-up space: think of it as "store infrastructure for the storeless." Startup brands that aren't big enough to have their own store rent space in ShopUp to get access to the bricks market without having to make the major investment that opening a bricks store requires.
The question for the long-term success of concepts like ShopUp is if there will be enough startup brands out there that they can sustain a steady stream of new products to try out in their stores. And how long is long enough vs. too long for a specific brand to be featured before customers get bored? Story, the NYC concept that Macy's just acquired, would change out every month, but it required closing down the entire store to do that – that's a lot of switching costs to take on monthly.
- Blue Apron Unboxed
Blue Apron is opening pop-up shops in a few major cities, starting in NYC. Supposedly, they are doing this in a bid to find cheaper ways to cement a relationship with customers, so that they can fight customer attrition without having to spend an arm and a leg on marketing.
From the pictures, it looks like a more upscale version of that short-lived fad of week-long meal-prep kitchens, where you went in on a Saturday or Sunday and prepared a week's worth of meals for your family, but in a community setting with other people. If that's true, I think Blue Apron is making a mistake. I think they should've opened a straight-up restaurant, as Kroger has with Kitchen 1883. You can hold cooking class-like events there as part of it, but the idea is to get people convinced that they will like the recipes. While they're at it, I would recommend Blue Apron take a page out of Nespresso's book, and offer to be a recycling drop-off station for existing Blue Apron customers, addressing one of the biggest critiques of meal kits that I still hear, which is that they are not environmentally friendly.
- Cover Girl Times Square
Cover Girl is opening a store at 30 Times Square in NYC. It's expected to offer manicures and makeovers, which is an upfront focus on services rather than on products. Cover Girl is a drugstore brand, not a high end one, which is the other reason why this one is of note. This would be like P&G opening a Tide store on Times Square.
I will be very interested to see how much experience and services take center stage, especially in a location not far from Sephora and departments stores that are investing a lot of money into upgrading their beauty departments. While this is more for creating brand connections than selling a ton of products, it will be interesting to see if a mass-market brand can deliver on a promise of services and experiences, especially in the high-test (and very, very expensive) environment of Times Square. Cover Girl is going to have to bring it if they want to be more than a glorified aisle outside of CVS or Walgreens, both of which are highly proximate to Times Square as well.
- Tmall/Intersport Megastore
If I had the opportunity to go to Beijing right now, I would. Because this is a store I would really like to experience in person. Tmall, a division of Alibaba, is teaming up with Swiss retailer Intersport to create a digitally-enhanced physical experience that will put Amazon Go to shame.
There's a lot more to this than Alibaba simply flexing its muscles in the Chinese market. Like ShopUp wants to be a physical store platform for brands to try out bricks & mortar retailing, Alibaba wants their New Retail initiative to eventually become the technology & physical infrastructure for any brand that wants to succeed at retailing in China.
To me, this could signal that Beijing is ready to take the lead in the innovation frontier in retail; and that is a trend worth watching.
- Tech companies opening retail stores
Two news items caught my eye recently:
- Google opened a pop-up store within a store in a Drake General Store in Toronto.
- Facebook opened a one-day-only pop-up store in Soho for Oculus Go.
When Amazon was rumored to be about to open stores/kiosks in malls, my prediction was immediately that it would be to sell Amazon technology and not much else. Retailers like Target had shown themselves to be generally hostile to Amazon as a tech vendor, because all the technology really does is tie consumers closer to the Amazon store. But it's also an education sell, and like Apple, I think Amazon felt like they weren't getting their due when it came to explaining what they were trying to accomplish with their offerings.
Will there be Google and Facebook stores in the future? Well, first, the only hardware that Facebook sells is Oculus, so it might be fair to say "Google and Oculus." But it comes down to the same challenge. If you want consumers to feel comfortable buying your products, then you need to make sure someone is there to explain to them how it works and why they want it. Traditional retail struggles at that, mostly, because they have simply chopped out any kind of value-add from employees in stores. Not even department stores can really support sales of complex products – not from a product education perspective, and certainly not in terms of support.
That leaves tech vendors to try to go it alone. And, like so many other companies dipping their toes in the retail waters, they're choosing to do so through temporary retail, rather than jumping straight into the deep end. We may very well see Facebook Oculus kiosks added to malls in time for the holidays…
- Reimagining the department store
Forty Five Ten is featured in this article and is described as the "new hot iteration of the department store." I think it's interesting that this concept, among others, is coming out of the Dallas, Texas, USA market – Dallas seems to be a hotbed of department store innovation, between some of the things that Neiman's is trying along with Forty Five Ten and its sister store, Tenoversix, and rumors of another concept coming to Plano sometime in the fall.
Now, I will readily confess that I have been duped by these kinds of rumors before. I thought Dover Street Market in NYC was going to be the reimagining of the department store (admittedly, more luxury) that we've all been waiting for, and when I visited that store, I was sorely disappointed. All hype, no substance (though the prices were certainly living in rarified air.)
I would really like to know what the future of the department store will look like. Is this it? I have no idea. But it is worth watching as companies try to tackle all the things that leave department stores struggling today.
That's my list of store concepts to watch for June. Stay tuned for July's take! And if you know of something innovative happening in physical retailing that you think is worth paying attention to, please let me know!
