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Blog / Oct. 25

Store Innovation Watch: October 2018

Nikki Baird

It’s October, and while consumers may be turning their thoughts to Halloween, retailers are firmly focused on making sure they’re ready to execute on the big winter holidays. That means that while there may be new innovations “discovered” over the next few months, the reality is there are very few retailers who are going to risk rolling out something new – something uncertain – right before the most important selling season of the year.

The result is that this month’s collection of store innovations is a little more eclectic than usual. There are a few startups, and a few established players trying something new. As always, there’s a mix of business model innovation, technology, and most important, new ways of engaging with customers in physical spaces.

  1. Holi Chow: Your dog’s data is not creepy
    Holi Chow is a startup offering custom-made dog food. It’s an online-only play at the moment, but this is one where I can see it will need its own stores or at least a store-in-store concept (and a partnership with a vet). According to this article, consumers fill out a profile about their dog, and can even submit blood test results, in order to get a vet-prepared custom food profile. Holi Chow will then deliver that food to your door.

    They don’t deliver to Colorado yet, which means my dogs get a pass at becoming guinea pigs. What I found most interesting about going through the experience was how all the reservations I usually have about sharing my personal information went out the window when it came to my dogs. You want samples of my dogs’ blood? Other than the weirdness of getting it (which is why I think they’ll need to eventually end up with vet-staffed stores or kiosks, to help consumers get over that), my response was “Sure, why not? If it gets them the ‘best’ food, of course!” It’s not like I have to worry about their health insurance going up based on their blood test results. Or that somehow their blood or DNA could be used to, I don’t know, crack open my bank account or something.

    So, this innovation is notable for how it exposes consumer thinking when it comes to data and privacy. If you offer something of value, then consumers are more than happy to hand over personal data. But when it comes to data that doesn’t even belong to them, at least based on my experience, they’re even happier to hand it over.

  2. Express Clothing Rental: Experimenting with business model
    I will admit that I’m late to this game. Express is following in the footsteps of Ann Taylor and New York & Co in launching a clothing rental service that is not nearly as aspirational as something like Rent the Runway. The service costs $69.95 per month for 3 items at a time, which is less than Ann Taylor’s offering, and more than NY&Co. There’s a lot of skepticism out there about whether a brand with lower price points can make rental work. I’m not convinced either, especially where brands are more likely to promote, discount, and mark down. When you do the math, $70 per month is nearly $850 per year, and at Express prices, especially during sales, you could easily get – and keep – 10-12 items per year for that budget.

    The other thing that attracts my attention with this concept is in-store execution. Will Express promote this in store? There are lots of reasons why they would not want to, number one on the list being the potential to cannibalize sales. Stores are not really attached to this idea, as it’s run by a rental service company (you can see that the three brands are using the exact same service by the look and feel of the web experience) – which means no pick up in store, no return to store, etc. It will be very interesting to see if this is a sustainable business for any of these three brands.

  3. NOBULL SoHo: Community and exclusives
    I admire CrossFit, but alas, it is not for me. So I don’t know a lot about CrossFit brands, but I gather from the excitement that NOBULL is a very popular one. The company is based in Boston, but is opening its first store in New York, in SoHo. The brand offers clothing and shoes. While there’s nothing necessarily remarkable about a brand growing in popularity to the point where it can support a store, NOBULL has taken a very modern approach to opening a physical space. There is a big emphasis on community, and acknowledging two distinct types of community: people who do CrossFit, as well as the trainers and gyms that teach it.

    The company is also resurrecting some past highly popular products that have sold out or lapsed production, as exclusives for sale in the store only. This idea of in-store exclusives seems to be as pervasive and lasting as the idea of adding in community space as part of your physical store.

  4. habitat by honestbee: The kitchen sink of grocery innovation
    habitat by honestbee is a grocery store concept in Singapore. When I say it is the kitchen sink of grocery innovation, what I mean is a play on the phrase “everything but the kitchen sink,” which usually implies that so many things have been piled on that it’s moved into randomness rather than purpose.

    habitat feels a bit random. Yes, it’s grocery and all of the components are grocery-related. There is the cashierless checkout, the dining area for in-store experiences, a lab/innovation environment where brands and technology companies can test out new ideas. There is even automated delivery of items you want off the shelf, delivered to pickup stations via conveyer belts. There are lots of interesting concepts here, but either I missed something in the description, or it lacks a cohesive story to tell to customers. Automation in and of itself is not a long-term brand promise to a customer, especially when you’re selling food.

  5. Amazon’s London Fashion Pop-up: When changing every month is not enough
    A few months ago, Macy’s acquired Story, my most favorite store that I have never been in. I’ve wanted to visit Story for a long time, but I usually only have any free time the weekend before the NRF Big Show – and that’s always the weekend that the company is changing over from January to February.

    It’s the great differentiator and the biggest thorn in the side when it comes to keeping stores fresh. Story would change over its theme – all the way down to the smallest item it sold – every month. This creates a built-in trigger to make a return trip, but it comes with a cost – a changeover cost. The store would close its doors for 2-3 days in order to execute the changeover. Losing 2-3 selling days every month is usually not an investment a store is willing to make.

    And then there’s Amazon. The retail/tech giant’s latest store is a fashion pop-up in London that changed out not every month, or every week, but every day. At one level you have to ask yourself, is that really worth it? Most fashion retailers, depending on how “fast” they are, count a season as anywhere from 6-12 weeks. At the ultra-fast end, you’re probably looking at a minimum of 2 weeks. Definitely not every day. Can consumers even absorb that much change? Can they devote the kind of time to keep up with a retailer that is changing things up every day?

    In the end, I don’t know that it matters. One, it’s Amazon. They’re going to attract a lot of hype right away just because of who they are. Two, the pop-up could end up being a total flop, and it won’t matter. Amazon is not afraid to try. And fail. It helps when you can afford to do that. Three, as with all trials that Amazon conducts, I always wonder if there isn’t some kind of ulterior motive, one that is operationally focused. In the case of a fashion store, there’s no better way to test out the ability to keep things vibrant and changing than by forcing a rapid succession of changes. Pressure tests help you find where the process is weak, and completely changing the theme of a store on a daily basis – and dealing with all of the inventory implications, staffing implications, supply chain implications, etc. – is one extreme pressure test.

    Will we see more Amazon fashion stores? I haven’t heard how this pop-up went, but my feeling is the answer is “yes.”

  6. Huckberry: Choose your own retail adventure
    I saved the best for last. This store is definitely going on my list to try to see the next time I’m in New York. It’s a pop-up store, but it runs from November to January. The concept is “choose your own adventure.” The store offers seven. Each adventure is exactly that: a pre-packaged trip, curated with an itinerary, discounts and special offers from stops along the way, and of course, the clothing and accessories to go with that itinerary. The company came up with the concept after wanting to push the boundaries of experiential retailing. I have a feeling this will either make you ache for your next vacation, or it will be yet another facsimile of an experience that, tried once, has no additional payoff. I’m definitely hoping for the former.