Our Design Talk Roundtable series kicked off last month with a great roster of participants, and a really engaging audience of friends, entrepreneurs, creatives and small business owners (design trade and otherwise!).
Jay Norris, my dear friend and co-host, and I are indebted to the participants of this Roundtable No. 01. Their advice and their stories ring true, pertinent, and helpful in navigating a new and continuously shifting sort of retail paradigm.
Here’s to the wisdom of:
- Malene Barnett, of Malene B. Atelier
- Maxwell Ryan, founder of Apartment Therapy Online Media
- Darin Vest, head of Retail Real Estate for L’Oreal Americas
For those of you who couldn’t make it to the Roundtable, I’ve culled some nice snippets from the discussion below. I’m figuring out what to do with the full audio file as we speak, and would love your suggestions! Would you listen to it as a podcast? Would it be helpful to have select sound bites posted online, for reference? Let me know in the comments section below!
Internet sales are still, as of August last year, only 8.9% of gross retail sales in this country. So it’s not doing all the damage.
Department stores are down 25% from the last decade. Most of the ten thousand closures that happened in 2017 probably happened in the mall setting. So street [retail locations have] become more relevant.
Even heritage brands are now looking for a way to get new customers in their stores.
We were able to push people and help their careers, which was a big part of what excited me about [Apartment Therapy]. But in terms of selling stuff [on Apartment Therapy], that has been a bit of a mystery. The only shift that I’ve noticed is the rise in affiliate sales.
The social media avenue for someone like myself is the main marketing tool for us, because it allows us to connect directly with our client.
ON THEIR PERSONAL STORIES
As people started jumping ship from print media, they started blogs. I fell into it sideways. I was a teacher, and then I started a service business called Apartment Therapy to help people with their homes in New York.
[When] I started in 2004, I certainly was not changing the world. I was in the design business. And the design business was very, very slow to get with what’s happening [online]. There was this stubbornness. The resistance [to the Internet] was amazing.
Let’s go back to 2009. The goal was to have a store and create a business, but as an independent business like myself, that required inventory, and that required a higher investment in product, and so I had to think – so what business model is going to fit where we are financially? The made-to-order model fit. Then I had to focus on who was going to be able to afford that – and it was going to be trade.
Let me go back another ten years. I used to work in this thing called the music business, when Napster came around. I saw that happen, right in front of me. We were there, we had a job, and then we didn’t have a job. So I saw that disruption.
ON BRICK AND MORTAR AND SHOWROOM PRESENCE
As a brick and mortar storeowner, we have become showrooms for people to discover what they like. You want to be accessible at least enough for people to learn that you [and your products] exist, knowing that they may not be continually coming back to repeat purchase in the brick and mortar. You need to [do] brick and mortar strategically, and have a strong online, omni-channel presence. They work together now and you never know which channel the actual purchase will be made on.
I still get the question, do you have a showroom? The Internet is great, but there are challenges. You could have the best pictures, the best videos, but people will still email you and say, do you have a sample? On the other hand, the Internet has allowed smaller designers like myself to create a brand, to create a presence, and to have an e-commerce store where we are able to, in our own way, attempt to have a retail store.
What’s interesting about what’s happening right now is that regardless of whether you were an Internet brand or started off as a brick and mortar brand, everyone is coming back to brick and mortar. Even Amazon, with Amazon Books slated to open 50-ish stores in 2018. I was surprised to learn that they’re actually doing it to sell books!
I think everybody is really trying to figure out where they should play and how they should play in the brick and mortar space. Nobody is looking today, in general, to sign the same [long-term] lease they would have signed last year, even. Something we do is figure out, what’s the commitment that you want to make as a retailer, today, in a space. Because of that, and because we understand that this world is still relevant, you have to figure out how to do it in a way that makes sense for your business and the exposure you need to have.
You might buy [something] the second time online. So that’s the important thing, that you have this place where you can reach the customer and engage with the customer and really give them a sense of what your brand is and what it’s about and have them experience that on a deeper level than you can online, and hopefully win that customer for those repeat purchases.
ON SOCIAL MEDIA
One of the hardest things to create [is] social media capital and rabid fans, and that’s one of the things that makes you valuable at this point. Right now, I think mobile and social media are impacting sales dramatically, and if you’re not strong in that area, you’re sort of missing the marketplace. This holiday, it was something like 70% of sales were touched by mobile.
[For me], they aren’t buying from my social media; they use it as a resource. It’s not just about selling the product, it’s about creating that experience for people to connect with your brand. If you have product and it’s beautiful, I want to see people shopping and buying that product. I want to see video of your store, I want to see close-up, I want to know how you source your product.
10 or 15 years ago you could have a store, you could have a name over it, and it was known for a look. And that’s not enough anymore. People are identifying with brands because of a story, because of a lifestyle. And there’s nothing better to represent that than a person. That’s a very interesting shift because that means that what’s happening in retail is no longer about selling a thing – maybe this was always happening but we just didn’t know it – it’s about selling the life [you] relate to. That’s definitely happening, and social media has just accelerated that.
I know how powerful Instagram is for marketing my business. The key is understanding how the social works and how you’re going to make it easy for yourself. I plan my posts in advance – you guys will see it if you follow me! For a designer like myself, I have to do it everyday. The editors are on social; I’ve been contacted numerous times for pieces.
ON THE POP-SHARE RETAIL MODEL
I’m seeing what’s going on in the market, and my tenants aren’t trying to expand anymore. As a broker, I had to figure this all out. Michele, a dear friend, she comes to me, and she’s looking for a guest shop in her space. She’s done it a couple times, like a retail roommate; she’s proven the concept. I said, this is great: short term, a test, the deals are [shorter]. Sometimes they date, then they get married and have a long-term, harmonious [retail] relationship. [So] I went to the drawing board, and realized we had to build a marketplace for these brands. So, sort of like Airbnb for retail, or Tinder for retail, that’s what Guesst.co is.
Brands will be able to onboard their products for [other] brands to look at. It will have that Tinder element to it: You can only talk to each other if you like each other!
IN FINAL CONVERSATION
It seems like there are two things going on: where people purchase and where people discover things is changing. And so a retailer like Bloomingdale’s or Macy’s is having a hard time. But if you leave that aside, if you talk about brand power, do you think there’s a shift in terms of people wanting to identify with new brands so strongly now that we could find ourselves in ten or twenty years where the brands we grew up with are literally gone, and the brand that was born in 2018 is as big as Macy’s?
The short answer is tons of old brands are going to go away, and tons of new brands are going to come in and become dominant new brands
And the cycle will be faster.
I think the difference is the ability to be nimble. That’s pretty critical.
A big part of what the Internet has done to retail that has impacted it quite significantly is that it has removed the sense of urgency completely. And so the brick and mortar phenomenon that are having the biggest successes are because they’re creating a sense of scarcity. You have to act now. It’s [brands like] Supreme that have lines around the block when they do a product launch. They only produce a limited supply and then hype the heck out of it on social media. Talk about rabid fans!
As you know by now, ultimately, I’m concerned with creating a sustainable new paradigm that allows small companies to scale. In fact, issues involving scalability, financing, the perks of brick and mortar versus e-comm, and more will all be part of our next Design Talk Roundtable: Realities of And Distinctions Between Owning a Business and Running a Storefront. Save the date for Tuesday, May 8 during NYCxDesign, and look for a formal announcement in your inbox soon!
MV (and Roundtable friends)
As told to Emily R. Pellerin
You can watch (or just listen) the full video here: Design Talks by MV x Guesst Roundtable no. 01
I’m still figuring out what to do with the full audio file as we speak. What do you think? Would you listen to it as a podcast? Sound bites? Do you prefer video? Comment and let me know!
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