Posted by Diana Perry on Tue, Dec 11, 2018 @ 17:12 PM
Something’s Gotta Give – Permitting
The show was largely focused on digital native brands entering the brick & mortar space, something we’ve all been wanting to learn more about...and frankly, network with. In one session title, Brand Collection – New Leasing Strategy, panelists from companies XRC Labs, HiO, and Brand Box explained the latest trend in collaborating to test concepts, markets and properties with various retailers, many of which are trying out the U.S. market for the first time. A theme that no one could ignore was the issue and difficulty around permitting in the U.S. (cough cough Boston) making it even more difficult for brands and collections to test out the market. Pano Anthos, Managing Partner of XRC Labs explained, “We don’t live in a world that can handle that anymore” in reference to waiting four months for permitting. City and town officials are constantly pushing landlords to not sign chain stores and yet make it incredibly difficult and lengthy to get tenants in the space and open in a timely manner. The industry is really feeling this challenge and it makes you believe, something’s gotta give…soon.
Who Venture Capital Firms Are Partnering With & Why
Show me the money!...or show the digital retailers anyway. Retail in Focus, Follow the Money session focused on the opportunities and challenges strategic partnerships have between VCs and new retailers. Addie Lerner, Principal of General Catalyst blew me away in her to-the-point thoughtful explanations. Lerner describes the drivers for her company being, “online use, millennials, and high price of retail space”. Some of General Catalyst’s partners include: Outdoor Voices, M.Gemi, Naturebox, Rockets of Awesome, The Honest Company, Warby Parker and many others. They only work with brands that have the IT factor, “to be larger than life” she said “but the most important thing is to have executives that can execute quickly.” Clearly there are a lot of new brands looking for funding and connections to landlords but sometimes for us landlords, it can be tricky to find the right retailers so hearing from General Catalyst and Fifth Wall Ventures was very insightful.
Travis Boyce, Retail Lead of Allbirds shoes, a new product in the fashion industry, mentioned how fast they’ve had to execute in creating first five pop-ups to test markets and expanding globally to London, Australia, New Zealand and other cities. He explained his brand as absolutely needing brick and mortar space “to bring experience and authenticity and to tell their story in person”.
Two major take-aways from this session with Allbirds, General Catalyst, Fifth Wall Ventures, Foxtrot Delivery and Open Realty Advisors was that the retailers want to work with landlords that 1) Understand their world and 2) Can help with local permitting and other local logistics.
DATA, DATA, DATA and Fitness Gets Fancy
Data was a huge theme to the show this year. In each and every session, panelists were asked how they use data. From Equinox to Winky Lux, Dormify and Untuckit, all seem to be data junkies. The most universal response was that digital native retailers utilize their online database to see where customers are coming from to give them the best insight as to which markets they should open new locations. Many brands like Equinox are realizing how time spent has changed over time. Instead of going to the gym for just a work-out, data shows that members are staying much longer and enjoying work space and cafes. They even just launched E by Equinox, a new concept of ultimate luxury and concierge services offered for a mere $500/month plus extra for personal training. Apparently, their London and NYC E locations are thriving. Data showed their customers wanted more, will pay more and will spend more time there.
Winky Lux probably takes the cake for most data captured. Their concept has people paying to enter and experience their store, genius or idiotic?! For them, it has been wildly successful and has allowed them to capture tons of data across their: book a tour online form, scan your phone at entry, in-store gif maker, and does endless retargeting. In fact, Natalie Mackey, CEO of Winky Lux specifically mentioned, “one of the biggest misses in retail right now is brands not utilizing their store better to capture customer data”.
Dormify’s Co-Founder and Creative Director, Amanda Zuckerman said that she utilizes her customers and reaches out personally via social media/direct messages to source feedback as to where they should open new locations. As you can guess, Dormify specializes in dorm room and apartment furniture for women.
Untuckit takes a different approach to data and studies their current customers then tries to find identical audiences in various markets. The brand has 50 locations currently and is aggressively looking to open 50 more locations by the end of 2019. Untuckit very simply specializes in shirts that look good untucked and offers 51 sizes.
Many of the digital brands at NYDM mentioned “social saturation” when trying to market their brand however all also mentioned that they see social media as being a key driver for their business. In most cases, they were referring to the online popularity of social media ads growing and competing for eye-balls within the network. Youtube and Twitch live streaming platform were also mentioned as being top drivers for brands. In just about every session though, you heard companies talk about having an Instagram presence. Surprisingly, the Retail In Focus: Using Social Media, Influencers and Blogs to Grow Your Brand had hands-down the largest attendance of any program other than the keynote lunch presentation. This is a huge factor in showing how interested and eager to learn, retail real estate folks still about social media.
Landlord Says, “We’re Lonely”…What They’re Doing About It
In a time where we (eh-hem millennials) are buying less stuff and spending more on food/bev and experiences, EDENS’ CEO, Jodie McLean in session, Designing For Change, said her company is restructuring to build more human relationships at their center. McLean started the discussion by noting that nearly half our population is “lonely”. Clearly it’s difficult to measure happiness but she suggests by tracking crime, health, education and social interactions it may give us some more insight. EDENS has restructured to focus more so on adding gathering spaces, more art and boutique fitness. By having more group fitness events, people look forward to the classes and seeing the same people and building relationships from similar interests.
Moderator, David Glover, Principal – Retail Centers of Gensler shared some fabulous insight into what one of his California clients is doing. To spark social interaction, positive experience, and increase sales, the company has identified their center’s key customers and will reach out and say that they’ll send an Uber to pick them up as well as their friends and drop them off at the center and bring them back home when they’re ready. This is genius! Not only is this owner making more money in sales but is also saving parking spaces and even on having to build out more spaces in their lot. It’s obviously creating a VIP shopping experience as well in which these shoppers most likely won’t be going to other centers as often.
Is blockchain the future of retail real estate? Some say yes but that it has a very long way to go, especially in legal terms, mentioned Karen Bhatia, VP of Creative and Applied Tech of the New York City Economic Development Corporation, whom manages 66 million sf throughout NYC.
Jason Greenstone, Senior Director of Cushman & Wakefield is a big advocate of blockchain and smart contracts in mentioning how much easier it is to put contracts into smart contracts so you can simply modify small items. Cushman even launched a co-working app to make it easier for payment. Another example from Mo Shaikh, Co-Founder of Meridio, was how one retail space houses a book shop, a cafe’ and a clothing shop so there are three retailers in one space. Blockchain made it much easier to do these type of short term lease deals. Essentially, blockchain books spaces.