As e-commerce sales continue to balloon, there’s been much talk about what to do with physical stores. Are they showrooms, warehouses, hangouts, entertainment venues, fulfillment centers…or relics? Among brick and mortar-based retailers, the answer seems to be all of the former to avoid having them become the latter.
Speaking at the Shoptalk convention Tuesday, representatives from Nordstrom, which closed out February with 349 full line and off-price stores in the U.S., Sephora, which operates 430 stores in the Americas, and Appear Here, a new temporary retail concept, discussed how to they view their four walls differently.
Nordstrom raised a lot of eyebrows when it announced Nordstrom Local, a new concept that offers manicures and tailoring but no merchandise. The West Hollywood store is a place for shoppers to schedule stylists’ appointments, pickup and drop off online orders and generally just become steeped in the Nordstrom brand.
Shea Jensen, senior vice president of customer experience at Nordstrom, said the test location reflects Nordstrom’s belief that along with its people and products, its physical stores are among its key assets. “Now more than ever, the store represents an opportunity for customers to discover our brand, to engage with our people and to have moments of discovery around fashion, as well as we see the store as a place to curate experiences for our customers,” she said.
With Nordstrom Local, the retailer is also able to address a key concern that’s receiving a lot of attention from its department store peers: convenience.
“At its heart Nordstrom Local is addressing a problem because it’s not always easy to get downtown or get to the mall. What we were really trying to do, particularly in LA, is address the very real problem of accessibility to our services, people and product,” Jensen said, adding that 60 percent of Nordstrom Local customers are within a 4-mile radius of the store.
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For instance, Nordstrom welcomes all tailoring jobs, even for items not purchased from the retailer. “That’s proven to be an opportunity for us to expose ourselves to new customers who are dropping by because we’re now the local tailor in their neighborhood. We’re able to expose them to other services and product as a result,” she said.
At Sephora, the beauty purveyor performs a delicate juggling act, providing communal try-before-you-buy opportunities for those looking for a fun few minutes with grab-and-go functionality for shoppers on the run.
“We’ve set up an area that’s organized but is the world’s biggest playground that allows our clients to touch, feel, smell and experience all we have to offer,” said Bridget Dolan, senior vice president of omni experiences and innovation at Sephora. “Our clients want help and expertise…or maybe they don’t. Whatever they need from us, we want to make sure we’re leaning in and giving exactly what she needs.”
For shoppers in a hurry, mobile pay helps them get their beauty fix fast. While virtual try-on tools allow shoppers to linger and experiment with different looks. The software is also linked to the app, giving consumers the chance to keep playing—and potentially purchase—long after they’ve left.
Dolan emphasized that blending the service of the stores and online innovations creates the right mix for consumers who may want one thing one day, another on the other. “We’re all talking about time being so critical and we’re all talking about being on our phones. We all want to speed up but certain things we want to spend time on. So, it’s about leaning in and determining which things will help us with be more convenient and the things we want to really leverage having interpersonal experiences and having things you can touch and feel,” she said.
While both Nordstrom and Sephora are challenging what a traditional store can be, Ross Bailey, CEO and founder of Appear Here, is pushing the definition even farther. As the “Air BnB of retail,” Appear Here allows retailers—or any business or individual—to find available commercial space for short-term lease.
Bailey said many of the site’s users are tapping into one of the only real currencies left: consumers’ fear of missing out. By offering a pop-up shop, even brands that have an established, permanent fleet of stores can drive excitement just based on the element of surprise.
“Retailers are trying to be more interesting creating flagships that are incredible experiences or they need to go where the people are and be more surprising,” he said. And where they are is places like high-traffic subway stops, abandoned warehouses and even grungy men’s restrooms—all of which have been destinations for wildly popular pop-ups. The where is almost irrelevant as long as there’s an interesting, novel idea behind it.
Among companies that have used the service, Match.com opened a space not for commerce but for connections. The dating service filled one location with life-size, 3-D-printed replicas of men from the site, resulting in a huge spike in its online traffic.
The traditional model for leasing doesn’t lend itself to the direction retail’s headed, Bailey said. “Lease lengths are getting shorter. In 1992, the average lease was 20 years. Now, it’s four,” he said, adding Appear Here offers even greater flexibility. “It can take six months to open once you find a space. Instead of taking three to six months, it takes three to six days.”
Bailey thinks retail is moving away from the time when rent was a fixed cost, which could be a good thing given leases are often “the noose around their necks,” as illustrated by the number of stores in bankruptcy.
But even as the notion of “stores” evolves, Bailey insists physical locations will survive. For him, an analogy he heard drawing parallels from brands to religion seems apt. “What every brand needs—it doesn’t matter if they’re online or offline—they’re about a belief and they need people to buy into the way they see the world,” he said, adding physical stores, like churches, give people a place to congregate around a singular idea. “That’s why every single brand needs bricks and mortar.”