Retail Strategy

Fashion-Forward: Unconventional Business Models for Modern Consumers
Fashion-Forward: Unconventional Business Models for Modern Consumers 1440 428 ASG

Fashion and apparel brands with unorthodox business models are shaking up the industry, challenging the status quo, and creating exciting new opportunities for consumers and retailers alike. From degrowth principles to the persistent rise of subscription e-commerce, we explore a few innovative, fashion-forward brands changing the face of the industry.

Modular Fashion

The fashion industry is constantly evolving, and one of the latest trends to take the industry by storm is modular fashion. This concept involves creating clothing that has detachable components, enabling a piece of clothing to have an extended life cycle.

Fashion brand Buhndi has embraced this trend by allowing customers to create multiple looks from a single garment. For example, customers can purchase a base garment that matches all the blueprints and add-ons available. As new blueprints are launched, customers can keep building their look, reducing the number of clothes they purchase and extending the life of their wardrobe.

WGSN, a trend forecasting platform, has identified modular fashion as one of the top five trends for the next decade, attracting and empowering customers who are looking for a more sustainable and cost-effective choice.

Accessible Fashion Styling

Stitch Fix is a popular online personal styling service that uses data and technology to curate a personalized selection of clothing and accessories for its customers. The company’s business model revolves around leveraging algorithms and human stylists to create a unique and customized shopping experience for each customer.

Stitch Fix‘s business model combines technology and human expertise to offer a personalized shopping experience for its customers, which is both convenient and enjoyable. By leveraging data analytics and machine learning, the company can provide a tailored selection of clothing and accessories that match each customer’s style and preferences, while also allowing them to try items at home and providing valuable feedback to improve future selections.

Degrowth Principles

Degrowth is a concept that involves a managed reduction of the economy to bring it in line with planetary boundaries and meet climate goals. It has recently entered the mainstream sustainability lexicon, and some fashion brands are embracing this approach.

Early Majority, an outerwear brand, operates on a community-driven membership model and applies degrowth principles to its designs to create functional garments that can be worn anytime, anywhere.

In a Vogue Business article, founder Hoy Howard said the brand aims to create clothing that is not only sustainable, but is also functional and fashionable.

“The functionality and aesthetic of each garment should be able to take you from the bike to the boardroom, or from the bar to the backcountry, and the brand’s community member fees will eventually contribute more to overall revenues than product sales,” he said.

This approach aligns with degrowth principles, which aim to reduce consumption and promote a more sustainable way of living. While some view degrowth as a radical concept, many scientists believe it is necessary to meet climate goals.

Subscription eCommerce

Subscription commerce is growing at an exponential rate. In fact, the global subscription e-commerce market size was expected to hit just over $120 billion in 2022. It’s expected to reach more than $900 billion by 2026.

Subscription commerce allows customers to sign up for a recurring delivery of a particular product or service, such as clothing, beauty products or food. Brands use data and analytics to personalize the subscription experience. This model increases revenue through upselling or cross-selling relevant products.This approach not only increases customer loyalty but also helps brands to reduce inventory costs and better manage their supply chain.

At one point, many of us participated in subscription ecommerce (think back to our magazine and newspaper subscription days). However, subscription ecommerce has evolved into a solid strategy for other types of retail brands to reach a broader range of customers. In fact, subscription brands grew their customer base by 31% in 2021.

Some of the most popular subscription brands on the market include FabFitFun, which has nearly 200 million subscribers and sends them curated boxes of six to eight full-size items of the customers’ choosing. Digital content subscriptions like MasterClass has 1.5 million subscribers and provides video lessons taught by professional instructors and offers a special section of classes on design and style.

One advantage of the subscription commerce model is that it creates a predictable revenue stream for brands. Instead of relying on one-time purchases, brands can rely on a steady stream of revenue from recurring subscriptions. This allows brands to invest in product development, marketing and customer service to improve the overall subscription experience.

Clothing Rental

Rent the Runway is a clothing rental service that allows women to rent designer dresses and accessories for special events or everyday wear. The brand’s business model is based on the idea that women can rent high-quality clothing at a fraction of the cost of purchasing it. By renting rather than buying, consumers can enjoy the latest fashion trends without having to worry about the high cost of ownership.

Rent the Runway has also recently launched a subscription service called “Unlimited,” which allows users to rent up to four pieces of clothing or accessories at a time for a monthly fee. This subscription model allows the brand to offer an even more affordable and convenient option for customers who want to keep their wardrobes fresh and up-to-date.

Secondhand Treasures

There’s the saying, “One man’s trash is another man’s treasure.” More and more retail platforms are embracing this wise advice–and building a brand in the process.

Thredup is a large online retail platform for women’s and kids’ apparel, shoes and accessories that allows consumers to buy and sell secondhand clothing. The company’s business model is based on the growing trend of consumers shifting their spending toward secondhand clothing, which is gaining market share at the expense of fast fashion, department stores and luxury brands.

A recent study found that the global apparel resale market hit $182.4 billion in 2022. That same research found that resale has grown 25 times faster over the past five years than the retail clothing market.

So how can companies profit from this business model? Thredup attracts high-quality supply without directly spending money to acquire sellers. Sellers choose Thredup’s managed marketplace to conveniently clean out their closets and earn a payout that can be received in the form of cash, Thredup online credits, select RaaS partner credits or a charitable donation receipt.

Unique Models will Continue to Emerge

While traditional business models still dominate fashion, there are several unique business models that are gaining popularity among brands. By leveraging technology and innovation, fashion brands can create a unique value proposition for their customers, which sets them apart from the competition.

These models offer flexibility, convenience, and sustainability, which are key factors that modern consumers are increasingly prioritizing. As fashion brands continue to experiment with new business models, we can expect to see more disruption and innovation in the industry, leading to more personalized, sustainable, and customer-centric fashion experiences.

Building a Brand Family
Building a Brand Family 1440 428 ASG

When Olivia stepped into the corridors of her local mall, she was on a mission to pick up a few much-needed clothing staples for herself and her kids.

Weaving in and out of stores like Aeropostale, Eddie Bauer and Forever 21, she found most of the items she was looking for on her list. For the rest, she would stop at a department store on her way out, where she could find favorite brands like IZOD, Volcom and Nine West.

Although Olivia visited at least four different stores and shopped half a dozen brands, like most consumers, she didn’t realize that each retailer she visited fell under a parent brand’s umbrella. In other words, she essentially shopped at one company—a brand family.

In her scenario, the parent brand was Authentic Brands Group, a brand management company whose portfolio spans various industry sectors, including entertainment, sports, and beauty and wellness.

While each merchant carries different products and features a unique personality, vibe, and characteristics that are entirely their own, they all fall under the same umbrella organization.

We all have our favorite store or brand, but the above scenario begs the question: Who owns it? You may be surprised at the answer, as well as how a multi-brand strategy can help brands become market leaders.

What is a Sub-Brand?

A sub-brand is a secondary brand that is associated with a parent company. Often, consumers are unaware of the connection, yet sub-brands are common in most industries, from food and beverage to electronics.

The Toyota Motor Corporation has several sub-brands, including Lexus, Hino Motors, Fiji Industries, Isuzu and Daihatsu. Madewell is a sub-brand of J.Crew, while Amazon owns Audible and Ring. If you’ve been to a mall lately, you’ve probably been tempted to stop at Auntie Anne’s, Cinnabon and Jamba Juice. They’re all under the parent brand, Focus Brands.

It’s easy to understand why it’s not obvious that these sub-brands are connected. Each brand has its own comprehensive identity that includes a unique logo, color palette, images and messaging. Each brand has its own target customer as well.

While some sub-brands coordinate closely with a parent brand for strength and credibility, other sub-brands stand entirely on their own.

Take Ben & Jerry’s, which is owned by Unilever, the same company that owns Seventh Generation, Dove, Axe and Vaseline. Ben & Jerry’s revenue is $450 million annually, yet the respected brand in the ice cream industry stands on its own as a highly recognized product. With a loyal customer base and a strong commitment to social and environmental activism, Ben & Jerry’s doesn’t necessarily rely on Unilever’s affiliation and resources.

Yet Unilever certainly benefits from having a successful company like Ben & Jerry’s under its umbrella, and for the parent companies that expand their product lines and target different customer segments, they often see the advantages like building brand equity and enhanced creativity across the entire organization.

The Success Behind Sub-Brands

A parent company doesn’t always begin as a conglomerate of brands. In fact, one of the primary ways a company develops sub-brands is through acquiring other businesses. Others may create a new sub-brand if they see a void in a market and want to capitalize. They may also have organizational goals to target different customer segments.

Regardless of the reason behind developing a sub-brand, companies recognize that having multiple sub-brands can provide many benefits, and ultimately, success.

New Revenue Streams
Sub-brands offer a unique way to unlock new revenue streams. Companies may use them to differentiate products or see an opportunity to expand into new categories. In 2000, Abercrombie & Fitch acquired Hollister Co., adding a new brand concept that focused on a “laid-back California lifestyle.”

Other times, a company may deliberately create a different sub-brand to reach a new niche or market, as Abercrombie & Fitch did in 2022 when it announced an all-new activewear sub-brand, YPB. YPB stands for “Your Personal Best” and advertises itself as a fashion-forward yet functional activewear for men and women.

Deeper Connections
Sub-brands also create deeper connections with specific audiences. By better connecting with customers based on their distinct interests or values, companies can tap into the buying power of entire markets.

Since its launch in 2014, Aerie, a lingerie sub-brand of American Eagle Outfitters Inc., has achieved remarkable success through its #AerieREAL Life campaign. This international campaign aims to foster positivity and inclusivity by featuring models from diverse backgrounds. Photo retouching is forbidden.

The campaign has struck a chord with consumers, resulting in an impressive growth for both the brand and its parent company. As of 2021, American Eagle Outfitters Inc. has generated more than $5 billion in revenue.

In 2021, clothing giant Hollister introduced its gender-inclusive apparel brand, Social Tourist, in collaboration with TikTok stars Dixie and Charli D’Amelio. The brand empowers teenagers to discover their unique fashion sense and engage with their beloved TikTok influencers. Social Tourist’s inaugural brick-and-mortar store debuted on Melrose Avenue in Los Angeles, utilizing Leap’s technology. With Social Tourist’s potential to appeal to a younger demographic, Hollister can enhance customer involvement and potentially establish long-lasting loyalty.

Success, Even in Failure
Even when brands don’t find success in exploring new concepts without compromising their brand identity, they take away valuable lessons that can help them grow their businesses.

Lululemon’s launch of Ivivva in 2009 is the perfect example of this. The launch was aimed at expanding into the market for young girls’ athletic apparel. Although the brand was ultimately unsuccessful, Lululemon was able to learn some valuable lessons from the experience.

One of the key insights that the company gained was that the concept performed stronger when it was linked to the Lululemon name. Building on this knowledge, Lululemon has since applied its learnings as it expands into other areas.

For example, the company launched a men’s concept that focuses on athletic apparel and accessories, and it has also launched Mirror, a high-tech fitness equipment and content platform. In both of these cases, Lululemon has leveraged its brand recognition and reputation for high-quality products to establish itself in new markets.

Lululemon’s experience with Ivivva demonstrates the importance of brand recognition and the power of leveraging existing brand equity to launch new products and expand into new markets. By building on its reputation and focusing on high-quality products that align with its core values, Lululemon has been able to successfully expand its business and reach new customers.

A Multi-Brand Strategy: Top Trends and Benefits

If it ain’t broke, don’t fix it. It’s an old phrase used to express the idea that if something is working well, there is no need to change it. While this approach may be appropriate in some situations, it can also limit a company’s potential for growth and innovation.

In fact, a multi-brand strategy can provide numerous advantages to a company:

You increase your potential to expand your customer base. By offering different brands, a business can cater to a variety of customers’ needs and preferences, which can attract new customers who may not have been interested in the company’s previous products.

Cross-selling and up-selling becomes more effective. When multiple brands are available, it allows a company to offer complementary products and services to different customer segments.

You become the leader of the pack. A multi-brand strategy can help a company become a market leader. By offering a wide range of brands and products, a company can increase its visibility and appeal to a larger audience, which can lead to greater market share and revenue.

Internal competition is stimulated. Having multiple brands can stimulate healthy internal competition, which can lead to more innovation and growth.

Diversification reduces dependence. Building several brands allows a company to spread its risk and reduce its dependence on any one product or market. This can help the company weather market fluctuations and reduce the impact of any single product or brand failing.

A powerful tool for businesses, a multi-brand strategy offers many benefits. Yet it’s important to consider that having a successful multi-brand strategy requires careful planning and execution to ensure that the different brands complement each other rather than compete with each other.

Retailers are Banking on Buy Now Pay Later
Retailers are Banking on Buy Now Pay Later 1440 428 ASG

Today’s shoppers are used to recent innovations like BOPIS and curbside pickup for delivering products, and they want more payment options at the register too. Buy Now Pay Later (BNPL) solutions, also known as Shop Now Pay Later, caught fire last year, making up nearly 2.5% of the global eCommerce market, and the payment method is now catching on in U.S. brick-and-mortar stores.

Many retailers are now turning to BNPL platforms, such as Afterpay, Klarna, and Affirm, to create an alternative payment option for the in-store shopper. Retailers are using BNPL as a payment differentiator to diversify their target market and lure Millennial and Gen Z shoppers who love the contactless nature and budgeting muscle BNPL options provide.

BNPL 101

As inflation remains high, consumers are looking for ways to fulfill their holiday lists while overcoming economic challenges. Enter “Buy Now, Pay Later,” the modern-day reverse layaway option that allows buyers to get the product they need now, but pay for it later in interest-free installments. In most cases, a consumer makes an upfront payment or initial payment. The balance is then spread out over a predetermined number of payments. There are usually no added fees for the consumer unless the borrower misses a payment.

Are consumers using it? In a big way, particularly Millennial and Gen Z shoppers, whom retailers want to woo. With their general distrust in credit cards, many Gen Z shoppers like being able to budget for their goods post-purchase, without the plastic or a hard pull of their credit. That helps explain why BNPL loans grew more than 10 times from 2019 to 2021 and they have only been increasing.

A recent survey found that 48% of Gen Z respondents said they planned to use BNPL to pay for gifts this holiday season, other generations of consumers aren’t far behind. Nearly 47% of millennial respondents and 40% of Gen X respondents said that they plan to use BNPL to finance some of their holiday gifts this year. Only Baby Boomers bucked the trend, with 14% of respondents stating they intended to use BNPL for holiday spending.

Experience Driven Loyalty

In survey after survey, consumers consistently put “experience” at the top of their wants list when it comes to retail. And as retailers continue to refine their shopping experiences, they must empower customers to pay how much and when they choose. It’s the type of satisfaction that can drive repeat business.

Although the U.S. has been somewhat slower to adopt BNPL than retailers in Australia and Asia, it has certainly come in with a boom. In a recent podcast, Karen Strack, Senior Vice President of Transformation at Unibail-Rodamco-Westfield, explained how retailers can use BNPL as a positive differentiated experience that brings shoppers back.

“The powerful appeal of such payment configurations cannot be overlooked when it comes to reimagining the in-store shopping experience to provide consumers a better overall experience,” said Strack.

World Pay Head of Vertical Growth, Maria Prados, said in the podcast that the loyalty engendered by BNPL platforms was unexpected. “Buy-now-pay-later creates a lot of loyalty and community, which is very unusual for a payment method,” said Prados. “But 30% of shoppers won’t buy unless there’s a BNPL option. It’s the fastest-growing method globally.”

Strack also shared how BNPL can help consumers through the product lineup journey. “One of the observations that we have had is that a lot of the shoppers are graduating through that process. So, especially with a luxury client, they might actually just start with buying an accessory or a scarf. And then they start to really understand the value in that [they] can control their budget, and they’re graduating to handbags and higher-end prices. And from a retailer perspective, that’s creating lifetime value in your shopper. It’s a really big bonus.”

The Downsides

One of the biggest disadvantages for merchants is the fees associated with working with BNPL platforms. Some have fees as little as 1.5%, making this a great option for reducing credit card fees that they pay, which can be as much as 3.5%.

Another consideration is what the future holds for the BNPL industry. With a substantial increase in consumers taking advantage of this service, it has caught the eye of financial services regulators who are concerned about potential risks.

The Consumer Financial Protection Bureau (CFPB) warns that borrowers face inconsistent consumer protections—protections that are standard elsewhere in the marketplace. As more BNPL providers are creating digital profiles of users, the CFPB is also warning consumers about the risks that come with monetizing consumer data, including the threat to consumers’ privacy. As a merchant, it’s important that you work with credible third-party providers. It’s also likely you will need to stay on top of industry regulations to ensure you don’t play a role in any consumer protection violations.

Give Shoppers Control

Sure, the appeal of BNPL is the ability to spread out costs over time. But what BNPL really offers consumers is control, something consumers have been craving since the pandemic. Prados told Business of Fashion that the pandemic spurred retail five years ahead in innovation in a matter of months.

“While it will be painful for the industry and economy at scale, the situation allows for so much necessary innovation,” she said. “Payments can be an afterthought, but we are talking about the very end of your conversion funnel — it could not be more key.”

Big Brands See Return from Small-Box Formats
Big Brands See Return from Small-Box Formats 1440 428 ASG

What goes around, comes around—karma, boomerangs, design, and fashion trends. Retail experience is no exception. Small-format shopping has been on the decline since the dawn of big-box shopping, but could we be returning to our old ways?

You may have that one produce manager, cashier, or bagger you say hi to every time you stop at the grocery store. You might chat it up for a quick minute, but it’s hard to catch up when there are 50 people behind you waiting to ring out their thanksgiving turkeys.

Instead, if the store were smaller with multiple locations as opposed to a major central post, employees could give more time and attention to individual guests. The focus could shift from maintaining store operations to connecting with every person. This model allows brands to mold their shopping experiences specific to their neighborhood audiences and make a positive impact to strengthen brand loyalty. In this instance, shoppers no longer feel just like a cog in the machine of a running corporation; they feel like truly valued patrons.

People like to be acknowledged, appreciated, and made to feel special. We’re currently facing a brand renaissance in which consumers expect brands to interact with them personally. Brands represent human qualities, values, beliefs, and actions—all of which are now part of a brand’s messaging, shared with the public alongside their products or services.

Smaller-format stores that prioritize connection with the individual make us feel seen while humanizing the brand. More time to connect meaningfully with guests means more time to authentically sell the brand.

Retail with a Local Lens

Getting consumers to leave their houses these days has become quite the exercise. There better be a good reason to spend extended time at a business, whether it’s a unique offer, sensory engagement, or just a great shopping experience. Nordstrom local offers the typical nordstrom store features, with options for tailoring, alterations, gift packaging, and even a way to give clothing donations. Smaller floor plans and less space to fill allow brands to save money on fixtures and square feet and rather invest in valuable differentiators and experiences.

It might sound like common sense, but smaller stores mean less cost. Brands can use these savings to open more stores in an area, upgrade the finishes and features of a smaller store, or simply bolster the bottom line. Having smaller-format stores allows for the flexibility to enter very specific markets. Smaller locations also give brands a less risky way to enter new markets. Less space and investment keep brands from getting backed into corners, trying to make store models work where they don’t.

Locations specialized for the population fulfill the true mission of any retail business— providing a community with what it needs. Daily life isn’t quite the same in San Diego, CA, as it is in Portsmouth, OH— that’s obvious, and we’re watching our big-box brands evolve their business models and stores to bridge the gap.

In New York, Rent-a-Center has recently opened a small-format store to better serve a dense, urban population. By downsizing, customers in the city now have easier access to the showroom without having to travel out of the city to peruse a massive warehouse. Saving money on square feet, rent-a-center can invest in endless aisle technology for shoppers to browse the entire store selection with help from the in-store associates.

In the United States, Target has been unveiling small-format stores that serve smaller, walkable communities, such as college campuses. These smaller locations consolidate the communities’ shopping habits and needs into a convenient store location without wasting space on unnecessary product that doesn’t resonate with local shoppers.

Data-Driven Local Insights

Smaller stores mean less room for merchandise, but that isn’t necessarily a bad thing. We use countless tools and technology to curate our advertising, sales forecasting, locations, and more, so why don’t we apply revelations from the data we collect to specialize our product offerings? Sure, it might be used from time to time to sort in-store vs. online supply or create a few specially merchandized displays, but what if we truly listen to our consumers at a smaller scale? Trends vary and evolve across communities, so what resonates to one group might fall short for another. Rather than attempting to cater to a large swath of varying personalities and communities, we can use data to truly speak to our local consumer in the store.

Small-format shopping lets companies and store employees have easier control over store details and the ability to make the store their own. Bringing in local culture and personalities gives a human voice and touch to the brand.

Guided or option-based programs for stores to pick and choose branded assets provide structure while adding a customized look to the smaller space. Nike’s new concept, Nike Style, embraces local collections and unique environments to create intriguing customer experiences with different offerings at each store. The boutique-styled stores aim to provide customers with premium experiences over traditional wholesale.

Aesop has even taken the initiative to utilize local materials to imbue its spaces with the culture and history of the area. These stores that marry local culture and history with the brand and products intrigue customers and acknowledge shoppers’ roots.

With big-box stores going small format, shopping at every store has become its own experience. Our big brands are embracing this to encourage education, connection, loyalty, and reinforcement of the brand mission. Creating unique, localized experiences in smaller-format stores opens the door to a brand’s evolution of personality and substance.

How Landlords Can Help Form the Retail Future
How Landlords Can Help Form the Retail Future 1440 428 ASG

The way we all live, work, and shop is changing. The owners of the spaces in which we do all of that living, working, and shopping contribute to creating the future—with new experiences and spaces that attract new and innovative tenants.

With the retail landscape, culture, technology, and customer expectations in an apparent state of change, it’s time to create the retail future customers want, retailers need, and landlords benefit from. It’s no longer business as usual. How can landlords adopt a growth mindset and change with the tides?

Flexible Lease Terms Help Attract New Tenants

New retailers are coming to the neighborhood, and landlords have a great opportunity to attract them to their spaces. It requires a change in mindset because landlords must rethink lease terms to attract these new and innovative brands.

Right now, landlords can change the nature of their relationships with their tenants by not only demonstrating a willingness to be more flexible with terms but also increasing investments in infrastructure and safety. Landlords will also benefit from supporting the success of their tenants. For example, accommodating retailers with a reduction in lease length in exchange for a percentage of the retailer’s online sales could benefit all involved.

Sure, it involves a shift in thinking for everyone, but this is how we will begin creating the retail future that we want. Here are some of the ways landlords can adapt:

Shorter lease terms. Landlords are enticing tenants to spaces by providing shorter-term leases that include a variety of renewal options.

Contract flexibility. Retailers are skittish coming out of the pandemic experience and need more flexibility in terms of force majeure definitions and lease adjustments based on situations beyond their control.

In addition to offering shorter lease terms, offering certain concessions can help attract tenants, including:
• Rent deferrals
• Sublet allowances
• Rent abatement
• Options for renegotiating lease terms

At the same time, landlords can ensure that they are protecting their own interests by:
• Requiring approval of any sublet
• Adjusting percentage rent to include online sales
• Increasing pass-through costs for climate and safety related updates
• Delineating specific recourse should the tenant fail to pay or abandon the lease

Help Tenants Meet Consumer Expectations and Deliver Better Experiences

Consumers have higher-than-ever expectations of the brands from whom they purchase, and retailers are looking for spaces that support the promises they are making to their customers. Landlords who are open to a changing relationship with their tenants will have the opportunity to help reshape the future of retail to be more resilient and sustainable. To successfully do this, the process must become less adversarial and more open; landlords and tenants must learn to work together, or they all suffer. Landlords can help by:

Offering improved safety and infrastructure. Many landlords are investing in improved HVAC, redesigns to enhance BOPIS, and technology infrastructure to make tenancy more inviting for retailers who are also having to adjust how they serve their clients.

Investing in Sustainability. Retailers whose brands have made promises of sustainability will expect landlords to invest in solar panels and make other necessary changes to their buildings to better meet consumer expectations.

Remaining Spaces

Landlords are redefining the mix of businesses in their spaces by reevaluating how the space is used. For example, some landlords are converting space for retail health clinics, mixed-use spaces, and warehouse space for last-mile delivery.

“One direction for some malls is turning underpopulated sections into ‘digital districts,’ where ecommerce pure plays can try their hand at brick-and-mortar retailing in small-format spaces. The digital natives benefit from a curated location tailored to their audience, while the mall can advertise a slate of cutting-edge concepts.” – Retail Touchpoints

This is also a suitable time to reevaluate what kind of tenants are used to anchor your spaces. We’ve learned that retail spaces that are anchored by necessity shops – grocery, DIY – are more likely to remain solvent than ones anchored by outdated department stores.

The Pop-In Shop

Landlords with the willingness to be open-minded about what kind of shops occupy their spaces are also finding tremendous success with pop-ins, family entertainment, and co-working spaces. For example, empty spaces in neighborhood shopping centers lend themselves well to holiday-themed pop-in stores for Halloween and Christmas. These short-term, high-profit shops can be an ideal way to fill an empty space for the short-term. Start-up retailers are also enticed by the pop-in opportunities that let them test the waters before making a longer-term commitment.

Entertainment

From theaters and arcades to indoor paintball and laser tag, landlords that are welcoming tenants who offer entertainment value that keep consumers coming back have seen enormous success. These retail venues benefit other tenants as well, as once the customer is there, they may also want to shop, eat, and otherwise spend the day nearby.

Co-Working Spaces, Fitness Centers, and Ghost Kitchens

With more people working from home at least part of the time or working for themselves, co-working spaces are an easy way to fill empty retail space. Fitness centers are also becoming a popular way to fill empty spaces that attract consumers. And if the space has a kitchen, soup kitchens, shared kitchen spaces, ghost kitchens, pop-in food services, and other food-based organizations are jumping at the opportunity to leverage available retail spaces for innovative purposes.

Creating the Future of Retail, Together

As retailers grapple with the changing retail landscape, the way forward will require innovation, collaboration, and negotiation. The opportunities that come from all this change can be exciting, but it does make lease negotiations more complex than ever.

“Landlords and tenants must forge viable partnerships. Landlords need stores and associated rents to meet their obligations and, right now, many retailers need financial accommodation to survive. Even so, the tenant has a contractual obligation to pay rent. Once adversarial, the landlord/tenant relationship is becoming more symbiotic.” – Chain Store Age

Both landlords and their retail tenants require appropriate protections and guarantees. However, if both sides approach the negotiations from a collaborative standpoint rather than an adversarial one, both with an eye toward future successes, they can both thrive.

Operational Translation: Q&A with Rachel Williamson
Operational Translation: Q&A with Rachel Williamson 1440 428 ASG

DTC operations details are crucial but an often overlooked part of creating a great in-store experience. Seasoned retail advisor, Rachel Williamson of Running Great Stores, shares operational insights on helping DTC brands find success going from clicks to bricks.

Q: How did you get into the retail industry and why did you decide to make retail consulting your career?

Rachel: Retail was an “accidental” career. I was working my way through college, and I did what lots of other students do; I got a job in retail. I realized I was pretty good at it and I really enjoyed it. I decided to take time off before pursuing law school to see if retail was going to be my career.

I had a great role as a men’s buyer for a small company, and my career took off from there. If we fast forward over the last 30 years or so, I spent time working for iconic brands and I’m so grateful for that. They taught me lessons both on how to be an operator, and also on how to be flexible and resilient because those are, I think, characteristics that are vital to being successful in retail.

Q: Retail trends come and go, and over the past 30 years in retail, I’m sure you’ve seen quite a few. What trends are you seeing in the retail industry at the moment?

Rachel: The direct-to-consumer (DTC) customer is absolutely expanding the most right now. They are looking for guidance from people that have been working in brick and mortar because that is where they are growing.

My strategy is not a magic pill, but let’s say all things are equal: you have a great product and enough of it. You know how merchandising works. Your customer understands your message, your story, and your brand. Then we look at operations; the fundamentals of operations are always going to move you ahead from a financial point of view.

The biggest reason why businesses aren’t working or running the way they should be and having the output that they should have is that there’s such a lack of clarity.

Q: How do you help retailers on the store side gain the clarity necessary to be successful?

Rachel: We start by understanding the desired store experience and work back from there to clarify roles and responsibilities. We help them define what success looks like for each role. That is how we tackle it from the store side, but we often also need to look at the business operations side. We help them to be more strategic and prioritize. How a store operates and how the business operates are umbilically connected.

Q: When working with a DTC brand, how early in the process do you engage with them? What does the process entail?

Rachel: Typically, by the time I get brought in, the DTC brand is working with someone like Asset Strategies Group (ASG) to help them find the right physical space. As the location decisions are made, I begin to help them think through the customer journey and the experience that their stores will deliver. This is the starting point. The experience online is very different than the experience in brick and mortar. We help them think through this creatively, then it becomes more tactical. DTC brands know their product and their consumers love them. They have a great online customer experience, but they admit they feel overwhelmed about running great stores. We can help them address every aspect of running a store through our Retail Playbook™. Once retailers see this tool, their mind is eased.

Q: What do stores need to do after opening day to ensure operational excellence?

Rachel: Once the store has been opened, we train the team on what running a great store looks like. We implement the Retail Playbook™ with the store teams. The Retail Playbook™ answers questions like, how do I hire talent? How do I onboard them? How do I develop them? How do I deliver effective one-on-ones? What is my review process? What happens if somebody isn’t performing? It’s everything around the people pieces but also goes deep into how to engage the customer and KPIs to focus on as levers to pull to impact sales results. It is about helping teams understand the behaviors that deliver results.

The final piece of the Playbook is around operational excellence. This includes the operational components for keeping the store filled in, managing inventory levels, loss prevention, health and safety, and more. So every single process you can imagine for running their specific brand is now all in one place, in the customized digital Retail Playbook™.

For DTCs, their sense of relief when we get to this point is incredible. It is perfect for helping a generation of digital natives learn how to operate in brick and mortar. We are seeing amazing success with this formula.

Q: So, is the benefit of the Retail Playbook™ for DTC retailers that it includes a lot of things they just haven’t thought about?

Rachel: Yes. An example is inventory management. Sure, they’ve got a way that inventory is managed on their e-commerce site, but they haven’t thought about whether the same system can manage brick-and-mortar sales. They often haven’t thought about injuries and incident reports. How do we recycle here, and what does the city require? They don’t know what they need to be worried about and what they do not need to worry about.

The Retail Playbook™ also helps retailers understand the fundamentals of running great stores so they can operate consistently across locations.

Whether you started as an e-commerce business or as a brick-and-mortar store, the fundamentals are the same. Once they understand the fundamentals of running a store, they must execute consistently.

The problem is that fundamentals are not sexy, right? It’s boring to do the same thing over and over. As humans, we like to invent; we like to create. And some people are just wired that way. They don’t want to execute something that’s already been figured out for them. They want to tweak it and create a new way of doing it.

When this happens, the brand standards can be desecrated as the brand becomes defined by the manager who runs that specific location. If you have 50 locations with 50 managers doing it 50 different ways, you no longer have a brand. What you have is a bunch of stores that all run differently. A true brand wants consistency from location to location. Imagine how you would feel if you went into Mcdonald’s and your fries tasted differently than you were expecting. It isn’t a good brand experience. Those fundamentals are really where the excellence lies.

Q: In some ways, DTCs have a lot to learn about selling in a physical space, but are there advantages you see for DTCs moving to brick and mortar?

Rachel: The biggest advantages are that they have a product, they know what their customers want, and they have data to prove it. I could open a store tomorrow, but I don’t have a product to sell. I’ve got all the knowledge to run a great store, but I have no product. Am I going to be successful? Of course not. Likewise, you can have an e-commerce site today and the product is great. You’ve got a steady flow of inventory and everything you need to be confident in what you’re selling now. You’re moving into brick and mortar and don’t know the first thing. But is that something you can learn? Yes, easily.

It makes so much sense for direct-to-consumer businesses to move into the brick space because they already have the most important things–a great product and a business plan. Everything else is easy, and we can help them get that figured out. But if you don’t have the product, we can’t even have this conversation.

Path to In-Person: A DTC Guide for Physical Retail

See the Guide >

Q: You seem to love working with DTC brands. Why is that?

Rachel: The really cool thing about working with digitally native brands is they’re not saddled with “the way it’s always been done.” That thinking gets in the way of many companies and limits them unnecessarily. And even experienced retail managers say, “we can’t do it that way,” whereas DTCs have no baggage. They say, “let’s try it.” I think it has helped DTCs move into the brick-and-mortar space and be successful so much more easily than other retailers.

The other thing about direct-to-consumer brands is that they’re good at using design thinking as it relates to the customer. They are quite open about the customer and their challenges. They can evaluate how their business addresses those challenges and how they make the customer experience the center of everything they do. They have a more innate sense of how to use empathy to understand their customer’s pain points. I find that a very open way of thinking is beneficial to the DTC customer, and it makes the transition into brick and mortar super easy.

Q: What do you say to the people who proclaimed retail was dead during the height of COVID?

Rachel: While we were going through COVID, the media narrative was that brick and mortar was dead. I don’t have a crystal ball, but I have been in retail a long time, and the truth is, It’s never going to die. Sure, there are things we choose to have delivered to our doorstep, commodity items. But nothing replaces the fun of going out and having an experience and visiting retail locations and meeting and falling in love with brands.

This interview is part of our continuous DTC series, Path to In-Person: A DTC Guide to Physical Retail

See the Full DTC Guide >

Pop-Ups as a Retail Experience Lab
Pop-Ups as a Retail Experience Lab 1440 428 ASG

Pop-up shops have become a cure-all in retail business strategy over the past few decades. If done right, pop-ups benefit everyone involved, making them a no-brainer for many brands. Since they began popping up, we have watched them evolve as retail hubs, bolster marketing strategies, and even improve landlord-tenant relationships.

Revolutionizing Retail Hubs

Pop-ups started out as experimental, unique spaces for brands to test specialized customer experiences. Today, they’re revolutionizing street location shopping. Retail hubs have become modular and ever-changing; new, exciting businesses are constantly opening and revolving through these areas—making for a fun, fresh visit every time. Cities big and small have seen pop-ups appear in their suburbs or smaller neighborhoods, not just prime shopping districts.

Landlords and rental agencies have become open to shorter lease terms than have been traditionally available in retail spaces. These leases can be prepared quickly and are less-burdensome for the tenants.

Some spaces and agreements can be shared, cohabitated stores that rotate out regularly. These businesses can plan weeks or months to occupy the given space, execute their pop-up, then clear out for the next business. These shared environments work great for small business coalitions and artists especially, as they can offer lower rates with longer lease terms (offering the chance for multiple pop-ups over the lease term). This creates a win-win situation for landlords and tenants alike.

Striking Marketing Gold

Pop-ups are a goldmine for meaningful, interactive marketing for a brand or product experience that people want to share on social media. The idea is for shared content around the pop-up to create brand awareness and drive traffic to the pop-up location. Everyone wants to see fun, different shopping experiences, and consumers are apt to share. Executing a good pop-up is guaranteed to result in a wealth of valuable word-of-mouth marketing. A pop-up introduces the brand to people who otherwise might not have had it on their radar. The “exclusivity,” or more so the limited time aspect of a pop-up, amplifies consumer interest. Add this to the social media buzz, and you have created the perfect recipe for increasing brand awareness—the main goal of a pop-up.

Pop-ups are also a great way to experiment and test markets, consumer targets, specific locations, product, experience, and more. They offer total brand control and maximum brand exposure. Watching the ways in which consumers shop in a pop-up or how they respond to different experiences can give great insight into what works best for the brand in a given market. Working on the ground of a pop-up, employees interact directly with the customer base. These physical interactions with the brand are beneficial to a new retail business, making pop-ups an ideal business strategy for small businesses or new businesses entering the retail space perhaps after solely operating online.

Good for All Involved

We have seen all the ways pop-ups can benefit the businesses who execute them, but how do they benefit landlords and consumers? A pop-up could bring awareness to surrounding businesses, driving in-bound traffic. Say a shorter lease is about to expire, the landlord could openly advertise the space for rent at a pop-up event and receive far more exposure than if they were to run ads elsewhere. Pop-ups also assist landlords by filling vacant spaces quickly. Businesses might be able to get good deals on rent while the landlord fills their properties. These new businesses bring in money to the area and the public benefits from these ever-changing, interesting pop-up experiences.

Pop-Ups Actualized

Most brands have been taking full advantage of the benefits pop-ups offer, with countless remarkable experiences opening over the past few years, enticing the public to visit brand-curated spaces.

Lone Design Club works with independent brands to bring conscious consumerism-focused pop-ups to spaces around London. These pop-ups include layered experiences, such as vibrational sound meditation, professional panels on a variety of topics and industries, and community networking.

Ikea opened a “play cafe” in 2017 to rethink the way we use and view our kitchens. People could come in, enjoy some of their famous Swedish meatballs and play games with their friends and families.

Casablanca, a Paris-based luxury brand, held a travel/airport-themed pop-up within Selfridges, furnished with all the bells and whistles of an airport terminal gate. The popup let customers explore and discover merchandise set throughout the space while allowing Casablanca to test a physical retail store for the brand.

Many other luxury brands have been able to invest in the pop-up economy and are finding ways to evolve the landscape. In July 2022, Hermes held a gym-inspired pop-up in LA with live fitness classes, lifestyle-inspired merchandising, cocktails, live DJs, and more. These pop-up spaces give brands the endless freedom to curate specialized experiences to inspire, educate, entertain, or simply interact with guests. The L.A. experience is just one of several HermesFit popups around the world including Brooklyn, Tokyo, Paris, Bangkok, and more.

Here to Stay

Don’t expect to stop seeing them anytime soon, as modern pop-up culture has taken the retail world by storm and proven its value to retail strategy. Pop-ups are here to stay and are becoming more valuable as part of the retail ecosystem. They have revolutionized retail hubs and have benefitted all involved.

Retail Strategy: Scaling with Purpose
Retail Strategy: Scaling with Purpose 1440 428 ASG

Scaling: do it right and you win market share and brand equity; do it wrong and waste an enormous amount of resources and damage the brand. With such high stakes, it certainly would be nice to have a manual for this sort of thing. In the absence of a singular “right way” to scale, the retail strategy must come from the top.

As brands develop strategies for deliberate scaling, it is up to leaders to provide the vision and support to the scaling team. The strategy needs to be a living, breathing, evolving approach that is flexible enough to change in response to consumers and other industry shifts. Scaling is not – as evidenced by the struggles some brands have had with their approach – a one-and-done process.

Test, Learn, Adjust

Purposeful, deliberate scaling doesn’t just happen. It is the result of testing different markets, then adjusting the assortment, product mix, and operations based on what is learned. This method of expansion allows for customization without sacrificing brand integrity.

An openness to testing can lead to major successes and revelations. Home Depot has successfully and strategically scaled thanks to the leadership of its new CEO, Edward Decker. Decker has authorized testing of different store formats and different types of real estate to learn what works and how to scale effectively. His thoughtful approach has resulted in Home Depot being identified by Seeking Alpha as a “top-notch dividend growth idea.”

As we continue to explore retail strategy, it’s remarkable that no matter how much the retail industry changes, the need for strong leadership never does. Strong retail leadership is essential in developing a strategic approach to scaling a brand.

Take Smart Risks

The biggest lesson from Decker’s approach is that it includes implicit permission to fail. Experiment results are not guaranteed, so there must be an overarching message from retail leaders that it’s ok to test an idea, even if it doesn’t work out. Testing ideas allows retailers to see fallacies; sometimes, the outcome is far different than expected. That must be ok.

Deliberate scaling requires strong leaders who have a big vision for the brand—and can listen. Leaders who listen—to their teams, to their customers, to their colleagues—bring a level of open-mindedness about how, where, and when to enter a market. That open-minded approach lets them find the magic of retail; opening new locations comes with a variety of unanticipated challenges.

The Dos & Don’ts of Strategic Scaling

As we examine what works in today’s retail industry, there are good examples of what brands should do to scale deliberately, and examples of scaling fails that occur because of haphazard approaches.

The Dos

Vineyard Vines is a great case study of what brands can do to scale successfully. The leadership at Vineyard Vines is critical to its success. Brothers Shep and Ian Murray are hands-on founders, ensuring that when consumers walk into a store, they feel the EDSFTG (“Every Day Should Feel This Good”) lifestyle their brand embodies. The brothers have a clear vision of success for their brand, know exactly what their brand stands for and how to communicate it, and have a detailed understanding of their customer base.

The Murray brothers wanted to dominate their target market of suburban Boston market before expanding elsewhere. This start-small approach allowed them to expand thoughtfully while maintaining strict control of the brand. For Vineyard Vines, examining existing stores and lease agreements led to renegotiations that put money back in the company’s pockets to invest in smart expansion.

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The Don’ts

Even before the recent class-action suit against H&M, accusing them of misleading consumers about their sustainability practices, the company was struggling. H&M parent company CEO Karl-Johan Persson blames the retailer’s financial turmoil on “changes in customer behavior [in H&M’s physical stores], as well as “imbalances in certain aspects of the H&M brand’s assortment and composition (Forbes),” forcing it to close 170 stores. But that behavior change, along with the changes in the industry, offered indicators that, had H&M been more proactive and flexible it could have responded more quickly.

Photo of the outside of a Purple store location. Tenant representation support from ASG

What About DTCs and Strategic Scaling?

As DTC brands lean into the retail landscape, they also must consider carefully how to scale their brands strategically. Thoughtful consideration of the why and how, combined with the right data to know where and when, becomes even more critical when attempting to scale the brand regionally or nationally.

Purple, a leading DTC brand, first tested pop-up stores before investing in more than 100 retail locations with goals to continue to scale their brand both with their own stores and through partnerships with furniture companies like Raymour & Flanigan.

In an interview with BedTimes Magazine, it’s clear that leadership plays a strong role in the success of the scale. CEO Joe Megibow recognizes the magic of having a product no one else has but everyone loves. “Purple has made a meaningful difference in [customers’] lives,” says Megibow. “Our job now is to scale the heck out of our operation so that we can meet rising demand and satisfy even more customers.”

“Purple has made a meaningful difference in [customers’] lives…Our job now is to scale the heck out of our operation so that we can meet rising demand and satisfy even more customers.”

So What Does Thoughtful, Strategic Scaling Look Like?

In an interview with Inc. Magazine, co-author of Scaling Up Excellence: Getting to More Without Settling for Less Robert Sutton, explains, “Companies grow well and scale badly when they focus on running up the numbers, but not the quality. They get bigger and start to look like just any organization. And there goes the value.”

The author reminds brands that scaling is about more than growth, advising brands “to spread not just a ‘footprint’—their geographic and market presence—but also a ‘mindset’—the deeply ingrained beliefs and behaviors of their people.”

Thoughtful, strategic scaling may look different for each brand. What worked two years ago will not work today. Retailers need to meet customers where they want to be. Growth, without a strategic scaling strategy, can result in the dilution of the brand and a homogenous feel.

However, when done properly, strategic scaling starts with the right data—data that is relevant to the brand, its existing locations, its customers, and its goals. The market changes so much that up-to-date analysis, in-depth insight about customers by market, and flexibility are all crucial.

Connected Wellness: Healthcare as a Retail Opportunity
Connected Wellness: Healthcare as a Retail Opportunity 1440 428 ASG

The pandemic impacted the healthcare industry much the way it did education and retail; it helped accelerate technology out of necessity. Not only did the wearable device industry grow, but our idea of what health care can look like has changed considerably too. 

Now, we log in to our computers to talk to our doctors rather than spending time in waiting rooms; we upload our own health stats from our wearable devices rather than having a nurse take our blood pressure and pulse. In a world now reliant on self-service connected wellness, the healthcare industry is ripe for evolution. Here’s a look at how retailers can take part in the health revolution and what is driving changes in the industry.

What’s Reshaping Healthcare?

An aging population – According to SeniorLiving.org, “From now until 2030, 10,000 Baby Boomers each day will hit retirement age. Millions will begin to officially retire, collect social security checks and go on Medicare. Other Boomers will keep on working either out of financial necessity or out of some less tangible need like identity and self-worth.”

Telehealth convenience – Due to the pandemic, technology has advanced rapidly in the healthcare space out of necessity. 

“While the surge in telehealth has been driven by the immediate goal to avoid exposure to COVID-19, with more than 70 percent of in-person visits cancelled, 76 percent of survey respondents indicated they were highly or moderately likely to use telehealth going forward, and 74 percent of telehealth users reported high satisfaction,” according to McKinsey’s 2020 Healthcare Report.

The wearable trend – It isn’t so much about the wearables as the data. Consumers have access to their own medical data more than ever, which allows them to be more proactive in caring for themselves.

“With 76% of adults age 50 and older indicating a desire to age in place, voice-activated tools, such as home assistants and home health-care technology (emergency or virtual care) are relevant potential purchases for them. If offered a choice, over half (53%) would prefer to have their health-care needs managed by a mix of medical professionals and health-care technology,” according to AARP.

Creating New Health and Wellness Experiences

Today’s retail consumers want personalization and convenience, and health and wellness retailers have an incredible opportunity to deliver high-quality, personalized, and convenient care to consumers. Doctors’ offices can learn how to create a patient experience that earns loyalty and satisfaction by looking to retailers’ offerings. 

Like retail, medical providers must customize the entire experience—patients want to have access to information, manage their own care, choose whether they come in to see the doctor or have an online appointment.

Think of patients as customers who want to have a consistent experience no matter how they choose to engage. If they chat online with a nurse, they expect the nurse to have the same information the doctor would if they were in the room with the patient’s medical file. But more than just consistency, patients are looking for ways to be more proactive in managing their own health.

Retail Health Clinics

Since the early ‘90s, when retail health clinics began opening, consumers have benefited from—and come to expect—the ability to seek non-emergency medical care outside of business hours. It’s clear that consumers want the same kind of convenience with their medical care that they receive in other areas of their lives. Healthcare providers who offer convenient, local care are not only popular among consumers but also are expected to see major growth. 

Self-Service Healthcare

As a multitude of wellness wearables, connected health devices and apps are developed, there could be space for an Apple Store-like offering for a health-care device shopping experience akin to the Genius Bar. 

Empowering consumers to manage and monitor their own health could eventually mean they can use a wearable to obtain information, like an EKG on the go. That could free physicians to focus on treating patients in need while simultaneously giving more people the power to be proactive about their own health.

Health Meta—Taking Telemedicine to the Next Level

Industry watchers’ speculation about potential partnerships between retail and medicine is exciting. Think about existing retailers like CVS and Walgreens, who already provide vaccines, fill prescriptions, and offer blood pressure screenings. What if they were able to extend those medical partnerships to create a one-stop telehealth shop? The future could see patients who meet with telehealth doctors in Walgreens or CVS for proactive screenings, upload their data from their wearable devices and do a little shopping while their prescriptions are filled. 

Incorporating Health and Wellness into Retail Design

Incorporating health and wellness into retail spaces can also enhance the consumer experience. Healthcare retailers can win customers by offering wellness products in-store and providing wellness experiences, such as massage chairs, meditation rooms, or spaces to host conversations on wellness topics.

“It’s not just about a breadth of product options, it’s about continuous wellness support for the consumer’s home, workplace, workouts and lifestyle. Create dedicated sections for healthy morning rituals (smoothie makers, lunch boxes, yoga mats), daytime products (working, running errands, exercising) and evening needs (sleep aids, organic cotton sheets, dream journals),” according to Medallion Retail.

As innovation drives the health and wellness revolution, design will take center stage. Design impacts the patient experience, drives patient retention, and enables health providers to empower patients to be more proactive about their health. 

The possibilities are endless.

Layered Construction: The Challenges in Retail Design
Layered Construction: The Challenges in Retail Design 1440 428 ASG

Opening a new store is essential, whether a brand is opening their first or their hundredth. A new store builds excitement, embodies the relationship between the brand and their customer, and showcases what’s new.  Those brands that choose design-driven concepts have the advantage to ensure a unique experience that also performs in the marketplace. So imagine the frustration and expense, both in capital and sales, that occurs when store openings become stalled at every turn. 

The World Has Changed.  

The variables that drive retail design have changed dramatically. And it’s not just labor shortages and supply chain issues; every step, from location decisions, lease negotiation, early concept design, through to how one structures the build team can now be a challenge and needs to be considered more thoughtfully as a whole than ever before. 

“The complexity of the system eats itself alive if one part fails,

explains Ed Hofmann, Partner of Design and Strategy at ASG-Chute Gerdeman. “We find ourselves navigating decisions that spread across multiple layers and choices – literally as an extension of the Brand’s in-house group.  For instance, the ability to move with real ‘speed’ is now contingent on the ability to navigate thru 10 – 12 decisions at once, supported by only partial information.  You don’t know everything you need to know, so we are more and more relying on instinct, strong back up plans, and our relationships to move at pace.

Vendors are wanting more up front, work is taking longer, so we are value-adding where we can, for instance, helping clients on the tenant negotiation side to suspend leases or postpone payments due to uncontrollable delays. We place a lot more emphasis on streamlining the work leading up to the construction so that the build can go as efficiently as possible, such as separating the interior and exterior builds if we must – it creates 2 permitting tracks, but it allows work to continuously move forward, rather than being totally stalled.”  

Clients Crave Control

Clients know what they want for their store designs, but they are frustrated, simply by the lack of control. Delays are increasing due to factors out of the control of both the agency and the client. These delays don’t just add to frustration but increase spending on construction and payroll. Delays in opening lead to lost revenues. 

Neither clients nor agencies can defeat the supply chain, but the situation is causing clients to lose confidence not only in the agencies with whom they work but with their own internal teams and their vendors as well. And vendors, who are either protecting themselves or simply unable to move quickly enough due to the supply chain, are driving up wait times and increasing costs.

“It used to be you got to choose 2: good, fast, or cheap….but now it includes a 4th variable: just getting it done, and you’re allowed only one mistake,” says Hofmann.

Layered Construction in Design

On the execution side, layered construction is becoming more common to help overcome the challenges of supply chain and labor issues. But these challenges aren’t just happening with the storefront. A retailer may not be able to get the correct fixtures or all of the fixtures they need, so a layered approach is being used to help keep the client moving toward opening. 

Clients may be able to have some of the fixtures installed and use alternates for the rest while they wait for the remaining fixtures. They’re making do with what they can get – literally buying things off the shelf, at second-hand stores, or recycled from other locations as placeholders until the real elements arrive. 

For example, if the space has been designed with certain color-themed rugs that you can’t get right away, they find something that works, place it in the store, open the store, and then replace it when the actual items arrive. And it’s not just rugs – it’s light fixtures, window glass, paint colors, display tables, shelving – it could be anything. Now imagine the scale of that when it is multiple locations or multiple elements. Just to get the store open, the design team might have had to get fixtures at West Elm, Arhaus® Outlet, Wal-Mart, or even Amazon, as the first layer and then later, come back and add in the desired elements. 

Managing the Customer’s Experience 

This obviously isn’t the optimal approach, because the design is part of the experience for customers walking into a newly-opened location. In order to manage this “layered” experience will require finesse and transparency. So how the retailer positions the design choices they make will influence how it is received by consumers. 

The key to a successful layered construction approach comes down to closely following the brand intent, that powerful story, with thoughtful, perhaps temporary substitutions, back up plans and complete transparency with the client and often the end consumer.  The relationship between Brand and the people that love them is paramount – it’s our job to protect that and find a way to go above and beyond, delivering unique and powerful connections, sales, and memorable experiences. 

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