Successful retail today often includes food, experiences, social elements, and isn't rote
I wrote about retail within the last couple weeks but last week the Washington City Paper had an article, "Can coffee and booze coexist with local retail?," about the rise in coffee shop + bike shop combinations.
I didn't think the conclusions were particularly scintillating.
Bike cafes might be "new" to Washington, but there are plenty of cool examples around Europe (this article from Time Out London lists 15, "London's best cycle cafés") and even the US--some killer bike-oriented bars in Iowa of all places, according to the Des Moines Register ("Beers and bikes popular along High Trestle Trail" and "Windsor Heights bike hub could have cafe, art, music") etc.
Also see the Duvine story "Coffee Bikes and Beer Bicycle Bars and Cycling Cafes Across America" from 2015 and this NBC News story from 2011, "Bike cafés brewing in surprising places."
Food + retail is not new. Kramerbooks and Afterwords Cafe, a bookstore-restaurant on Dupont Circle has been a premier example for decades.
Interestingly, in the early 1990s, Boogie's Diner, a food + apparel concept from Leonard Weinglass, founder of the now-defunct Merry Go Round clothing chain, opened in Georgetown but closed a few years ago. However, the Aspen sibling of the long since closed combo stores in DC and Chicago remained open until a few months ago.
1. Food yes, retail less. I mention all the time that since people eat and drink everyday, but buy other goods, especially specialty goods infrequently, retail districts are shifting towards food as a majority of the "retail" storefronts. This is abetted by a shift to e-purchasing of a wide variety of goods by the higher income demographics also most likely to patronize local shopping districts.
Sometimes I use the term eater-tainment districts to describe this.
Straight up retail can function, but only as a part of ever larger "regional shopping destinations." At the neighborhood scale it's much harder to pull off, with notable exceptions. In any case, it's much more boutique-y and the proprietor has to be satisfied with making a living, not getting rich.
Note that because of the shift to food as a greater proportion of "retail spending" narrow limits on the number of hospitality businesses that can locate in commercial districts as part of zoning regulations can be ill-advised, as it is hard to fill retail spaces with retail stores that don't exist (think of the destruction by e-commerce of various retail categories such as office supplies, travel agencies, camera shops, record stores, and bookstores to some extent.
I mention this because approvals for a restaurant in Cathedral Commons have been held up in part by a 20% limit on the number of restaurants in the development.
2. Convenience retail can hold its own, other categories not so much. Convenience retail, groceries and gasoline (impossible to purchase online), to some extent hardware and pharmacy, attracts customer who make frequent purchases. Other retail does not. E.g., I buy a bike every 4 to 7 years, and accessories infrequently, plus tune up and repair services, but I drink coffee or eat food every day.
So yes, adding coffee to a bike shop can make sense... just as it does for a variety of other retailers.
But plenty of retailers have been doing it for awhile, e.g., in a trip to Savannah years ago, I was impressed by an espresso bar at the back of Sylvester &Co. Modern General Store, a housewares store, and a coffee bar as part of the Paris Market store (clothing, accessories, and housewares), not to mention a coffee bar in a used book store.
Department stores like Macy's in NYC and Harrod's in London are known for the food halls, etc. Recently, Barnes & Noble announced they'd be expanding their coffee corners into more full blown cafes and Urban Outfitters bought an artisan pizza restaurant group ("Why Urban Outfitters Made Its Controversial Pizza Purchase," Fortune Also see "Why fashion retailers are staging food experiences," from Business of Fashion. From Fortune:
The move to buy Pizzeria Vetri, a pizza operator with just two locations in operation in Philadelphia, makes little sense at first glance. But analysts that weighed in on the results pointed out that Urban Outfitters and other retailers are suffering from a broader consumer shift in spending. People are spending less money on apparel, and more on trips, dining out and other “experiences.”Note that Ikea has long integrated child care areas and restaurants into their stores.
“Urban Outfitters has tested adding restaurants to select stores, and we believe these tests have proven successful, likely driving traffic and increasing the amount of time consumers stay in the stores,” said Stifel analyst Richard Jaffe. Jaffe added that there could be a great challenge of operating a new business to integrating it with what Urban already does.
3. Experiential retail. The trade publications are full of articles about how consumer interest is shifting to "experiences" ("The New Era of Experiential Retail," Stores) and retailers have to make their displays and approaches much more interesting as a result. Another element is linking the bricks and mortar to digital commerce.
charlie shares with us this article, "Mall Owners Push Out Department Stores," from the Wall Street Journal, about how shopping centers are getting rid of department stores and replacing them with food and what we might call other "active retail" concepts where customers are likely to patronize these businesses multiple times in a week or month instead of a couple times per year.
4. Social spaces as an element of commodified spaces and the experience. Rather than just focusing on buying stuff, now customers are looking for spaces to be in and around stuff to buy. That includes cafes within stores, places to sit, and fun and comfortable furniture, such as the chairs and sofas in places like Barnes & Noble or Starbucks, etc. Such spaces will migrate to more types of retail stores. How much of that will be digital as opposed to analog will be interesting to see how it plays out. Shopping centers are doing this too, in the common areas inside and outside.
Outdoor area at the OC Mix at South Coast Collection in Costa Mesa, California. Photo: Ana Venegas, Orange County Register.
5. Bifurcation in retail chains between unique and standardized spaces. I think this means that we'll be seeing more bifurcation of retail in terms of what is presented on the part of chains Chain retail, which has focused on standardization, will split out a set of stores/companies that remain somewhat standardized, especially among the big boxes, like a Walmart or Best Buy, while another set will shift towards differentiated, creative, special retail. It will trend higher end, e.g., Room & Board, and for higher cost items, e.g., Apple Store.
In some ways Urban Outfitters/Anthropologie has a been a leader in the differentiated/creative end of chain retail for awhile. Same with how LAB Holdings in Orange County, California has developed unique retail concepts and centers ("Most Influential 2014: Shaheen Sadeghi led an independent revival in Anaheim" and "Can anti-mall and Packing House developer work his Midas touch," Orange County Register).
6. Fast fashion/fast retail as experiential. Another element of "experience" in retail might be the "fast fashion" category ("Fast fashion leader keeps H&M at bay," Wall Street Journal), where stores like H&M, Zara, and now Primark frequently change their apparel inventory on a daily and weekly basis to bring in new looks and colors, and to get rid of what isn't selling. They price clothing relatively low, so that casual apparel segment has become somewhat disposable, rather than something you buy with the aim of wearing it for years and years.
The frequent change out of inventory makes it a form of experience retail because what's there today might not be there tomorrow and if you skip going to the store for a week or a month you fear missing out. That's much different from the traditional four-season cycle of clothes marketing that had been practiced by by large retailers for decades, with spring, summer (bathing suits, outdoor apparel), fall (especially "back to school") and winter (coats etc.) being reliable boosts for sales.