Don’t Call it a Comeback: Experiential Retailing

A few years ago, experiential retailing was touted as the answer for bricks and mortar stores to compete with online retailers. Some high profile examples like Terrain (the garden/café/store concept owned by Urban Outfitters), Metropark (a clothing chain with DJs spinning during the weekends) and REI (sporting good retailer offering climbing walls in-store, among other activities) were billed as the new future of retail – and a way to beat the ease and convenience of e-commerce.  But in the past few years, the hoopla around experiential retailing has taken a back seat to more of-the-moment buzzwords including mobile and omnichannel.

But guess who’s back? That’s right, experiential retailing is back – but in a new way, aimed at making bricks and mortar stores “gathering places” for shoppers, not just shopping places. Some recent high profile examples:


Nordstrom storefront courtesy of Nicholas Eckhart via Flickr

  • Nordstrom launched a cocktail bar in its Bellevue store. Sure they’ve always had a café and coffee bar in most stores, but not a true cocktail bar. Habitant launched in July as a test, and Nordstrom may roll the concept out to more stores in the future.
  • Restoration Hardware recently revised its store designs and included a wine bar, pub and billiard room in its new Boston flagship store. These and other non-retail elements are being added to other stores as well as more of the new format stores are rolled out.
  • Urban Outfitters is launching a new concept store in Williamsburg area of Brooklyn, featuring a variety of pop-up shops, apparel and a restaurant and bar with rooftop dining. Slated to open in winter 2014, the multi-floor store will be a new addition to the Urban Outfitters portfolio of brands.

It remains to be seen if these types of add-ons to the traditional retail store will result in sustained improvement in store traffic and revenues (for other ideas on how stores can compete, see here). But at least bricks and mortar retailers are not going down without a fight.

Three Things Malls Need to Do Right Now


Shopping mall, courtesy of Jorge Franganillo via Flickr

Every year around this time, retailers announce store closures – many of which are mall-based.  This year is no different, with mall-based retail chains including Abercrombie & Fitch, Sears, Macy’s and JC Penney announcing store closings – on top of store closures in 2013.  And with mall traffic declines expected to continue as e-commerce gains, it wouldn’t be surprising to see more retail operators downsize or close stores.  And that has made many experts predict the death of the shopping mall. But is it really game over?

Let’s face it, Mall of America’s expansion plans notwithstanding, it’s going to be tough for mall operators, even in A or B malls, to fill all the empty slots in their malls this year – and continue to drive traffic.  Most A and even many B malls have already expanded food options, added play areas, tried weekend fairs and farmers markets, hosted fashion shows and encouraged mom-and-pop retailers to open stores (e.g., eyebrow threading, shoe repair).  But all of these options are really just a stopgap.  So, what should malls be doing to maintain their relevance in an increasingly e-commerce oriented world?

Embrace the Pop-up – Short-term pop-up shops (either marketing-related or commerce-related create a lot of hype in big cities. So why shouldn’t malls use their extra space or empty storefronts to host an ever-rotating cadre of pop-ups to drive excitement in the mall?  Sample sales are another option – and existing retailers in the mall can even contribute.

Bring Online Offline – Sure, some shopping malls offer free wi-fi, and others promote their own mall apps.  But that’s not enough.  Bringing select e-commerce retailers into the mall (like eBay, Amazon or Etsy sellers) – via a pop-up shop, marketing promotion or showroom would help to create more buzz and local excitement at the mall.

Invest in Flexibility – One of the biggest issues with malls today is their fixed layout – which makes it difficult to bring in non-retail, non-food options. With fixed store layouts, shoehorning office cubicles, gyms or doctor’s offices into the current spaces is just too difficult or expensive.  But if malls could over time reconfigure at least some of the space into areas with flexible wall and flooring arrangements, they could attract more non-retail businesses that could drive more foot traffic.

Of course, there are also plenty of malls that need a facelift, are saddled with irrelevant retailers or just are poorly located.  For those malls, there are no easy answers. But for the remainder, the time is now – before it’s too late.


Will Millennials Go Back to the Mall? Not Really.

millennials don't shop in malls

A not very busy King of Prussia Mall, courtesy of Richard Owens via Flickr

Do you remember the days that teens used to come to the mall not only on weekends, but after school? It’s hard to believe but true – up until about 2008, American teens regularly came to the mall, armed with a parent’s credit card or cash.  They would hang out, shop, eat and watch movies with their friends.

Then came the recession. Parents took back the credit cards and cut back on spending even for key seasons like back-to-school.  Many teens were unable to get summer or part-time employment so they didn’t have any of their own cash to spend.  Not surprisingly, teen retailers like Aeropostale, American Eagle, Abercrombie & Fitch and Hollister struggled.

At the same time, teens started using social media to be, well, social.  Instagram, Snapchat, Facebook, Twitter and more became the way teens communicated instead of hanging out at the mall after school or on weekends. And there were plenty of fashion blogs, new e-commerce retailers and fashion sites like Polyvore to browse without leaving home.  Suddenly, it just wasn’t as important to physically be at the mall.

Fast forward to today. Those teens that ditched the mall?  Well, they’re in their 20’s now and they’re still not going to the mall that often – a recent study found that even now, they are hitting the mall once per month. Let’s face it, this generation is just not a bunch of mall rats. All those years of going online to be social and browsing online has had its impact – millennials still find other ways to shop and browse.  And why not?  Online millennials can browse and buy from the e-commerce sites of traditional retailers as well as those with no to limited store presence like Nastygal, Modcloth, Madewell and more.

So will millennials actually ever go back to the mall in the way that malls are hoping?  Sure they’ll go when they need to try something on, or to see a movie, or for dinner.  And malls aren’t giving up on them by any means. But it’s doubtful that malls will get this generation of 80 million young people to think of the mall the way previous generations did.  And that spells trouble for the mall.

Women’s Activewear: Not Just About Yoga Anymore

women's activewear yoga

Courtesy of Benjamin J. DeLong via Flickr

In the 1980s it was leotards and legwarmers. In the 1990s, it was running gear. But for the past 10 or so years, it’s been yoga pants. Ah…yoga pants. Those ubiquitous black stretchy pants paired with a moisture-wicking tank or hoodie.

In fact, the explosion of yoga and yoga pants launched a slew of women’s activewear brands and retailers in the US: Lululemon, Athleta, Sweaty Betty, VSX by Victoria’s Secret…the list goes on and on. The yoga boom also energized the big names in the activewear space – major brands like Under Armour and Nike launched highly successful yoga lines, as did Gap with its GapFit brand.  Even kid’s retailers like The Children’s Place began offering yoga pants. If you are a retailer in the yoga business, it has been a great run for a long time.

women's activewear cross-fit

Cross-fit, courtesy of Christina Gloger

But now things are changing – not that activewear is going away. Actually, the women’s activewear market grew 9% in 2013 and is expected to keep growing at a similar rate in the years ahead.  But the key is that it’s not only about yoga anymore.  It’s about activewear appropriate for a variety of activities. Newer fitness trends including spinning, CrossFit, bodyweight training, HIIT (high-intensity interval training) and more are expanding the market for women’s activewear.  And accordingly, brands and retailers are taking notice.  Reebok is now the official activewear sponsor for CrossFit, Soul Cycle has launched its own line of spinning-related apparel, and Nike has made running a primary focus at its retail stores. Both Under Armour and Nike have also made the women’s activewear business a key growth focus for the years ahead. Even Target recently re-launched C9 by Champion to be a full-fledged activewear brand.

What does that mean for retailers in the activewear space for 2014?  It’s a great niche to be in – as long as they remember that it’s not just about the black yoga pants.

Bricks & Mortar vs. E-commerce? The Winner is…

You’ve seen the stats – the 2013 holiday season showed 12% growth in e-commerce and a slowdown of 15% in mall foot traffic.  Put them together and the answer is obvious. E-commerce wins and stores and malls everywhere die a slow death, right? Well, maybe not.

First, people who like to shop like to go to the mall (or downtown shopping neighborhoods, lifestyle centers, etc.).  Yes, even millennials, the smartphone-happy generation, still like to shop in physical stores.  And with fit technologies still in their nascent stage, many apparel purchases in particular are just plain easier in person.  And sometimes you just need something today – not in five to seven days, and not even in two days.


Second, bricks and mortar retailers are not going easy into that good night. They’re fighting back and using mobile, social, e-commerce and omnichannel strategies to do it. A few recent examples:

  • Sears just launched a drive-through feature at its stores to pick up items purchased online
  • Gap recently launched a “reserve-in-store” feature in select stores that will soon be available throughout the entire chain. “Order-in-store” is also about to be tested.
  • Neiman Marcus launched a new e-commerce app for smartphones which also prominently features store-specific sales associates and in-store events that help to drive shoppers to the stores.

Mall of America, courtesy of Kimberly Robyn via Flickr

And don’t forget that e-commerce sales are the bright spot for many of these bricks and mortar retailers including Gap, Nordstrom and even J.C. Penney – all of these retailers have recently called out e-commerce growth even while stores have seen declines.

Third, malls are also working to drive foot traffic by becoming neighborhood centers – adding more and better food options, hosting elementary school art fairs, bridal expos, farmers markets and more.

Last, e-commerce is going old school. Many pure play e-commerce retailers are experimenting with pop-ups, showrooms and even full-fledged stores to expand their reach and give shoppers a physical experience.  A few examples:

  • Bonobos – Launched stores and wholesales its clothing at Nordstrom and Belk
  • Warby Parker & Bauble Bar – Have experimented with pop-up shops
  • Blue Nile – Testing “showrooms” at Nordstrom

Well, it’s not that cut and dried.  While many stores and malls may close over the next ten years, we suspect that most will morph and adapt to bring elements of e-commerce and mobile into their four walls, and e-commerce retailers will increasingly use stores to expand their reach and brands.  The good news?  Shoppers will get the best of worlds. The bad news? There will likely be many painful moments between now and then.

Are Millennials and Traditional Retailers A Mismatch?

We’ve all heard about the millennials – at 82 million strong in the U.S, they’re the key demographic for retailers – especially as they are projected to reach $1.4 trillion in annual spending by 2020.  We’ve also heard that millennials dress too casually for work, and are relatively frugal.  But what happens as they get older?  Does this generation take such a different approach to dressing that traditional retailers can’t satisfy them? Are millennials and traditional retailers a mismatch?


Millennials, Courtesy of Erin Nekervis via Flickr

Look at the evidence.  The youngest of the millennial generation is just at post-college age now.  They’ve aged out of the classic teen brands (e.g., Abercrombie & Fitch, Hollister, American Eagle) – but even when they were teens, many chose alternatives including Forever 21, Urban Outfitters, Free People and Wet Seal – not to mention TJ Maxx and other off-pricers.  Why?  Well, the economy of course – teen spending has been depressed for a number of years and few can afford to buy luxury items – or anything at full-price (especially when there’s a new hot tech item to buy).

But it’s not just the economy.  It’s also a fashion shift – one that has moved millennials from “outfit dressing” (e.g., a head-to-toe look) to a more personalized approach where young women buy a number of different items from different brands and then put them together in their own way – not only personalized, but also in many cases deliberately mismatched.  Want proof?  Take a look at the “ugly-pretty” outfits on HBO’s hit show Girls. Or the mannequins wearing mismatched combinations at Urban Outfitters. As well as the extraordinary success of Nasty Gal.


Mannequins at Urban Outfitters


What does that mean for traditional retailers as the millennials age into their 30s and 40s? Brands like Gap, Ann Taylor, White House Black Market, New York & Co. and Banana Republic are not going to be the millennials’ brands of choice – these women likely won’t dress in that way. But it’s not all bad news. There are a few traditional retailers that are embracing the personalized/mismatched approach – including Saturday (by Kate Spade), J. Crew and Madewell– which means it can be done. The question is, can other retailers follow suit? That remains to be seen.