Retail is one of the most dynamic and closely watched sectors of the world economy. Consumer spending underlies American gross domestic product growth. It all comes back to the stores -- what drives us to spend our money? Why do we choose to shop here, or there? What can store owners due to elevate the experience?
1. What retail trends are you seeing today?
Retail will always be a force on the avenue. Today, the best stores impart an experience that ties a customer to their brand and collection that evokes a lifestyle. Transforming textiles into fashion is more than design, sewing and distribution. The best retailers elevate their work to trigger emotions. Bricks or clicks, whatever your fix, it's the creativity that makes this business come to life.
2. What is the biggest misconception people have about retail?
The biggest misconception about retail is based on not understanding how much work goes into finding, bidding, leasing, designing, building and opening a new store. It is a lot of work. There are many professionals involved at every level, and everything needs to come together correctly for it to work well. In terms of the business of retail leasing, the biggest misconception is really from the residential brokers -- retail real estate is a totally different beast.
3. Who is doing brick and mortar really well?
The in-store experience is best when shopping can really become its own event. Saks Fifth Avenue is doing something really special here -- where the idea of personal shopping is being brought to the nines with all of the pampering and attention within the store. What Saks is also testing now is 'The Personal Shopping Experience,' where an 8-person team of stylists, tailors and jewelers come to you in a van complete with an edited wardrobe. At Saks, it's about the service and the selection.
4. Can you please speak a little about brick and mortar vs. digital.
Brick and mortar versus digital is a big misconception right now. It's not either or, but both. The best brands are loved by their customers because of how they deliver products and services to enhance our lives. It does not matter if the product is being bought in the store or online, because we do both, sometimes even in the same day. One really interesting example is from one of the country's biggest landlords we work with: there was a medium-sized store that grew a big online following. They closed the store, because they thought the online business would be enough. The online following just started to disappear. Physical and digital are the two faces of the same coin in the retail business, and we want that coin spent on our brand, in person or online.
5. What are some of the challenges with digital shopping?
There are three big challenges for digital shopping. We lose the ability to touch, feel and try on in the moment. And, as for the moment, we miss out on the in-store serendipity -- I came in for a blouse, but saw this skirt, and bought them both. For me, the third challenge is the loss of the magic. The in-store experience is about imbuing a space with what the brand represents, achieving a look and feel that translates into a lifestyle. It's like the difference between being in someone's beautiful home, or just seeing a photo. I think Ralph Lauren is a world leader in everything he does, but, would you want to shop his brand online, at a department store or discount retailer, or in the Ralph Lauren Mansion at 72nd Street and Madison Avenue? You already know my answer. If you've never been, that corner actually has three of his flagships, for women, men and children. It's divine!
6. Can you speak briefly about the "Amazon effect"? How is Amazon affecting various online industries?
Online, Amazon is the elephant in the room. The question for every consumer who wants to order anything online in this very moment, once Amazon carries it, the price will be lower and the delivery faster than any other website. The secret there is economies of scale. Amazon generates $130 billion in revenue, and its profit margin is a tiny 2 percent. That was also a long time coming. In 1997, Amazon shares began life at $1.50 and, nearly 20 years later, they’re trading close to $800. Two years ago, the shares were only at $300. The point is, if you have 20 years, and the ability to reach scale before having to turn a profit, you could become the next Amazon, too. Most businesses do not have that luxury. So, the question becomes how to bring a new and interesting idea to the market, how to keep costs below the price your customers will pay, make it sustainable, and then scale up. That's true for brick and mortar and online stores.
7. Where do you see the future of retail?
Retail is now all about the experience. We're seeing a lot more focus on in-store amenities, on the idea of art and creating a performance in the space, and, of course, service, where we're seeing a focus on providing what definitely cannot be gained online. Growth is also about convenience -- a Starbucks on every corner, a bank branch everywhere you need it. Online, the future is definitely Amazon for mainstream purchases -- why buy laundry detergent every now and again when Amazon can have it at your door for the same price or less in 48 hours? But also, all of the great ideas that humanity can invent, package and sell to us, available for browsing at home or on the go, with new products always there to tantalize. What I mean to say is that we need not fear this giant shopping monopoly, but let it take up the monotonous parts of what we need to buy, allowing us more time to be creative, to discover and to support young artisans with their tiny online shingles in cyberspace.
8. What advice do you give to an entrepreneur looking to sell something?
Do the thing better and cheaper than what the market offers, or more elaborate and extravagantly, but with the same eye towards what the customer really wants, and delivering. Focus on the simplicity of your idea, reduce needless features and understand your competition. In the online world, venture capitalists want to see solutions that are 10 times better, because they know how hard it can be for consumers to appreciate your improvements. If your widget is a mouse trap that catches 10 times as many mice as the other guy's, it becomes an easy sell.
9. Are self-selling sites like Etsy good vehicles for distribution?
Etsy's brand started with the artisans and craftsmen out there, and I see that as a strength. When looking for an artsy purchase, why not go to Etsy? I've known people to find artists, calligraphers, specialist jewelry makers and antique restorers at Etsy, and that is great. As a sole distribution channel, that might be OK for a small artist who makes every product differently, but I don't think it's so great for selling a manufactured product with a national distribution. If you try it and get sales, great. If you can expand your network onto channels, even better. If you can augment online with your product on the shelf of every Macy's, brilliant. If you expand your line and have enough product to take your own store, all the better! If one store is performing wonders, open more in the same city. If that works, certainly, take it national and then global. It all comes back to what you're making and the customer's response.
10. Please speak a bit about technology in brick and mortar. How is it evolving?
The biggest technology changes within stores is that computers can track the movement of inventory better than ever. We know where every box is in the warehouse because of serial numbers or RFID tags -- that's Radio-Frequency IDentification. New middleware programs make sense of all of the back-end, tying together all of the programs stores use. We control the inventory, the shipping, and the direct delivery to the stores. All of that continues until the POS -- point of sale -- cash registers -- now sometimes even cashless, just iPads, credit cards and signatures. This is evolving the same way "Internet of things" in the home -- once it can all be connected, everyone wants to, never mind the cost. The challenge, of course, is that big operations can benefit, but, in your smaller boutique or only shingle, all of this might be overkill.
Photo Credit: afewgoodclicks.com
In 2016, Renee Wang sold her home in Bejing for $500,000 to fund her company, CastBox. Two months later, she landed her first investment. Just a half hour after hearing her pitch, she was offered one million dollars. By mid-2017, CastBox raised a total of $16 million in funding. CastBox's user numbers at that point? Seven million. Fast forward to today. Renee Wang of CastBox announces a $13.5 million Series B round of financing, bringing her funding total to a tidy $29 million. CastBox is now serving more than 15 million users.