The Store of the Future
In 2001, Prada opened its flagship store in SoHo, designed by Dutch architect Rem Koolhaas, then at the height of his international fame. It was clear from the outset that the space, equipped with technological wonders such as the cylindrical elevator or the mirror-replacing dressing room video panels, and designed with bold design decisions like the wooden “wave” which turned the elongated space into an informal auditorium, was not about selling product.
What was it about then? A New York Times article observed that what Prada was in fact presenting in SoHo was space itself, which has become “the ultimate luxury”. The other thing was the Prada experience – total immersion in the brand.
In what seems to be forever ago in retail terms, the store presented a visual and atmospheric blend of associations that were meant to convey Prada’s industrial roots coupled with radical Italian art: “Antonioni” writes the enchanted NYT critic, “is recast as a shopping experience”. Fifteen years or so later, this idea sits comfortably in the mainstream of the marketing strategy of almost every big brand, described through the terms of “brand activation” and “experiential marketing”. Companies such as Volkswagen or IKEA have been exploring such ways to interact with their clients, transforming public spaces into giant pianos or furnished climbing walls.
But some things did change since Prada opened its doors on Broadway and Prince, the first being SoHo itself. Once the fortress of hip retail, it succumbed to a nation-wide dynamic called by some the “retailpocalypse”, with availability rates rising from 4.7% to over 23% between 2011 and 2017. The other thing that changed is of course online retail: with more than 40% of Americans who now prefer searching and buying online and with 60% of online buyers that purchase more than one product per month, online retail, already estimated in hundreds of billions annually, is expected to grow exponentially in the next few years. Today, the vision for the future of retail that Prada presented, which included owning and operating your space on central streets – seems completely out of sync with reality. Space turned from being a luxury to being a liability.
That is, of course, only if you use it all the time. Recently, Puma organized an experiential, one-night pop-up event in one of the spaces we rent in Chelsea. The company used the space for several hours to launch its new collaboration with Seoul-based design collective Ader Error. The retro feel of this collaboration was expressed in a series of photogenic installations created especially for the space, and backed by atmospheric video teasers. The product itself, if you wondered, got enthusiastic reviews, and is currently being sold in all of the right online stores.
What Puma did at Chelsea bears an experimental artsy feel, but is in fact a pragmatic and strategic reaction to the retailpocalypse. If we can activate a space for a short period of time in such a way that would communicate the right vibe, circulate it on social media, and then sell our product online, then the brick and mortar stores of yesteryear and the risks that come with them are no longer central to a brand’s strategy. That part of the reason is why pop-up stores are so ubiquitous in the contemporary shopping landscape, valued at 50 billion dollars in 2016. While a company as big as Puma is still likely to maintain some of its stores, these would likely be located outside of city centers, where rent is low. Small to mid-size retailers would put even greater emphasis on finding the right spaces to create short-term, yet memorable experiences for their customers, while the actual selling can happen in dedicated online stores or in marketplaces. It is not clear yet whether the pop-up industry means the uberization of retail – that is, the trend that will end up disrupting patterns that were in place for decades. What we can say for certain is that real-estate for retail is likely to shift in emphasis from ownership to access. Imagine the Prada in Soho completely transformed several times a day and you will get the drift of the future of retail as it now stands.