LOS ANGELES — Retailers from a patchwork of categories talked on Tuesday about the melding of food, fashion and entertainment, representative of a mix that is becoming increasingly important in the race for retail relevance.
Executives from Mexico-based high-end theater chain Cinemex, SoulCycle, Shake Shack Enterprises, home appliance retailer Pirch and multibrand apparel company The Bailey Group gathered to cap off the International Council of Shopping Centers Next Generation conference held downtown.
The range of speakers was fitting as the fashion industry sees more monobrand stores bringing in outside lines at retail, expanding from categories beyond apparel or setting aside flex space for events in an aim to offer more than clothing or accessories sitting on racks. The industry has seen that strategy from Shinola, which is building out its Arts District store in Los Angeles with a café and tattoo parlor, to Bailey Group bringing in braid bars and complementary brands to its Ali & Jay pop-up in Malibu.
Brands call it community, authenticity or any number of other buzzwords, but it’s ultimately tapping into the interests of target psychographics.
“We look at a pretty small radius and we work really hard to partner with local businesses in and around a neighborhood,” said SoulCycle vice president of design Alan Cooke of the company’s marketing strategy when it opens a new location.
SoulCycle is now in more than 12 U.S. markets totaling more than 60 studios after getting its start in 2006 in New York’s Upper West Side in a former funeral parlor.
“If [customers] want transactional, they go to Amazon. If they don’t want transactional, they go into the store and that’s what we have to continue to do is be that experiential, smart brand that also embraces the community,” said Pirch chief marketing officer Laith Murad, whose previous stints include Yahoo and Neiman Marcus.
Murad stressed the importance of theater in stores, whether that means bringing in tailors at an upscale luxury retailer or cooking demonstrations in a setting such as Pirch, which offers guests coffee and coloring books to children.
As brands look to growth, unit expansion — while still important — is secondary to bolstering the branding.
“I’d say over the last, probably 10 years, looking at growth, the fastest way to grow for a lot of brands was global expansion,” pointed out Bailey Group chief executive officer Christopher Tate. “They’d get their concept right and immediately [ask] how quickly can we flip it out and get it to our 100-, 200-, 300-, 1,000-store counts. The world’s changing. The currencies are changing. The stability in these foreign markets is changing as well and price transparency is changing, too. So it would be difficult for those old models to work.”
Pirch, currently in nine markets, aims to grow at a rate of two to three doors annually in the U.S., but these locales will reflect the merging of fashion, design, culture and food, Murad said.
Mexico-based Cinemex offers premium theater experiences, and has a five-year growth plan for the U.S. of about 30 theaters. And while many have asked or assumed its expansion into the U.S. market will be in Latino neighborhoods, it’s targeting high-end areas, according to its vice president of real estate Ana Cecilia Cardenas del Castillo. The company’s executed eight leases so far in Minnesota, New Jersey, Florida and Illinois. But its strategy slims down from the girth of the typical 100,000-square-foot box traditionally used by theaters to a sweet spot of around 30,000 square feet.
While talk of community and experiential retail has been thrown out across the three-day ICSC conference, it’s what retailers are hoping will offset some of the challenges that have risen with e-commerce and the rest of the digital conversation.
Human interaction still matters, said Cooke, who added SoulCycle often does follow-up calls to clients via telephone — rather than e-mail.
Retailers, no matter the industry, Murad said, have to balance the art of branding with the science of data and analytics: “I’ve seen some of the failures [at companies] with pressure to deliver numbers…you know, ‘How many people [visited the site]? What’s the conversion for today? How much is that cup of coffee?’ because I’ve been asked it. That pressure obfuscates what you’re trying to do and people have lost sight. I give out a coloring book. It costs $1. It’s branded Pirch. We made it ourselves. But if someone were to say what’s the direct return on investment, you’d kill [the coloring book]. You’d kill the coffee. You’d kill all the things that make it so important.”