Phillip Raub

A strange trend is brewing among direct-to-consumer digital brands — physical stores.

And it’s not just some charming throwback for ye olde shoppes, according to Phillip Raub, cofounder and president of B8ta, a Macy’s-backed retail-as-a-service start-up. At WWD’s latest Digital Forum in Los Angeles last week, he explained that it’s business, not nostalgia.

Citing a tidbit from an earlier session by Afterpay’s Lizzy Eisenberg, he noted that “Millennials still really like to go into physical retail spaces.”

In other words, the momentum — namely of retailers rushing toward the web — is swinging the other way.

“There was this huge idea that everything was moving online, and that people only shopped online. And while I think that’s happening in certain categories, still at the end of the day, physical retail is still such a very prominent space,” said Raub. “[Now] you’re seeing that so many of these, what they call, digitally native or direct-to-consumer brands have started to actually open physical retail spaces. Because they understand the importance of it.”

Being wherever their consumers are is a fundamental tenet for modern retailers. But there’s more even to it than that, according to Raub.

“When a brand actually opens up a physical space, they’re usually seeing about a 45 percent lift in their web traffic,” he continued. “So this shows, at the end of the day, that stores are starting to become media points.

“They’re becoming billboards for brands and places where people can come in and experience [it],” he said.

It’s a fascinating perspective, given how various ends of the brick-and-mortar spectrum have been wilting on the vine. For a budding operation, the risks are especially real. To hear Raub tell it, that’s precisely the challenge that B8ta was born to help new brands tackle.

When the business got under way in 2015, it started out akin to a souped-up landlord, offering space for online-only or Kickstarted gadgets and other nascent electronics, but with a twist. The company outfitted its stores with cameras and sensors, so it could “see what’s happening with their products in our stores,” he said.

B8ta captures and crunches data on how, and how long, shoppers engage with products, among numerous other behaviors that could only be observed in a real-world environment.

With those insights, partners can reshape everything from branding to product development, and more. And naturally, as a former Google Nest executive, Raub leaned on technology to do it.

Now he and his partners want to take the idea to the mean streets of Los Angeles fashion, specifically the famed Melrose Avenue, where Forum — its 1,400-square-foot fashion and apparel marketplace — launched a couple of weeks ago. B8ta runs some 20 stores across the U.S., and it plans to open its first location in Dubai later this year.

With fashion, Raub gets to stretch his tech wings beyond, ironically, gadgets. On the menu is an immersive fitting room that scans RFID tags to identify garments — whether formalwear or beachwear — so it can employ a projector that displays an environment or mood entirely created by the brand.

It fits with the idea of stores as marketing tools. Branding works because of narratives. And in that construct, brands are not sellers, but storytellers, and sales associates are narrators — their actual titles at Forum.

“We’ve got brands that have so many powerful stories, and they’re these local makers that we wanted to bring and figure out,” Raub explained. “The meaning of Forum, really at the end of the day, is it’s a marketplace…a gathering place. So we wanted to start to bring back that community aspect.”

Community spaces are hot in new retail spaces now. But it’s just one aspect of Raub’s formulation.

“We’ve got clienteling tools that the teams have built,” he added, “and so it’s this infusion — of bringing the technology along with creating great experiences to create powerful retail.”

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