#RetailProphetAMA: How To Execute Experiences

[Music] hello everyone thank you so much for joining us today we're thrilled to have you for another retail profit ama today we're going to be discussing how to execute experiences with a very very special guest which we will introduce shortly now my name is riley stevens i'm the director of insights here at retail profit and i'm going to be your moderator for today's discussion i want to just cover off a few housekeeping items and then as i said we'll introduce our host doug stevens and our very special guest so first things first today's discussion will be an hour in length so we're going to be finishing up here at 12 on the dot and as always many of you have attended previous sessions with us so you'll know that we will not be looking at the chat box or any raised hands if you have a question we would love to hear them um but use the chat box and that's just located at the bottom of your screen we'll be looking at the chat box or sorry at the q a box i should say uh throughout the discussion and answering your questions live today now keep in mind we're going to be trying to get to as many as possible but we encourage you to also if you have follow-up questions um after the discussion or just simply want to share your thoughts on what we're discussing today we encourage you to use the hashtag retailprofit ama on social media i've also included our um our usernames here for you to tag us if you'd like now for introductions doug stevens is the founder and ceo of retail profit and he will be the host for today's discussion doug is currently in the midst of writing his third and highly anticipated book resurrecting retail the future of business in a post-pandemic world now very exciting news resurrecting retail is now currently available for pre-order so if you'd like to check it out on amazon we encourage you all to do that today now i will throw to doug to introduce our very special guest thank you riley and thank you for that shameless plug of the book that's what family is for and i appreciate it hey everyone how are you it's good to see you again we've got an amazing turnout for today's event and it's no wonder the guest really requires no introduction but i'm going to give her one anyway rachel sheckman is the founder of story new york city and i i guess it was around 2011 or 2012 i became aware of this thing called story and i happened to be writing a book at the time so i was deep into research and so made my my pilgrimage to new york city and visited rachel's store on 10th avenue on the west side of new york and it was like as soon as i walked in and looked around i just thought okay yeah this this is where it's going retail is about storytelling and this is the way stories should be told and and it was a really pioneering concept and a daring concept at the outset so from that point on rachel and i have um uh talked over the years we've become friends and uh every now and then we check in with each other on on where all of this is headed so with that absolutely delighted to have rachel with us today uh thanks for being here rachel thank you for having me maybe the place to start is we we throw the words experiential retail around a lot um but my sense and i'm not sure if you feel the same way is that oftentimes you can be talking to someone about experiential retail and you're not quite sure if you're both talking about the same thing so what is it what what is this thing we call experiential retail yeah i think well well thank you again to to riley and doug for having me it is fun and uh i do remember when you walked in the store uh shortly after we opened and and here we are in this new normal uh short term normal hopefully but um i think you know i don't know i was thinking about this before you know we pressed the start button is there is there one universal definition that applies um i don't know that i i have i feel strongly one way or another i think for me at least um when i think about starting story and i just think about retail in general um the way i kind of think about it is a multi-sensory experience right so it's funny for the fun of it i googled the definition of experiential retail right and there's words like vr and art and screens i don't know i don't know that i believe you could have those things and have it not be experiential it's on the execution for me we kind of had this little invisible formula that was about a multi-sensory experience that combined auditory visual and visceral elements and so and where the that derived from was people learn and communicate differently right i'm a very visual learner my sister's very auditory if a store doesn't communicate to both of us only one of us is leaving there with with an impression or an experience right i mean you've heard me say before you know we always talked about experience per square foot and we always made sure that there were those three multi-sensory elements throughout a story and depending on the story we were telling if it was beauty story we might have dialed up the visceral experience experience where if it was home for the holidays people want in and out so that might be more visual and auditory um so we always thought about it in terms of those three senses is kind of how we looked at it i think it's interesting what you say about screens because i think that it it for a while anyway there was sort of this default to on to believing that that's what it meant oh we were gonna have a retail experience so yeah it was always like some little vr installation over in a corner somewhere or it was just basically taking web information and driving it to screens in store um it seemed to me that it really was [Music] i mean it was almost more about the art than the science right i mean that this you know the technology pieces could be aspects of of allowing the experience to take shape but it was really more of an artistic process can you just sort of for for people listening to this and i suspect there are a lot of people who are facing that the challenge of mounting these kinds of experiences whether they're online or off can you just walk people through the process that the team at story would go through in creating a new theme or or story yeah um or was there a process or was it just chaos well the joke is the tagline i always say is you know both my life and the process was chaotic continuity um i was just talking about one of my oldest employees who i still talked to every week uh yesterday about it um you know some stories we were crazy enough to pull off in three weeks others we had you know the luxurious uh runway of a whopping three months um which is still aggressive to some people but um you know i think the process was like we would sit in a room and and it was primarily megan and i my my right arm uh and say like what would we get excited about but we had certain rules and words so it had to be you know versatile and appeal and engaging so we would never say yes to a theme for example like bridal story right because we always said we want an experience that's relevant for men women and kids between five to ninety five now granted not all age demographics whatnot is gonna have a similar experience but in doing so you know it's it's hard for me to imagine getting a six-year-old like really pumped about a bridal theme right but you know if uh you know we did his story that um was with details magazine we brought in tom's shoes and we had shoes for kids and we found cool businesses that would appeal to younger demographics so for us it was really those two words versatile and engaging they might sound generic but for us that was kind of the litmus test for a narrative and then in terms of the process of how we brought it to life you know merchandising we had two different kind of narrative storytelling tools merchandising and event programming and so the merchants would go out and find products and and entrepreneurs that exemplified whatever that broader narrative was and then we had amazing you know we did over that you know i don't know how many thousands of events over the years community centric programming um that would dial into that as well so kind of our editorial side was merchandise and event programming and then the last bit of it that like i am very passionate about is uh the training piece um we were you know we call our sales staff storytellers and um they would train each other so we had peer-to-peer training and then we had vendor training and depending on the price point and the complexity of the merchandise that would dictate what was peer-to-peer versus what was vendor training and your revenue model for those that don't know what was that comprised of yeah so we had two revenue streams so uh like a traditional retail we sold merchandise um but we also had a second revenue stream which was sponsorship and so the hypothesis kind of you know for me story was an experiment i didn't know if it would work i didn't know if anyone would come and the hypothesis was could retail be a media channel and how can we look at retail and monetizing differently and so um you know by you know story uh the original new york location you know by the time you know all was said and done an average sponsorship was 600 000 holiday was a million dollars and we had very specific you know to some degree i wonder if i should call it sponsorship because it was almost like we were you know a consulting firm with a retail arm we were like a living lab because we had very specific deliverables um but yeah that was our that our second revenue stream so rachel i find that really interesting and i want to sort of dig into this a little bit more for our audience um you know this this rule reversal of this the physical store acting more like a media channel was something that when when story was created was really one of the first of its kind and it really did flip this flip the script on what it meant to be a physical retail store and i know that you once said that media can occur anywhere where people gather in numbers can you explain that thinking um to our audience and then elaborate on how that philosophy shifts the role of the physical store sure well i think you know i kind of had this this thought way back when i started when i had read you know this is a 2018 statistic so i don't know the most recent numbers but um you know starbucks back when we could go into starbucks but starbucks um had 60 million people a week going into its stores worldwide right a week so that's what 24 million a month and that's in 2018. um and you go think of what we define as traditional media channels right and you look at magazines and newspapers and this isn't to diminish that at all so this isn't an or it's an and right so i'm not comparing in that regard but more just like if we're if we're paying to create campaigns and impressions um you know in these other forms of media why aren't we there's all this untapped media out there i mean you go do a strategic partnership with starbucks and get your brand in front of those 60 million people a week you know um that doesn't even count for whatever social media or or earn media comes as a byproduct for that that trumps many many other forms of traditional media tenfold um so so for me i just think there's such an opportunity to to reimagine how brands partner and where they show up and you know i think sales per square foot i've said this you know it's not an original uh statement you know sales per square foot i think is an insanely archaic metric uh and i think that you know there's just untapped potential to really think differently about engagement and monetization you said something one time rachel uh that i've that i've misappropriated and used myself many times now that is that rent is the new cost of customer acquisition you know we've always looked at media as being the you know the construct through which we develop awareness and we develop you know uh the the ability to push consumers to retail in retail is just the distribution arm but you you framed it up that way rent is the new cost of customer acquisition i suppose that's more important now than ever given the escalating cost of digital media right i mean we're hearing stories now of brands that are basically say they're tapping out they're saying okay i there's no way i can even justify acquiring customers on facebook anymore it's just way too expensive or you know if it's not facebook it's instagram so do you see the role that role of the store as a media channel being perhaps even more profound coming out of this crisis or in the midst of it maybe yeah i think that you you know there's um you know other other some brands uh adapting more and more i think to this philosophy looking looking at it that way and i think that like you know again if if i set up a store and i get 50 new customers and a door that day right why the heck am i not running that math with the same math that i do paying for google adwords like i just don't the logic doesn't make sense right and you just everything's so siloed and segmented and and um you know everyone has their own math per their silo but i just think that it's uh it's an important it's a very important way to think about it and i think you know there's there's more and more kind of developers and models out there i was just you know i'm out in colorado now and i was down in denver and there's a great um place called free market within the dairy block and you see brands there like beauty counter and um you know there's d2c brands there then you have small independent brands um but i just i was so blown away and impressed by it you know they're doing you know percentage of sales for rent so it's a lot easier for people to test and try shorter term leases and so i think the more and more we find landlords and developers rethinking their own models that becomes a forcing mechanism for other brands to rethink their cost structure i think i think that's a good point um and and it's something that i've brought up with people in the shopping center industry a lot is that you know look if we assume a future where fewer items are being purchased in stores just as a purely as a factor of consumers you know availing themselves of online convenience it's reasonable to assume that the stores that occupy a shopping center somewhere are going to see lower and lower sales each year how do you continue to just raise rents or or charge percent rent over and above a certain threshold if sales are going down and so if the if the role of that store is increasingly to be that of a media property would it not make sense for the shopping center to look at themselves as being a network of media properties right and their role just like any network is to drive people to that center so that they can be exposed to those brand impressions and it really starts to look an awful lot like a tv network when you start to run run it with that philosophy yeah i think you take it a step further you know one thing that i don't even know if you know this story actually now that i'm thinking about it a lot of people don't know that before i launch story i it was a startup store did you know this so ben ben kaufman who founded camp and is my bestie is uh he bet me like 20 000 in sponsorship money which back then was a lot that i couldn't you know i signed my lease that i couldn't open the store for christmas i i had signed it on october 28th 2011. i was like no i'll be open for christmas and then i was like crap i don't have merchandise i don't have my trademark and so i was at home and there might have been a glass of wine or two involved and i was like wait a minute like if we're the same people who live offline who live online why can't we have beta why can't i open a store in beta and so you know and for for those listening beta being you know that form in which many digital and technology companies launch and it's their way of saying hey we're just testing things out so things might break or be wrong and so i'm like okay so we called ourselves a startup store beta and we only sold merchandise from startups and this was in 2011. so this was before ddc brands had retail stores so we had birchbox and we had bobble bar and quirky and art space and i use that as an example i mean i had we had two employees at the time you know fast company wrote an article on a startup store i had no idea what i was doing but i used that as an example because what was fascinating was overnight right it had millions and millions of media impressions and the response was insane and what i realized was you know birchbox baba bar quirky they none of them were competitive with each other and they all shared you know a type a psychographic of consumer so all of these brands were so excited to share with their communities hey we have a physical space so guess what like quirky acquired new customers from birchbox you know messaging its community um but it was all copacetic because they were all you know it wasn't like another beauty company so i agree with you i i think really looking at these formats and combining of different brands and retails as media is a no-brainer yeah agreed do we have anything coming in riley in terms of live questions for rachel lots of live questions um quickly i want to just ask rachel you know this is a question that's come up regarding camp experience stores um and it's all about this notion of we touched a little bit on it but how the pandemic is now changing this experience um that's happening at store level so i you know rachel you sit on the board of camp you mentioned camp experience stores and your relationship with ben um can you tell us i guess first of all let's let's for our audience who maybe haven't visited a camp store um tell us what camp is and then i'm also curious to hear how you're advising brands to handle the disruption caused by covet 19. you know camp which is a company that's so reliant on the physical interactions that take place in the store how do they how do they come out of this alive and well and thriving yeah so um for those who haven't been camper don't know camp it's uh camp.com um but uh so camp is a family experience store you basically walk into this 1200 square foot beautiful excuse me wood gift canteen and then there's a secret magical speakeasy door that opens to 8 000 square feet of experiential retail um it's thematic so it changes they've done cooking camp and they've done travel camp um and so you know i really have to say i'm obviously biased for a myriad of reasons but hats off to to ben and nikki and their team at camp because they were very very quick to to really um react to the to changing circumstances so some of the things that they've done that they did early on was you know i think within days of of quarantine kicking in in new york and elsewhere they started doing virtual birthday parties so i think a lot of the things doug is talking about in terms of media in a physical world you know ben was really saying hey like let's do media you know in a digital world but also experiential so they would they would do virtual birthday parties they i think they did over 10 000 kids had virtual birthday parties around the world they were free every day at four o'clock or you could pay for a private one but they were experiential in their own right right so the clowns and musicians and they'd say blow on the screen and then coins would come at the clown's face right and so you know yes it's a little different than being physically with a clown but it's more than just sitting there and watching a video and then what happened was they got sponsorship and ad dollars for it so brands like apple tv and ally bank started paying money to sponsor the birthday parties um other examples of how they reacted was they created a digital camp and they partnered with walmart so you know they got a sponsorship from walmart and distribution you know through that they have some vans going around the country doing craft workshops and stuff outside so i think um i can't reveal what's in store for holiday but uh what i but i will say what's interesting right so all stores are now open um in in cases like dallas you know you can go to the experiential part of the store you know in an adjusted way um where it's obviously very limited and whatnot but they just launched a new theme last week in the in the norwalk uh mall which is art camp which is a lot of fun um so i think he's being very sensitive to markets like the experiential component is not open in new york city um and so depending on the market depending on what the guidelines are depending on the design of the space um he's he's doing what makes sense and continuing to cook up some some interesting partnerships rachel do you think that there is i mean as you describe that and i and i spoke to ben as well for for the business of fashion podcast which which all of you are are in uh and will be coming up soon but um when i spoke to ben he mentioned that he said you know we we had to make this pivot to digital we knew that we had a lot of kids having birthdays we sort of took that proposition to walmart because they have audience and everything just sort of gelled when you get into the mindset of being an experiential retailer does it do you think give you that freedom of thought that i'm not anchored to any particular category i'm not anchored to any the sale of any particular product as an experiential retailer it seems like you what you really are selling is ideas and stories right and and it seems to me that there's sort of the built-in resilience there to crisis um in the sense that you can make those pivots do you do you agree that that you sort of get a bigger plate uh what is it the sandbox do you get a bigger sandbox when you start thinking experientially yes and no and what i mean by that is i think it's really depends on the brand and the category because i think that you know in the case of ben it made sense for him to do virtual birthday parties does it make sense for show fields to do virtual birthday parties probably not you know it's kind of like where do you have permission where is their authority and authenticity to say i'm going to be able to monetize based on experience and engage my customer and gain loyalty because of experience and so i think that you know it really depends on how a brand you know what their revenue streams are and how they're able to monetize that so i think that i don't necessarily say that every experi believe that every experiential retailer has built in resilience i think it's it takes ingenuity and you know the other thing is when you look at something like camp right it's a different skill set and talent pool to build digital experiential media than physical experiential media right so there's lots of layers i think that that come along with that and it also to some degree right is an education and a learning curve with the customer i mean in this case we had a global pandemic that forced us all to be attentive um and more adaptive to digital experiences but the the camp customer was used to walking into a store not sitting in front of a screen and it's great that we've seen that evolve but yeah i think i think it really depends on the category and the team and whatnot fair enough yeah absolutely uh okay rachel we've got a live question for you here and this question comes from shannon ryan and he says and i quote rachel hashtag big fan that's the first part and he would like to know and hear your take on the future of big flagship stores so this is something that we've touched on a little bit in past episodes um of this live stream and shannon's point here is that as you know companies like under armour for example are now pulling the plug on these massive experiential retail concepts in new york city so his question is are these smaller more nimble approaches the future and is this idea of thinking big uh simply over now um i don't know i think i think we need a psychic or a futurist for this one um i think i don't think it's over i think we're just it's gonna take us a little while to get back there you know i i i don't think it's over i think that you know people are gonna rethink the function of a flagship and what those experiences are and how much you have to touch things or not um i don't think i don't think they're over i don't i'm i feel like i'm letting shannon down without a sexier more extensive answer but um i just don't i think i think in general like right now unfortunately there's so much that's unknown and you know i think the tendency of many brands is everyone's in survival mode and thinking about how do i get through this as opposed to how am i going to thrive and excel and be relevant you know a decade from now and so i think everyone's still in that survival mindset and what are we going to do based on what we know in the realities now and there is a very low tolerance for risk taking especially from public companies um and so you know anyways i don't think that that's much of an answer but but i will say i'm not giving up on big flagships i just think that it's gonna take a little time for it will definitely take time for them to come back and it's also i think there's going to be new and ex i i think or slash i really hope there's new and exciting expressions of what a flagship is in the future i just think now is not the time you know where people are cooking up those visions unfortunately i'll um i'll jump on that a little bit i you know i i sort of i guess i take a slightly different view from rachel in the sense that oftentimes i will hear you know client will call or they'll get in touch and they'll say we're we're developing a new concept we're developing a concept store and you and then you get together and you talk it through with them only to realize that what they really mean is it's a flagship store you know we want to build a flagship store and i always there's always this pang of disappointment when i hear that because i feel like the the whole idea of a flagship store sort of throws up a lot of problems sometimes in organizations one being that you know oftentimes the operations side of the business the store ops side sort of looks at these things as being marketing extravagances they don't feel that they're real stores so you know we don't take ownership of what goes on in them to any great extent and then you have marketing sort of blaming store operations that customer experience in the flagships isn't where it's supposed to be you have the c level basically looking at the flagship store and measuring it on nothing but traditional metrics so they're not even accounting for any sort of media value to rachel's earlier point and and it sort of always has confused me why you would want to build a few stores in the world that make the rest of your stores look really shitty by comparison why would you do that so i sort of look at it the other way and i i would like to believe that um that that brands are constantly rolling out concepts new concepts they're tweaking things they're they're iterating they're developing but every store in that sense is a flagship no matter where i shop in the world with a particular brand you know i'm walking in and i'm getting what i think is the unfiltered brand story and experience so maybe i'm a little jaded or tainted just been you know sort of disappointed too many times but when somebody just says look this is like project x skunk works off the beaten path and we're trying a new concept that's where i get really excited yeah yeah i agree i think that makes a lot of sense love it so uh rachel i know that at one point you had spoken to doug about this idea of what you called the cocktail party test to determine how a brand is doing relative um to experience do you mind explaining this concept and then doug i'd love to hear your thoughts on when you first heard rachel say this and and how you think this relates to what we're experiencing now yeah sure so uh you know prior to story i was a consultant for for 10 years and uh one of the exercises uh i would i would do with different clients and teams is the cocktail party test so the cocktail party test is walk in and out of a store and when you come out of the store describe it as a person you met at a cocktail party so what i mean by that is i might say well she was energetic and fun and really interesting and well traveled and had really great stories to tell she'd be really fun to invite to a dinner party now that might be what lululemon said to me and and by said to me i mean the combination of interaction with salespeople what's the store smell like look like what was the music in the background what are all these subconscious things that give us an emotional reaction right um i'll probably get in hot water for saying this but like you know i might say you know well she was nice she but she was like you know a little apathetic and indifferent and didn't have that much of a point of view like she wasn't offensive but i wouldn't you know go out of my way to hang out with her again and that might be the gap like i like the gap i i just went there last week right like i needed something i knew the gap would have a t-shirt i got my t-shirt but uh but i wasn't you know and to be fair right different people and different brands serve different functions in our lives so that they don't all need to be you know ecstatic in dinner party guests but but for me it's when you walk out of a store if you were to describe it to a friend or to someone else using adjectives typically associated with a person what would those be and that's usually a healthy indicator of whether or not you'll go back to that store again it's it is it's it's an interesting it's it's so um it it's deceivingly simple as as a test but it's really really relevant and when rachel and i were talking about that it really made me think you know we've always sort of defined positioning um you know in terms of am i luxury am i discount and more recently it's sort of been am i convenience based or am i experientially based you know we've sort of tried to triangulate the position of a brand in a market along these kinds of of spectrums but it seemed to me and and that's when i heard rachel say that sort of ignited this thought that this idea of a retail persona where a consumer walks in and immediately within a few seconds immediately sort of understands who you are as a retailer what is the function that you um that you fulfill for that person are you a taste maker brand are you a storytelling brand are you an artist brand that creates these magical camp experiences are you an engineering brand that focuses on product like product and precision and engineering prowess that's your strength um so coming out of that i was like my my head was ignited you know i was like okay so there there are these archetypes that will survive in the future of retail because they provide this clear purpose and it sort of sparked for me the idea that purpose the purpose you fulfill in a consumer's life is the new positioning and if you if your your answer to rachel's question like what would i think if i met you at a cocktail party is yeah sorry yeah you're done you have to fix that problem it doesn't matter like big data doesn't matter the use of ai doesn't matter hiring the right people doesn't matter if you don't have a purpose in a consumer's life you're finished and you've got to fix that problem so i think it's a it's just a brilliant way to sort of put your brand under the microscope so it sounds to me like when i'm hearing rachel you and doug you describe all of these elements that contribute to that feeling that you get when you walk away you know obviously so much of it is what you see what you hear what you can touch but another really big missing piece um and i think a huge piece of this is really how these experiences are delivered by the people that are serving them in store so you know um camp i've been in the camp store a couple of camp stores in new york city as well and had incredible experiences um and ben you know they call their their staff camp counselors and rachel you mentioned that you used to call your associates storytellers and i love that um really strong point of view as what what purpose those people in store provide to the people that are coming in and the people that they're interacting with would you say that this is the is one of the most important pieces and if if to further that i'm really curious to understand where does it fall down what are the elements that if they're missing can create you know the opposite effect um and and really leave maybe a bad taste in someone's mouth because for me in my thinking hearing you guys hearing you guys go through that i would assume it would be store associates but explain that a little bit where you think people fall down i mean for me you know i would always as a kid roll you know i'm four generations of retail and uh my mom was always obsessed with customer service and uh she'd always give feedback when we were younger in stores uh sometimes constructive sometimes not and you know i'd always like roll my eyes or be embarrassed and i'm like mom it's no big deal but you know what like she's so right it is the biggest deal and i think like i don't care how many screens you have in a store or vr or ar or video games like if you can't provide badass customer service forget about it like just don't bother don't have a store is what i would say is like you are in that business and you are in that business now more than ever in my opinion and this is not the you know sexiest new technology or whatever bells and whistles but i just like i'm passionate about this i'm obsessive about it there's a story i went to recently in santa fe on a little road trip called santa fe dry goods i got a handwritten letter after i was there you know i bought a few things nothing that was going to materially impact their business and and that was just so awesome like oh a handwritten letter like um but i just think you know it's interesting just picking up on what doug was saying before that i really like how he's he synthesized and articulated um about uh persona and purpose coming together is you know we think about discovery as it relates to product right um and experience and i think on the persona piece what part of the litmus test is also distinctive you know what is it that my people are you know um sharing or what message are they spending that's distinctive right what what ben's energy is with his camp counselors is one and what ours is with storytellers is another um and so it's kind of like if people are your product what is it how are you gonna make sure that their interaction their language their value proposition is distinctive and memorable and i would you know there's um i would take it a step further we even did that with our vendor community um so we went back to the source and you know there's this amazing woman christina who worked uh on my team who is our vendor relations manager we hand write thank you notes to all the vendors we work with um thanking them for supplying us with products and stuff like that so i just think it's like a back to basics and the importance to relationships and now i'm just rambling so i'll let doug china um you know we were talking before we got on the broadcast today about just sort of the evolving landscape and it and it seems to me and i mean this is um sort of you know uh insight hiding in plain sight i suppose but brands like alibaba walmart jd.com um amazon who could forget amazon i mean these guys are going to just be on a new level of enormity when we come out of this crisis and they're going to be more pervasive in the lives of consumers their marketplaces will have expanded amazon just announced is going into luxury yesterday they're tenacious that they're they're definitely going to make inroads but what they're going to do is they're going to force a lot of large national retailers to become mini marketplaces so target and kroger and these these brands are going to realize that these these apex predators now are an existential threat and oh we've got to open a marketplace to compete that basically puts every other retailer in the world into a position where they become a specialty retailer they're not a they're not a global marketplace they're not a national marketplace so guess what you're a specialty retailer oh by the way guess what you're experiential too because your consumer is going to demand it i mean unless you're a dollar store and and who knows even how long dollar stores are going to be around if amazon has its way but everyone else is especially a retailer so to rachel's point it's almost a non-starter if you're not delivering a level of differentiated customer service it's a non-starter uh you've already lost you know or unless you know perhaps your costco and you design your experience so that it is very low touch but it's still an awesome experience and people enjoy it that's fine but you've got to provide that basic level of satisfaction otherwise um and and it really you know to rachel's other point i believe that you can put all the screens and bells and whistles and technology into a store but if people in the store are not ready to support that uh with with great customer interactions then it all falls apart and you know interestingly too about ben kaufman is that with camp i mean ben's taking advantage of the the resident community of actors and theater people in in new york you know he's he's capitalizing on that pool of talent literally to to power these experiences so it's not just somebody who's willing to work weekends and nights and doesn't mind you know um starving on a retail salary these are these are people who are bringing real skills to the game yep i agree now um on that doug you mentioned the bells and whistles and technology and we've the whole conversation we've been talking about all of these various elements that contribute to this experience jeffrey asks how much is too much so many stores are defaulting when they think of experience they think of loading in as much stuff as they can within the four walls and you know jeffrey references here that there's brain studies that that have proven that we can only really remember so much at one time and i think this is an interesting point and it's probably important to differentiate that what i'm gathering is that the message here is not necessarily to just load in as much as you can to the four walls but really to uh rachel you mentioned before authenticity and how can we create experiences that are authentic um is that is am i correct in assuming that that we're not just talking about loading in as much as we can and if so how do we go about thinking through how to create thoughtful experiences and not just any experience we'll do i mean i have a pretty short answer to that so i would say you know to me it was never about filling a quota okay we need 10 experiences we need this we need that um whenever we look at um an element integrating an experiential element in store we asked one very simple question am i giving the customer an experience they can't get on their couch an ipad with a website on it or an ipad with a video on it unless it is original content that it is adding value to whatever it is that you're showing in that split second and it's short in its suite is not that and so for me it's like if you can do it at home then don't do it in the store um so it's not a long answer but i think it's just that's a very easy way to saying are you adding are you creating something that someone isn't gonna get outside of your four walls um and that will create an emotional experience i agree um and and this is part of my gripe with uh with flagship stores you know all of us you go and you commit to you know forty thousand square feet on the champs-elysees and guess what you have to fill that space and oftentimes it is it's filled with you know novelties and sideshows uh that aren't relevant to the consumer's experience it's interesting you know um when i was when i was sitting down sort of thinking about this whole notion of experiences for the book i thought about this issue of size that we you know we sometimes and i think this is part of the knock on experiential retail is that we assume that it's massive it's expensive etc but you know i was sort of comparing it to cuisine and you know when we go and we have a really really great you know michelin star meal oftentimes you get these tiny tiny little portions and our inclination is to think that oh they're serving me small portions so that they can just make more money right but there's actually a physiological reason for small portions and that is that your taste buds are most excited by the first few bites of something after that point it's all just you know more of the same uh so the first few bites uh really ignite your senses and and ignite the experience and so it's it's smaller portions across more courses that's that sort of thing and i i take the same view of experiences you know some of them some of my most cherished experiences were quite small in size there were you know as rachel said it's a gesture sometimes it's just you know wow that was really a thoughtful gesture and really you know kind of sat well with me emotionally these things don't have to be massive 40 000 square foot circus sideshows they just have to be meaningful they have to be relevant and they have to be at to rachel's point something that i cannot experience at home and i think if you get those three elements correct uh you'll be successful you know and then just keep changing it up dennis has a follow-up question here um rachel this is for you he's curious to know when story launched did you have an e-commerce site this is something that i don't know either and i'd be interested to know uh we didn't uh you know there's early interviews with me where i'm like oh we'll have e-commerce by the end of the year and 13 stores or whatever i had no idea what i was doing um uh we didn't have it in the beginning just because of like you know i borrowed money from a couple of friends and self-funded the business and like i i had no i would idea idea what i was doing period online offline so the plan was always to have e-commerce but then the store became such a intellectual playground for me and so every new story new theme new partner new collaborator was you know an opportunity to test a different theory or you know leverage the store as a living lab and so i just had so much fun playing and learning about physical and frankly there was so much happening on digital that i always said if we did digital there had to be a value proposition that was differentiated in the same way our physical experience uh was differentiated and um yeah we i just had too much fun playing in the store and never kind of got around to it but uh i'm more curious about it now now than ever but uh but yeah nope not in the early days and then rachel i have a quote i have a question for you sorry riley i just have a quick question for for rachel rachel you you um part of your career you spent time with macy's you built market at macy's some really interesting concepts i just have a question for you going back to this this notion of of size and scope um you know it's no secret that the department store channel as a channel has been in in turbulent waters for the last number of years perhaps decades do you feel a that a department store an entire department store could potentially move to a model like story where it's combination of product revenue and and call it sponsorships or collaborations and if so how would you go about it yeah i think um well i'll caveat my comments on my own and not based on my time at macy's um i think yes yes yes and yes uh in terms of that you know can you take a department store model and make it based on a media model yes you know i think there was a question or a comment about you know department stores can they be used as mixed use space yes i mean to me i think you know there's a a renaissance a new frontier like there's you know uh you know again i think it's hard for any public company right now to do anything innovative or risky but i would say the greatest risk is to not take a risk you know most harvard business school case studies will tell you you know around innovation in certain junctures you know something similar but um but i think that you know in terms of how i would do it um i would start with a blank piece of paper and i would build a team um that's cross-functional and integrated in a mix of talent from different industries i think your point bringing up camp and them hiring actors is a great example you know i mean i think the days of saying oh i want to hire someone with 15 years store experience well the customer 15 years ago is not the customer of today i'd rather the person who's a quick study who i can train who's going to create a new script in theater for the customer of today so i think it's all about looking under the hood of the car and i think you know i'm i'm so grateful for my time at macy's and you know really what that was all about for me personally was so much about learning and it was about how you scale new service and training models how do you onboard small businesses at scale and so you know i would i would say how do you build a team differently so i would start with the nuts and the bolts and the screws and then get a hammer and a wrench and and start building uh a cross-functional team from different industries and uh yeah i almost get the sense that it's about sort of you know um going away from considering your business to be this massive enterprise where you you know sort of enter into agreements with different vendors and you sort of uh operate against these status quo models of wholesale distribution to retail markup etc etc it's more just sort of saying okay look what we are is we're just we're a platform we have space online we have space in the physical world we have audience we have people at our door each morning coming into our space so we are a platform for experiences to happen and what we need to do is make it easy for different businesses different ideas concepts to plug into our platform even for a short period of time and and just come to life you know let's make that let's make that an easy process and so we just become as an organization this you know very liquid uh flexible platform that can accommodate all kinds of new things at any given time it just seems mo so many department stores are just sort of like they're just tunnel visioned in on no it's about margin per square foot that's that's all it's about it has all it'll ever be about you know um and yet you know company like amazon just seems to think of itself as being this uh amorphous uh energy that can just do whatever it wants and i think that's sort of their superpower you know um but anyway i guess one day maybe that we will have a an experiential department store who knows yeah so this brings me nicely to a question from paul that i think will it has to be on the minds of others that are listening is okay it's all fine and dandy to say that we want to include more experiences at retail and to be more critical of the traditional retail metrics so how the hell do we measure experience um and doug i know this is something that we've talked to many clients about and we often have internal discussions about and rachel i'm sure this is something that was a massive focus for you at story so start to talk us through how brands can begin to think about metrics in this new new retail age um i don't think it's a one-size-fits-all answer i think it really depends on who the brand is and what the objective is so when we worked with partners at story they had we had one of four deliverables um that we tracked against so our kpis in evaluating the roi of the sponsorship dollars were either based on earned media and kind of pr marketing um a second was r d so like when we worked with sigma and we did wellness story we had very clear deliverables where they wanted certain insights that they could apply to a project they were working on so we were we kind of came out of their r d budget um third bucket is uh licensing um you know we worked with people like nickelodeon and uh usa excuse me show mr robot and integrated different licensing partners um and along with that lots of collaborations so we tested out new potential licensing partners for people um and then the fourth bucket was uh using the store as a studio is how did we leverage the environment we created you know as as as a studio for people to broadcast create and share content so um i don't think it's as you know it's as simple as one answer um and you know i think it's just knowing what the deliverable is and tracking against it yeah i know in rachel's world too i think in in the story world i don't want to assume too much but in in the world of story you had the added complication of brand partners coming to you and saying you know we we have this is our objective right you might have divergent objectives between different brands png versus somebody else you know might have completely different um objectives i guess for from my my standpoint if i'm um you know i don't know if if i'm um glossier let's say um i think it's fair to say look i go online and i buy impressions that's what i do i buy impressions i i buy the ability to expose consumers to my brand and there is a market value for those impressions and i know what it is because there it is it's on my operating statement i think it's fair to say that what we need to do is we need to establish what is an in-store impression all other things being equal and to and if it is a positive impression what is a reasonable value for that relative to other forms of media in the marketplace and i know it's not an exact science right i mean how much greater is an awesome in-store experience than than a really great facebook ad if there is such a such a thing as a great facebook ad but but what is the offset i don't know i don't know what it is but i think that we have to start making some assumptions about that value because the problem is if your stores just keep selling less product every year but you're not accounting for the media value that those stores have in the marketplace and their their ability to become customer acquisition vehicles if you're not accounting for that then you're just looking at at declining p l's every year and you're just lopping off more and more and more of your stores until you simply don't exist so i think that if you look at it in the final analysis you say look here's our four-wall sales of product here are the sales online that we believe that this store is responsible for within its catchment area or we can reasonably attribute to it and then finally we saw a million customers last year and we estimate that each of those customers probably has a market value of two dollars if we were to go buy those impressions on the open market and so the store has just created four million dollars in value for us i think that's a perfectly reasonable assumption and one that we have to start making you know otherwise we're just gonna we're just gonna disappear all the retail i agree okay we've got three minutes left and before we close out i have one more question for both of you rapid fire who do you think is doing this well if you can just name a few retailers that our audience can maybe look up after that they've maybe not heard of before or really anyone large or small that you think has left an impression on you personally or that you know of through your work in the industry so specialty retail uh i'll say santa fe dry goods won me over with my last visit and i'm always my aunts are always as best merchants around as martin patrick in minneapolis unbelievable store anyone out there if you haven't been and you're out in that area it's it's worth the trip um i'm obviously biased but i'm very impressed with how ben has pivoted and evolved his team and so i think uh following what camp is doing is really exciting um as for big stores i've always been a fan of selfridges and so i think uh i'll also point out that selfridges is private so i say that because they can do things that i that in reality i just don't think public companies can do but i think for 20 years they've been fresh and relevant and i've always been very impressed with them i guess uh for me um yeah i agree with rachel on selfridges i think salvages is is and always from its genesis has been a a very theatrical uh retailer um so they do a great job but you know i i also like um when we were in tokyo we visited a bookstore called bunkitsu and and the this is sort of the ultimate test i love finding stores that are in really desperate channels in channels that are under siege but they change the model around and they create a new experience bunkitsu is a bookstore that charges you 15 to get in um so right off the top it's like wait a minute there's an admission fee yeah there's an admission but that gets you the license to sit there all day read as much as you want they give you a bottomless cup of coffee there's a cafe they merchandise their books completely differently so they don't organize things in the usual way they might have all the books that are read they're going to go over there all the books that are blue we'll put them over there some books they hide so you have to find them in the store you have to crawl through the store to try and find it i mean it's just kind of crazy stuff but then they build in events there's community there's media in the space and it's just a completely different take on the bookstore so i look at someone like that and i say you know what bravo you know you're you're completely rethinking the whole model fantastic we're at 12 o'clock thank you everyone so much for joining us we really appreciate it thank you so much to rachel for shedding all of her incredible energy and creativity and insights you're the best thank you thank you thank you for everyone else i'm really interested to know what you want to hear from this live stream series we are going to be creating more and this is the last scheduled stream that we currently have but email me with anything that you think would be a compelling and interesting discussion any guests that you think would be great for the show we are all ears and out and open to hearing it so i hope you all have a wonderful rest of your day thank you for tuning in tuning in from all around the world and we will see you next time thanks everyone take care thank you rachel

Channel: Retail Prophet

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Id: CWneIId8h2Q

Length: 60min 49sec (3649 seconds)

Published: Thu Sep 17 2020