Rachel Shechtman just launched her new venture, A Startup Store, in New York's Chelsea neighborhood. The store, still in "beta," currently features a rotating selection of startups and their products in a physical retail space, including: Artspace, Birchbox, Baublebar, Joor, and Quirky. But A Startup Store will be ever-changing and ever-morphing. Today it features merchandise from startups; come back in February and it will look totally different and feature products centered around the theme "Love." In fact, the store will change products and physical design every 4-6 weeks. Shechtman wants her store to be a living, breathing community. Here, Shechtman explains why, although A Startup Store is a small space, it might be a big idea in the long-troubled business of physical retail outlets.
Fast Company: Where did the idea for the store come from?
Rachel Shechtman: It really started when I was 12 years old. I was at a gift sale with my mom shopping for wholesale bar mitzvah favors and I was like "Oh, my god, you can have a job where you shop for a living? I want a job like that!" Ever since, I've been in training for this. I've been a consultant for nine years. I took a six-month job at Bliss Spa, which turned into nine years consulting first at Bliss Spa, and then with TOMS Shoes, Gilt Groupe, and other brands. I've always been really excited about new business models and mashing them up. I've been talking about this idea for more than seven years. And one day I was driving with Blake Mycoskie from TOMS and he said to me, "Shechtman: enough of this 'someday' stuff, you just have to do it!" So I did. The basic concept is that A Startup Store is a store in a retail environment, a space that has the point of view of a magazine but it changes every 4-6 weeks—like a gallery—and yet it sells things like a store. A Startup Store is our first exhibition. We're in beta because I don't think it's fair that digital companies are the only ones who get to be in beta. We have our official launch February 1, with our next exhibit, "The Love Store."
How will "The Love Store" be different than a Valentine's Day section at any big retail store or specialty shop?
What makes Vogue different than Harper's Bazaar is the point of view of the editor in chief. We see ourselves as editors and buyers and merchandisers. What's different is the type of products we source and how we source them. We also have a strategic relationship with Architizer, so every month we'll not only have different products, but we'll also have different architects reinvent the space. [Architizer is a web community enabling new ways for architects to interact, show their work, and find clients. It describes itself as "an open community created by architects for architects."] We'll be telling stories through hanging signage and wall installations. This is transactional storytelling. No iteration of the store is ever repetitive, whereas if you go into a Valentine's Day section of a department store, they're using fixtures that month that they use all year round.
It seems like your model requires you to have a product mix that is just there long enough to be successful, and then you are tossing everything out and starting all over again a few weeks later. Is that model sustainable?
We'll be profitable very early in our first year. I think the untapped frontier of advertising is retail engagement. We're selling sponsorship of the store for anywhere from $50,000 on the low end to $175,000 on the high end. In the same way you might have "MoMA" put on an Andy Warhol show made possible by Procter and Gamble, we will have sponsorship within the store. In February, you'll have "The Store" presents "Love" made possible by a dating site or some company that is relevant to the theme. Later in the year we'll be rolling out an e-commerce platform which will continue to sell some of the more popular products from individual exhibits.
It's rare to find a new business today where online is secondary to physical, but it sounds like the online component is secondary in your vision ...
It is. For us, it was really important to have a physical place for people to come. Today there are so many ways for people to communicate, so many devices, so many networks ... there's been a huge focus on digital innovation but not as much innovation has taken place in the human experience. We live and thrive off being with other people. The physical has been the forgotten child for a while. Tactile human experiences are incredibly important. There's plenty of content and community online ... but there aren't a whole lot of physical environments that bring together content, community, and commerce.
But don't people come to expect they can get certain things at a store? How do you get people to understand and accept that it's a changing store and they can never step in the same river twice—even if they liked the river the first time?
People know where they can go for things that they know that they want. They don't need another GAP or Apple Store. They need an environment where you can discover something new. 75% of the people who have come into the store in the past week have given us their email addresses because they want to know about the next theme. They look at the store like a journey and they want to come along with us. People are saying "Oh, my god! I've never heard of something like this." People know about pop-up stores, but the idea of a constant pop-up, or a retailer acting like a gallery and talking like a magazine, that's new.
You're also going to close down regularly ...
We'll go down for 3-4 days to change over. We have to because we will be completely rebuilding the space for each exhibit. But as we're building, our windows will become our version of a billboard. So even when the store is down there will still be a purpose. Some months we might invite people in during the building process, and there might also be months where the windows are uncovered and people watch us build up.
Magazines usually have an editorial point of view. Is there an additional perspective you're trying to communicate?
I want to tell a compelling story through merchandise and events. I believe in the concept of giving people 70% of what they understand and the other 30% should be surprise and delight. So in February, when you come into "The Love Store," the 70% might be flowers and chocolates but the 30% might be a video booth where you record a video of your first date, then we might have an event where we screen a short film of those videos. Every single month you can come in and buy something for $20 or for $2,000. Every month you can buy something for a 20-year-old or a 60-year-old. The only way that you can have such a broad appeal and still tell a cohesive story is to curate a really interesting collection of brands and products. Everything here has a description next to it, explaining where it came from. It gives it personality and allows the product to become less of a thing and more of a story. We want everything here to be a story first and a thing second. I think the future of retail will always be about consumption. Consumption's not going anywhere. But it will start to change; retail spaces will become more about content and community. People don't just want to go in and buy something, they want to hear a story, they want to learn something. So when we're coming up with a theme or a concept like "startups," we're not only having an exhibit but talks, book signings, film screenings, and other events that complement the theme.
What do you think it will take for retail to look more like that?
I think it's already happening in some ways. Certain mass brands are catching on slowly. For instance, I really admire that Bloomingdales has Clarins skincare on the second floor with fashion and contemporary, which is unheard of—so they're making a statement by editorializing skincare in a fashion context. Or by putting Magnolia Bakery in their men's floor, which they also do.
What does success look like for you?
One goal is to be successful with this first store and then to open five stores around the country in the next three years. But ultimately success to me is proving this new business model for retail. I'd much prefer to walk into a department store and instead of someone attacking me by spraying perfume at me, have someone tell me a story or give me something that I don't expect. I want every store to do this, so go knock us off, bring it on!
Note: This interview has been edited for content, clarity, and length.
[Top photo by Daniele Teodoro; portrait by Drew Innis; other photos by Julie O'Connor; video by Mike Rossi]
David D. Burstein is a young entrepreneur, having completed his first documentary 18 in '08. He is also the Founder & Executive director of the youth voter engagement not for profit, Generation18. His book about the millennial generation will be published by Beacon Press in 2012.