If you want to be happy, recent research suggests, you should spend your money on experiences, not things. It’s a wise sentiment, with income being a limited resource and all. You work hard for your paycheck. You want to get the most out of it.
On the other hand: Shopping is fun! Thanks to the Internet, consumers can make a conscious decision to shop smarter and make more-informed purchases that aren’t based solely on whatever the lowest price point is. And in a few years, it’s only going to get better. We asked a few of our Most Innovative Companies in Retail for predictions about what the future of buying stuff looks like. Here’s what shopping—both online and off—will look like in five short years.
The mall is practically a rite of passage for cool teens cultivating a social life. But with brick-and-mortar on a decline, malls will need to look beyond the RadioShacks, Aeropostales, and Cinnabons to stay busy.
Enter Westfield Labs, a San Francisco-based entity that is working to rethink what malls are capable of, often with a sprinkle of digital savvy. "Brick and mortar provides a place for brands to interact and connect with their customers in a way not always possible online," Westfield Labs' chief digital officer Kevin McKenzie wrote in an email. "It allows them to give a physical face and presence to their brand and to be a part of local communities. While sometimes a shopper just wants to make a purchase, other times they want to see, touch, and experience a product before making a purchasing decision, or maybe even just be inspired." (It's that sort of thinking that's powered subscription box services like Birchbox—and our country's growing obsession with such retail experiences.)
Part of that in-real-life retailing requires taking pressure off the shops—and minimizing risks like expensive rent. In San Francisco later this year, the company is launching a new concept in Westfield San Francisco Centre called Bespoke, a "trifecta of coworking, technology demonstration (demo) and event spaces." One of Bespoke's most notable elements is rentable pop-up space that tech and fashion retailers can rent out temporarily. Instead of signing a multiyear lease, brands can use it as an opportunity for customers to experience their product that they wouldn't have online. As McKenzie explains it, his new idea will "allow brands and retailers to beta-test the physical retail space without the commitments of traditional storefront." For brands, it means less risk. For American malls, it means a constant dose of freshness. For customers, it might even be a reason to return.
Who might be interested in physical store space? Perhaps a new breed of online-native retailers. Take Frank & Oak, a Montreal-based online menswear "club" that is already experimenting with expanding into brick and mortar as a marketing vessel.
It’s as much (or maybe more) about branding as moving units. "The store of tomorrow is less about being transactional and more about the experience and ability to use the store as a media platform," says Ethan Song, Frank & Oak’s cofounder and CEO. "More important than the transactions we make is the idea of creating a sense of place and a feeling of community when a consumer steps into our stores. Allowing people to experience the brand firsthand and in person allows this sense of community to flourish. Incorporating things like social gatherings and coffee shops in our stores underlines our commitment to building not just a store, but a place people want to be."
Eataly is difficult to describe. My colleague Austin Carr called the New York branch a "50,000-square-foot Italian grocery market-cum-restaurant emporium-cum-enoteca slash bakery slash cheese shop," which is about as concise as it gets when describing the Mario Batali-backed food mecca.
And it’s an experience that Eataly CEO Nicola Farinetti says can be duplicated nearly anywhere, even in cities without the density of a New York or San Francisco. "What was indeed perceived as a very advanced concept when it was first created, to us is a traditional layout modeled after every little Italian town, in which you have your trusted butcher, fishmonger, baker, pizzaiolo, barista, and gelataio," he says. It’s about telling stories and delighting urbanites with old-world charm—not unlike the extravagant Las Vegas casinos of the '90s.
"Our Eatalys in Italy are not always as big as the ones we have in the States, or in other Italian cities like Torino, Roma, or Milano," says Farinetti. "However, they still work very well for us. This demonstrates that we don't necessarily need a huge space to tell the stories behind the products we sell, and grab people's attention and curiosity in doing so."
Instacart, the nearly three-year-old delivery startup founded in San Francisco, believes that stores ranging from Costco to Whole Foods will embrace a same-day delivery model that relies on the service’s army of independent contractors to get customers their groceries in hours, not days.
"The pace of life is faster than ever before, and we are all simply too busy to wait or plan far in advance, especially for daily essentials like food and groceries," says Apoorva Mehta, Instacart’s founder and CEO.
So why don't large grocers hire their own delivery people? Why is Instacart's model the future? "Financially speaking, Instacart is a much more cost-effective way for retailers to offer fast delivery service to their customers," explains Mehta, who says the company's labor pool can hit multiple retailers in a day to reduce costs and increase efficiency. "We can pick up multiple orders at once, for example, and drop them off quickly within a small radius. By applying cutting-edge technology, volume pooling, and a laser focus on software and logistics, Instacart is able to offer delivery services in a much more cost-effective and user-friendly fashion than any retailer can themselves."
What does all that startup-speak mean for the average consumer? Eat up!