California Apparel News

Through the toughest periods of the Great Recession, the business model of the physical store proved sturdy and tough enough to survive the worst economy in decades and continue to be an integral part of the fashion business.

But the model of the bricks-and-mortar store is changing. E-commerce and technology are transforming physical stores and will continue to change how consumers experience shops and what entrepreneurs and brands expect from their retail locations. California Apparel News spoke to some of the people in the vanguard of this change and what they see on the horizon for what stores will look like and who will work in them.

The panelists include a retailer, a mall owner, an architect and a brand developer.

Erik Joule is the president and chief merchandising officer of the brand Alternative, formerly Alternative Apparel, which has three boutiques inspired by new ideas of how to run a store. The Alternative stores are located in prominent retail neighborhoods—Abbot Kinney Boulevard and Larchmont Village in Los Angeles, as well as Hayes Valley in San Francisco.

Adam Derry is the chief executive officer of ADBD, a Los Angeles–headquartered creative brand-development agency, and owner of the ADBD Fairfax retail stores.

Giorgio Borruso is the owner of architecture firm Giorgio Borruso Design and winner of international architecture awards, including the “2013 German Design Prize,” the “American Architecture Award” (2010 and 2007), the Retail Design Institute’s “Store of the Year Award” (2004, 2005, 2006, 2007, 2009 and 2010) and the “RedDot Design Award” (2007, 2008, 2009 and “Best of the Best 2012”).

Shaheen Sadeghi is the founder of Lab Holding and developer, owner and manager of specialty shopping centers The Lab, The Camp and Center Street Promenade in Anaheim, Calif. In 2003, The Lab celebrated its 20th anniversary of being an “anti-mall,” receiving global press attention for being a retail center that defied convention.

How will e-commerce change the experience of the physical store?

ERIK JOULE: With omni-channel in effect, shopping is simplified because it doesn’t matter where the transaction happens. For the companies who have thousands of stores, such as the Sears and Walgreens of the world, it will transform the less-profitable doors to warehouses. It sounds theoretical, but it is a very real conversation. We are at the cusp of change.

ADAM DERRY: We’re going to see them blend and cross over. Physical retail will feel more like a gallery. Retailers are being forced to curate products better. For stores, they’ll hire curators, more than salespeople. They are younger, more in-the-know. Certainly, they are people living the life they are selling. I’ll overuse the word “curate.” The savvy shop owner has curated a staff and a lifestyle around him. The medium of the Internet and connectivity with cellphones allow shop owners to know consumers holistically. Shop owners know them by name because of their Instagram accounts. They really develop a relationship with them.

GIORGIO BORRUSO: We are living and working in a complex and exciting time. The idea of connectivity has finally reached the area of retail design. It has been (and still is) a slow evolution, in which learning to use technology in an intelligent, organic way is the ultimate goal. Virtual and physical stores are two aspects of the same whole; retailers will achieve the greatest impact and success if these are imagined, designed and built together, seamlessly and intuitively, able to satisfy the needs of a sophisticated customer base. This is one of the most interesting challenges big retailers face today. E-commerce and bricks-and-mortar stores ideally complement and augment each other. One can’t survive without the other for too long. The future of retail belongs to the cohesive and strategic interface fusion of the digital and physical spaces.

What else is influencing the experience of the physical store? Is it farmers’ markets? Nightclubs?

ERIK JOULE: It is the layering of a multitude of experiences. At the Toms flagship on Abbot Kinney Boulevard in Venice, there is a coffee shop in front and a lounge out back. Like a website, where you can flip back and forth on different pages, stores will create a similar concept in physical spaces. With our very rich digital lives, we want diverse analog experiences that are organic and intimately localized.

SHAHEEN SADEGHI: Twenty years ago, it was all about consumption. We’re less about disposable, more about products that are meaningful for us.

We’re seeing a cultural shift where customers are consuming less and what they buy is of higher quality and greater longevity. The educated customer now recognizes that it’s much more sensible and a better investment to buy one pair of quality jeans to wear the year through rather than half a dozen poor-quality disposable jeans. Retailers now have the added responsibility of just not selling stuff but to develop community, education, the arts and other types of programming. An example within our SEED People’s Market [at The Camp specialty retail center] is that we have a juice bar, yoga studio, classes and seminars, and artisan gatherings on a regular basis. This is what we feel will be a significant difference in the physical store of the future. Content will be an essential part of future retailing.

As retailers, we have responsibility not just to educate but to bring out intrinsic value to our customers. It is something that you can’t do on the Internet. I want an Eric Clapton CD. Why don’t I download it? But what if one store has Eric Clapton come down and speak about the CD? The value of that CD goes up. We have to do a better job at the apparel side of bringing that other aspect of community education to retail.

What is the story with staff and retail workers? Will they have a place in the store of the future? Do you have a forecast on the future of retail staff?

ERIK JOULE: I do believe that there will be an element of self service, though it will not overtake the entire platform.

Mobile payment technology will grow more prominent as it removes the awkward moments of monetary exchange in the store and changes the retail experience into something more interesting. I think store workers will have to be more multifaceted.

As the heightened expectations from consumers continue, staff will have to become storytellers and community managers. At Apolis in downtown Los Angeles, you can get tea [and drinks] that [are] organic and natural.

The space can feel like a community center; it’s a feeling of life. If you think about Apple, it has been delivering that concept for a long time—not just transactional experiences but ones that are meaningful.

ADAM DERRY: There will be less staff. The reality is that there are less people needed. But there will be more of the right staff. They’ll be the physical embodiments of the store 24 hours a day. They are the brand—at 1 a.m. at the club or 10 a.m. in the conference room. They are the store. It is such a big role.

How does technology affect retail?

ADAM DERRY: There’s 3-D animations, digital reflections of outfits. We’re going to be seeing 3-D printing. We’re going to be seeing a lot more technology with QR [quick response] coding. It will change the idea of inventory. There will be digital files that have yet to be printed. Inventory control will change with technologies. You can print plastic, metals, textiles in all three dimensions. You will be inspired by the products and be able to print to exact specifications. It is a bespoke movement. That is how fashion used to be—have a tailor put it together. Now we can download it.