These Retail Innovators Are Bucking the Brick and Mortar Downturn

(Bloomberg) -- Traditionalists who love shopping in physical stores can rejoice—brick and mortar is making a comeback as a way to complement a brand’s online presence, according to industry experts. 

“There’s credibility development,” says Amish Tolia, co-founder and chief executive officer of Leap, which operates retail stores for companies that started out with direct-to-consumer models. “When a brand moves into brick and mortar, it creates this halo to your online business.” 

Tolia spoke with Daniella Yacobovsky-Fiala, co-founder of BaubleBar, and David Munczinski, president of marketplace platform for b8ta, about making the move from e-commerce to street commerce with Bloomberg retail reporter Jordyn Holman. The panel was part of the second annual The Year Ahead: Luxury summit on Thursday. Hosted by the lifestyle group Bloomberg Pursuits, the conference was held at the company’s headquarters in New York. Speakers included  Tiffany & Co. CEO Alessandro Bogliolo, architect Robert A.M. Stern, pastry chef Christina Tosi, and Rent the Runway’s Jenn Hyman, as well as executives from Porsche, Virtuoso Ltd., and Marriott International Inc.

Brands are looking to create multiple distribution channels in their effects to build more genuine connections with customers, Yacobovsky-Fiala explained. 

“Sometimes we really like shopping online and sometimes we like walking into a store,” she said. “It’s about finding a way to connect with customers authentically. People are really looking for a visual and an aesthetic that doesn’t have that repolished, retouched veneer.”

Munczinski—from b8ta, a retail-as-a-service company that operates stores that serve as presentation centers for products—noted that there are four necessary elements for retail: a sensory component, the ability to tell a story, good service, and a seamless presentation.

Having made its debut four years ago in consumer electronics and smart home devices, b8ta opened a new fashion-based marketplace in Los Angeles called Forum this fall. As in its technology-oriented stores, b8ta features multiple brands at Forum that are venturing into brick and mortar for the first time.

“We look at categories where there could be a strong experiential element, but also where we think the retail experience out there in the market today is lacking. And where there’s an explosion of new brands,” Munczinski said. “We are very excited about the beauty space. We’re very excited about CPG [consumer packaged goods]. I have a personal interest in pet retail.”

B8ta operates a lounge space in Hudson Yards called 3den that allows customers to try out wellness and beauty products in on-site showers. Munczinski also said they have great success with ridable devices—something you can’t test out online.

“We’re constantly trying to push the envelope on what experiences customers are willing to go into,” he said. 

To contact the editor responsible for this story: Chris Rovzar at crovzar@bloomberg.net

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