Episode 340
February 23, 2024

Building Retail Right

The allure of building a retail space is strong these days, but doing it right is critical. How do you know when to spend big bucks on fancy tech and when to equip your employees more instead? What is the special sauce to creating an environment where customers will keep coming back? It’s an exciting time in retail and Rebekah and Libby give us insight into why and their take on what is coming in the future in the world of physical retail. Listen now! 

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The allure of building a retail space is strong these days, but doing it right is critical. How do you know when to spend big bucks on fancy tech and when to equip your employees more instead? What is the special sauce to creating an environment where customers will keep coming back? It’s an exciting time in retail and Rebekah and Libby give us insight into why and their take on what is coming in the future in the world of physical retail. Listen now! 

Retail is Alive and Hot

Key takeaways:

- One critical advantage physical retail has over the digital space is human interaction, which can make or break how a customer feels about a brand.

- The similarities between theater and retail highlight the importance of behind-the-scenes work in creating an exceptional customer experience.

- Pop-up shops aren't sufficient for testing physical retail viability, but they can provide valuable insights if brands know what they want to achieve.

-  Well-trained store employees are crucial for creating positive brand experiences and building lasting customer relationships.

-  The future of physical retail lies in personalized experiences, smaller store formats, and operational agility to meet changing customer needs.

  • {00:10:27} - “When brands go into a popup experience, they need to know what it's for. What are you trying to get out of it? Your customer is physically in front of you. That doesn't happen on a website. So how are you taking advantage of that?” - Rebekah
  • {00:14:26} - “What they have in the physical space is one critical, critical tool that they do not have in the digital space, and that is people. Because at the end of the day, people buy from people. And what a customer feels about a brand in a retail space lives or dies by that human interaction.” - Libby
  • {00:21:37} - “We're like, "Put down the expensive tech. First-time retail brand, put it down." Focus that, take that money, and be able to pay each one of the people that you're hiring to work in your store an additional couple dollars an hour more because that is gonna go so much farther…” - Libby
  • {00:32:39} - “Inevitably, if you're gonna build a physical location, you want to do more than just sell things. You want to connect. You want to connect with the customer. You want to build brand affinity. You want to teach them something about your product that they didn't already know.” - Rebekah
  • {00:34:57} - “It is about leaving a lasting brand impression and helping the customer discover something about the brand or the product even if they don't actually buy today.” - Libby
  • {00:45:18} - “Brands are looking for ways to really connect with a customer and give them something that they can't get somewhere else, like with a competitor.” - Rebekah
  • {00:51:11} - “Typically, we say, the first 7 to 10 stores go where your customers are. Then after that, after you've established that foundation and that base, then go where the people are who you want to be your customers.” - Libby

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Libby: [00:00:00] But what they have in the physical space is one critical, critical tool that they do not have in the digital space, and that is people. People buy from people. What a customer feels about a brand in a retail space lives or dies by that human interaction. It can be the most beautiful store. It can have the latest retail tech, but if you have spent a ton of money and resources on getting all of that perfect, but then your people, your training, how your store functions and is gonna run smoothly is an afterthought, you've taken all that money that you just spent on advertising and building and that, and it's just down the drain.

Brian: [00:01:52] Hello, and welcome to Future Commerce, the podcast at the intersection of culture and commerce. I'm Brian.

Phillip: [00:01:57] I'm Phillip. Brian, today is a special day mostly because I thought of something before we sat down to record this episode, and it felt like I needed to confess to you. You know, you see all these videos right now of people that are on their Apple VisionPro, and they're multitasking and stuff. I don't know if you've seen this.

Brian: [00:02:18] A video of you multitasking on your Apple VisionPro?

Phillip: [00:02:20] Well I mean, the video of me is making its rounds on the Internet. And I don't know. Actually, we should have a conversation about which is more cringe. You know, the fact that I was on a walking treadmill plus being on the VisionPRO plus very obviously playing in another window while talking to you on a meeting earlier this week, but I outed myself. No. I was gonna actually say this idea of multitasking during content creation is not new at all.

Brian: [00:02:46] True.

Phillip: [00:02:47] And I feel like I have to confess to you that in the early days of the podcast, I was actively playing League of Legends on the other screen while we were having a conversation.

Brian: [00:02:56] Oh, I knew that.

Phillip: [00:02:57] I just needed to say that to you. Asking you for your forgiveness.

Brian: [00:03:02] Yeah, I mean who doesn't do multiple things while they're podcasting? Everyone. You can see it on every single podcast ever. Everyone that's podcasting is eating a burger on the side or looking at multiple screens. It comes with a shtick. If you listen to certain podcasts, they're like smoking cigarettes. You know? It's a whole...

Phillip: [00:03:26] Brian, Brian. Brian. I wanna know more about that media diet of yours, Brian. The reason I bring it up is that this idea, and it's an age of distraction. Sure. It's also we live in an attention economy, and I think holding attention is its own art form today. And I think part of holding attention is just understanding that doing multiple things at the same time is a means of expressing creativity. Sure. But it also provides a palette on which you can build something for everybody. And that's kind of how we've thought about building physical events, and we did that, I think, with a lot of grace and poise, if you will, at Art Basel. And so we did our 3 day activation at Art Basel this past December, called Muses, and we were on Lincoln Road, in the mall there in Lincoln Road for 3 days, historic Chase Bank building, and we would not have been able to do that, Brian, without our very special guests. And so today, we are joined by none other than the Co-Founders of Rekon Retail. It's Libby Shani and Rebekah Kondrat, longtime friends.

Brian: [00:04:36] Yeah.

Phillip: [00:04:36] Dare I say, now, I guess, co-builders. The two of you really helped us to bring this actual vision to life. So thank you so much, and welcome to Future Commerce for the first time.

Rebekah: [00:04:48] Thank you. Thanks, Phil. So on your grace and poise, actually, I would like to just say that the most graceful moment for you, at least for me, was watching you jump over the moat to set up an illegal light to project the Muses logo onto the building. It was beautiful, I have to say. Very gracious.

Phillip: [00:05:10] Thank you. I ruined a pair of shoes for that.

Libby: [00:05:12] We remember. You were sad. You were sad about the shoes.

Phillip: [00:05:16] Yeah. It was a moment of heartbreak. You know, anything for the show. Right? Anything for the show. So for our listeners, you know, and those who are not terminally online, especially on Twitter, give us a quick rundown of what Rekon is and give us a little bit about why we would have partnered together for such an event as Muses.

Rebekah: [00:05:36] Yeah. So Rekon is a physical retail agency, and we help brands really open stores in a nutshell. Now to be a little bit more specific, we work with largely direct to consumer brands, and we do everything from help them kind of locate spaces... We're not brokers, so we will not be negotiating leases, but we can certainly help with that strategy... To hiring designers, getting architects, bidding GCs, setting up operations, getting employees onboarded, and not just employees that fit the brand, but also getting them trained so that they provide a great customer experience, which I know, Phillip, you and I have discussed at length. And then really just creating a physical manifestation of what the brand has already done online.

Phillip: [00:06:26] Both of you bring your own experience here to bear, but I'm just curious what kind of experience you must have to be teetering on ladders and putting together, you know, hanging things... It seems like the scope of work for an agency of your sort is very broad, and it starts from well, well, well before you open the doors, but the only thing the customer ever sees or appreciates is the actual shopping experience itself. How do you get to that point where you're bringing all of that experience to bear?

Libby: [00:07:01] Yeah. It is broad, and I think what I think we both love so much about it is that it really is taking our years of experience in in-house retail. And then basically, our role is to guide, to advise, but also to roll up our sleeves and get in there and do whatever needs to be done. So to your point about teetering on ladders and building IKEA furniture, whatever it is, that's what we do because we're operators at the core, and we just know what it takes to get things done. And that is a lot of when you're setting up a store or a fabulous event like the one that we did together, it's a lot of what it takes.

Rebekah: [00:07:52] Is this the moment where we also say, we actually also both worked in theatrical venues and did that sort of thing? So it kind of lends itself to, you know, if your brand is on stage, right, for the customer, that background kind of comes in handy.

Libby: [00:08:10] And we talk about that all the time about how the similarities between retail and kind of launching a retail production and theater and the dress rehearsal and all the work leading up to it and everything that happens behind the scenes, literally, that then all come together to create this wonderful experience for the audience/customers.

Phillip: [00:08:36] And the the kinds of brands that you have experience with, just running down your CV. I think, Libby, you spent a good amount of time in The Container Store. Is that right? And Rebekah, I mean, you have a list that's too long to even go through of the DTC hype cycle, for sure.

Rebekah: [00:08:55] Starbucks, Apple are the two legacy, and then Warby Parker, Outdoor Voices, and then Joybird Furniture right in the La Z Boy acquisition era.

Phillip: [00:09:05] I super appreciate anybody who is of the mindset of we get the job done. I think what's really difficult to understand is how much of a job it really is opening physical retail these days. And the reason we called on you, and this could be an interesting way to kinda get into exactly what we had to do for a popup. And maybe you can give me, like, an actual number, but it felt, at the end of the day like we were doing 80 to 90% of the work you would typically do anyway to open a real store. And we did all of that for 3 days, which I think I remember you telling me, Rebekah, once upon a time, "This is why people shouldn't do popups." {laughter}

Libby: [00:09:47] Well, it's not so much as they shouldn't. Yeah. It depends.

Rebekah: [00:09:54] Right. I would say yes, but do not succumb to the siren song of the popup thinking, "Oh, this is a test for physical retail. If this popup is successful," which we can talk about popup economics, but I'm sorry to dash your dreams. Your popup is probably not gonna break even or make money. Right? Depending on how long it is. Different people have different definitions of popups. If it's 12 months, okay, fine. Let's talk about something else. But certainly, if it's 3 days, but if it's 3 months, probably not. But I think [00:10:27] when brands go into a popup experience, they need to know what it's for. What are you trying to get out of it? Your customer is physically in front of you. That doesn't happen on a website. So how are you taking advantage of that? What are you learning from? And so I think there can be really valuable return on investments for popups. But as a let's see if retail works in kind of a very blanket and broad way, that's not realistic. [00:10:57] You don't have seasonality. You don't have... Weather could impact it. Global events could impact it. They don't necessarily happen all the time. Let's just be really clear about what a popup can and cannot do for a brand.

Brian: [00:11:12] That's super interesting.

Libby: [00:11:13] It's not a clean extrapolation from whatever the period of time is that your popup runs for: a week, 3 weeks, 6 weeks, 6 months to now we have a sneak preview of what our actual store is going to be like. It doesn't work that way.

Brian: [00:11:37] Yeah. One of the things that I've been thinking about as you talk is the opportunity with online to offline. Something that you said, Rebekah, was that you helped these brands recreate sort of the magic that they've built online, offline. And the problem with doing something offline is that especially in a popup context, you don't have all the tools at your disposal that you typically would in an online experience. So how do you help digitally native brands sort of capture that moment, or capture the brand? What are some of the ways that you bring that experience into the space? And then, would you have a set of tools that you can recommend towards our audience that if they're gonna do this, what can they do to make it the best that it can be?

Rebekah: [00:12:35] Sure. Well, we're going to get into Libby's all favorite operations because, you know, yes, you can make a beautiful environment that is pleasing to the eye, but without really strong operations, that experience is going to fall flat. Right? It's just gonna look pretty, and then the customer will be disappointed. So I think to kind of start this off and then I'll turn it over to Lib is the brand first and foremost needs to know what its store is for. Who is the store for, and what is it for? Meaning what is that thing that makes the customer interested and convert? Right? And so we worked with a shoe brand last year. We love them. We adore them. They're called Kizik. Their thing is the customer has to try on the shoe. If we have a customer physically in front of us, they can't try it on online. We can show them videos of what it looks like for people to try on the shoe, and they have a very unique construction that you step in. Right? You step right into the shoe. It's like, oh my gosh. They have what they call an aha moment.

Libby: [00:13:38] It's called the hands free shoe.

Rebekah: [00:13:41] Yes.

Libby: [00:13:42] You literally don't need your hands to put it on.

Rebekah: [00:13:44] That's right. Yeah. So, you know, how do we now get to that moment faster? As soon as a customer walks into the store, short of throwing a shoe in front of them and saying "Step into that right now," how do we get to that moment faster so that they can understand the brand in a way that they can't when it's online? So everything that leads to being able to build that is through really strong ops. And so, Lib, I don't know if you wanna say a little more.

Libby: [00:14:13] Yeah. Yeah. Brian, I think it's interesting. You said something like, in the physical space, brands don't have all these tools that they have at their disposal in the digital space. Right? But [00:14:26] what they have in the physical space is one critical, critical tool that they do not have in the digital space, and that is people. Because at the end of the day, people buy from people. And what a customer feels about a brand in a retail space lives or dies by that human interaction. [00:14:51] It can be the most beautiful store, it can have the latest retail tech and snazzy this and that... We kind of sometimes joke when we're talking about over the top design, like a running water feature through the center of your thing. Great. All of that contributes to the environment. But if you have spent a ton of money and resources on getting all of that perfect, but then your people, your training, how your store functions and is gonna run smoothly is an afterthought, you've taken all that money that you just spent on advertising and building, and it's just down the drain because all it takes is one lousy interaction and experience with the human standing in front of you who is supposed to be representing this brand that you want to know about and learn more about and are excited to experience in an offline world. And that's it. The brand has lost the customer. And so for us, that is one of the most important things about working with retailers and setting up spaces is really helping them understand that.

Brian: [00:16:58] This is so beautiful because back in 2022, I wrote a piece called The Asynchronous Fiction, and it's about the limitations of communicating asynchronously. If you think about it in many ways, eCommerce is asynchronous communication. It's actually a fiction. Communication methods are so limited and so storytell-y. It's content. You're just selling through a piece of content. So the only possible way to truly connect with your customers and communicate who you really are and communicate what the product really is and how it all works is to connect with them directly face to face. And so I think you're absolutely right. It's really beautiful. Are there ways to capture the data that you have in that physical environment that you're gonna... You know, people are walking around the store looking at different things. They're talking to different people. They're asking different questions. Brands are so used to having data to look back at when they go try their next campaign, or digitally native brands are at least. Are there ways now, Rebekah and Libby, for brands to be able to take some of those learnings and turn them into something that they can repeat and reuse?

Libby: [00:18:13] Yeah. We're talking about a different type of data here. Right? I mean, yes, there's quantitative data from retail, but this is really, this is the rich qualitative data that can be collected from customers in this sort of environment. And I think the first piece is that the store team, the people who are on the ground representing the brand need to know that it's really important that every single nugget that's coming out of a customer's mouth or every single thing coming out of a customer's mouth could actually be a gold nugget that is really, really valuable for the brand to hear. So employees need to be primed to listen for those things and to ask the right questions and to be able to pull that out of customers. And then there needs to be a feedback loop and a system and a way for that to be communicated back to the appropriate people at the brand, be it marketing, be it operations, be it product, you know, etcetera. But your run of the mill store clerk, if that's who you hire, like just somebody who can push buttons on a cash register is not even going to know that that is a critical part of their job in representing this brand is being a key part of that feedback loop.

Rebekah: [00:19:36] I will say though, Brian, I think you're getting at something that is really important for brands to know that are considering physical is that the tools do look a lot different, and they are a lot less precise than what you're used to online. Like, I can't keyword search what my customer said yesterday unless I recorded them, and that might be a little creepy. And so you are actually relying on the people that you hire, and let's just say that the brand has gone ahead and hired people that are invested and already brand fans and want to see it succeed. But, you know, you build out systems like a Google form that they fill out at the end of every day that listen for what are the top requests? What were the top complaints? What products did they go to first when they walked in? Did they say that they heard about us on Instagram, TikTok, social media, a friend, or whatever? So I think a lot of it is more like what some marketers may consider anecdotal and not like that because it's not like quote unquote hard data, let's say, that you can go back and search. But it is really important. The other thing I will add is that there are companies that will do, you know, "Oh, we'll heat map your store, and we'll see what, we'll track their eyes and see what shelf their eyes are looking at," and all of this. And what I have to say about that is until you, Brand, get to the point where you have done everything that you can to collect the data anecdotally, adjust your strategy per the customer that's coming in, increase your conversion, etcetera, those tools are a waste of money and frankly very, very expensive and will probably tell you what your associates already know within a week of working for you. So that is my soapbox. I will get off of it now. But don't spend... I mean, Nike does it great. Good for Nike. They probably are at the point where they should do it.

Libby: [00:21:37] Yeah. [00:21:37] We're like, "Put down the expensive tech. First-time retail brand, put it down." Focus that, take that money, and be able to pay each one of the people that you're hiring to work in your store an additional couple dollars an hour more because that is gonna go so much farther [00:21:57] for you than this virtual reality trip down into your founder's childhood bedroom or whatever.

Phillip: [00:22:12] {laughter} Very Tony Stark sort of thing. I have this way of thinking about how we had built a retail experience together for that 3 days at Art Basel. And I'd love to do a little bit of an almost a postmortem here thinking about the types of things that we went through that a first time DTC, digitally native brand, moving into physical retail would also encounter. And maybe I can then you know, this is old hat for you. This is what you all do all the time. You're used to the process. I felt like you did an amazing job of helping us work through it, but I tell you it also made me realize having seen it up close that it is its own experience, and it's kind of breakneck. And there's a lot of brinkmanship, especially when it's a timed event. Right? So, maybe we could, you know, let's play a little thing here where we kinda recount the order of events that got us to a successful launch and then ways that draw similarities or contrast against what a DNVB might experience?

Rebekah: [00:23:30] Well, I think we start at the start. {laughter}

Libby: [00:23:31] Start at the start.

Rebekah: [00:23:34] So let's actually talk about space identification and that process to not only identify the space, because like I said, we're not brokers and we're not negotiating leases, but that piece of it is pretty critical. Not only that, but uncovering unexpected site conditions because I promise you, no matter how many engineers and experts you send to that site, there will be something that you didn't expect that happens there. So literally days before you open. Always. It's like a rule. I don't know who made this rule. I would like to have them unmake it, but it's a rule. So it's there. So I think really finding the location and knowing where your customers are. And I think the good thing about Future Commerce is you have a deep understanding of who your customer is, where they're going to be, what they're going to be interested in, what neighborhoods they're going to visit while they were at I mean, this was surrounding Art Basel. Right? So, you know, while they're at Art Basel, we needed to be not literally in the thick of it, but we needed to be close enough. There were a lot of kind of like boxes to check when we were finding that space. Not only that, but we needed an event permit. I mean, you can't just pop up a secret event at Basel and not get caught or we didn't want to risk it. Right? And so I think, you know, that piece of it allowing time for that and something unexpected happened where we found out that, oh my gosh, the deadline for Art Basel permits was 3 weeks ago, 3 weeks prior to signing the lease, and the landlord hadn't told us that. And so I think there are just all of these things to, like, "Okay. Let's find another way." People open stores that don't have anything to do with Basel. So let's just go that route. And thankfully, we had a team of experts that were kind of around us, really great expediter that we were recommended that I think allowed us to do that. But really being able to just be super agile in that process is critically important. And so once you get in the space, Lib, I don't know if you wanna talk a little bit about the setup, the furniture, the, you know, merchandising, all of that.

Libby: [00:25:37] For sure. So then the next part comes with well, I would say before that, laying the foundation to make sure that when we are there in that critical crunch time, the dress rehearsal that we were talking about earlier, that part flows easily. So making sure that the systems are properly set up. We have the product that we're gonna sell systematically entered. Just all those little things, a lot of the kind of stuff that a lot of people would find boring or tedious and that we kinda salivate and get excited over. One thing that I think that I wanna call out was really fun to partner with you guys on, and one of the things I think we did really well, we collectively, I mean, and that brands can learn from is there was such a strong emphasis... Your brand is so beautiful. And this event was so much about the aesthetic and the muse and obviously the art plays a role in it. And so you guys placed such a premium on the aesthetic experience of the space. How the product was gonna be laid out. What was the experience of this shop within the event going to be? And visual merchandising is important. And the lesson from online to offline is that a lot of brands, certainly brands that have done really well in the digital space, they've done a great job of building their websites, but it is a different skill set to, again, have that now we're merchandising our products not as flat lays on a screen on this 2-dimensional space, but now we can have this product with this product. And how do we put them together? And how do we tell a little story and create a vignette about this? And it's just it's different. I mean, visual merchandising IRL is different than digital visual merchandising. And you started, you came to us with that being so important to you guys from the start, which was great because it allowed us to come together and really create a beautiful space. Whereas, again, sometimes brands when they're going into their 1st store, like, afterthought... "Oh, oh, we have to put our product out. Oh, we need more than just hangers in a row?"

Phillip: [00:28:21] There's a multilayered challenge here where there's the product that we care about that we want to sell. Effectively, we wanna move books. That is for me, it's the hero. And the hero within that event is we are launching our new journal for the year. We care a lot about the journal. It's priced at a premium. In order to draw attention to that, though, it does have to be visually merchandised in a way that also leads to other, you know, I would say premium products that surround it so that helps elevate it because you can have a stack of books. I don't know if you ever walked into a Barnes and Noble, but it's just a stack of books. When someone goes over and above and, you know, there's a statuette and there are some plants and then there's, you know, some, I don't know, home goods or some personal styling product. Something that surrounds that that gives you the feeling of a lifestyle beyond just the product itself really does elevate it. And I remember watching you all work and thinking to myself, "This is an unbelievable art form unto itself. This is an unbelievable skill set unto itself." The thing that you take for granted is so many little pieces of intentionality that come into making this feel like, "Oh, it's taking my attention exactly where I want it to go. It's doing exactly the thing I had purposed it to do from the get go, and it took 55, 60 decisions to get it to that point." The web has spoiled us because doing that in real life is so much more difficult than just you know slapping, to Brian's point, slapping an alpha transparency PNG, into your Google Shopping feed because that's kind of the world we live in nowadays. But, yeah, bravo. I can't imagine what it would have looked like if we had tried to go it alone because it certainly wouldn't have had the same, it wouldn't have been anywhere near bringing that product to an elevated audience, in an elevated way. I feel like you did it beyond justice. You really just kinda blew it out of the water.

Libby: [00:31:45] Thank you for giving us the canvas and the space to be able to do that.

Rebekah: [00:31:49] To kind of take that a little bit further, yes, the retail component and the merchandising, but I think what was so great and what also made it so successful, and this is also brands take note, is you knew the most important things to you that this space would deliver for your customer. And so, yes, it would deliver merchandising, but there also needed to be an area I mean, obviously, here we are. We're on a podcast. There needed to be an area where you could have a talkback/podcast. We knew that. We had a sponsor, so we needed to have a specific area for them. You provided all of that. And so I think there are a lot of parallels here, even though the entire environment wasn't a giant store. It was an environment for Muses, and it had a small component of it that was a store. I think there are a lot of parallels to actually creating a branded store environment, because you [00:32:39] inevitably, if you're gonna build a physical location, you want to do more than just sell things. You want to connect. You want to connect with the customer. You want to build brand affinity. You want to teach them something about your product that they didn't already know. [00:32:52] So I think that that piece of it was very much related to a physical store.

Phillip: [00:33:00] I come from the world of 20 years of eCommerce where the way funnels work, at least in the digital realm, is very few people actually buy. So in my mind, I have a mindset of the experience is built en masse for people who don't actually ever pull the trigger on purchasing something, and you still have to make some sort of a lasting impression on those people. And so I'm kind of used to thinking about how the journey goes and what they take with them that's not a physical product. I'm not sure that it works that way in physical retail, but I certainly think about it that way when it comes to our events, and I want more of those events to leave an impression on a number of levels that aren't just buying the book. Please buy the book. MusesJournal.com. But also, for the people that came to the event for another reason I want them to walk away having remembered that there was a book for sale, and that certainly could have been in competition with all of the other visual spectacle that we had there.

Libby: [00:34:03] What you just said really brings up another point. It actually does parallel a lot to physical retail because, yes, of course, stores want to sell goods. However, in absence of being able to convert in that moment with a customer, you hit the nail on the head. You have to leave a lasting impression. Right? That customer may not be ready to purchase myriad of reasons. Money is tight. It's not payday. Whatever it is, it doesn't matter. Today might not be the day that they're ready, but maybe they will be ready in 3 days or 5 days, and you have a website so they can easily do that. No problem. But that store experience needs to make them want to do that in 3 days or 5 days whenever. And so you really hit the nail on the head. [00:34:57] It is about leaving a lasting brand impression and helping the customer discover something about the brand or the product even if they don't actually buy today. [00:35:12]

Brian: [00:35:12] Yeah. I think you're hitting on something, and we faced another challenge actually in building out our store in particular, in that we were also doing an art exhibit. And so we had multiple things happening at one time, and there was a path involved. And I think there were goals to that event that far exceeded making a purchase or connecting with a specific person or in a specific way. It was a whole path of understanding concepts and ideas and having them absorb into the people that experience them. And so one of the questions that I kinda think would be good to talk through is during the process, we actually had to go through how things would be laid out, and I feel like we did a really good job. You guys did a really good job. We all thought through exactly why someone would wanna go up into the art and through the shop. And maybe, Libby and Rebekah, you could talk a little bit more about that process too.

Rebekah: [00:36:20] I think we would be remiss if we didn't talk about Tam, the curator, and just how incredible she was. I think really what a lot of creating a physical space, whether it's an art space, whether it's a store space, you know, etcetera, but specifically for Muses, a lot of it is that, what are the needs of all of the different players? And how does the customer benefit from this journey? And so then let's decide. Let's take that information and decide where to put them. And so some of it is going to be super nuts and bolts. Person A needs power, and all the outlets are on this wall. Okay. We have to put them there. Sorry. Sorry, not sorry. You have to have power. But outside of that, I think it's like, "Okay, what makes sense is a progression?" You come up the stairs, and you come into this room, and there's this amazing iPad, like, VR experience. But then it takes you into what looked to be more traditional paintings and then in through a room with a theremin and then in through a room with a video experience. You know what I mean? So I think it was thinking through and really using the experts like Tam that were involved in terms of what makes the most sense from an artistic standpoint. And how do we as the, I don't know, like physical kind of more producers of the space, how do we actually address all of those without losing the vision?

Brian: [00:37:47] Yeah. It's so true.

Libby: [00:37:49] And then there was everyone's favorite, the orange dust.

Rebekah: [00:37:52] Well, that was way in the back.

Libby: [00:37:56] I don't know Phil and Brian wanna get into that one.

Phillip: [00:37:58] We actually haven't even spoken about that here on the podcast. Maybe, Libby, if you could, give us the context if you would like to.

Libby: [00:38:06] You want me to tell the story on this one?

Phillip: [00:38:09] Sure.

Libby: [00:38:10] There was an amazing, amazing artist who had a, what would you like, an interactive right? Like, an interactive, art experience, the muse of dance, Arantxa Araujo. And we, unbeknownst to all of us, Future Commerce team included, the performance, which was a wonderful part of the experience. Let me just say that. But it was a little messy. You could say it was a little messy. It involved this orange chalk dust that got thrown and kind of blown with a leaf blower everywhere. And operationally, I would say that was a challenge that we weren't ready for because we didn't know about it in advance. And so it really became, this was talk about being agile in the moment. Needing to get the space, reset the space kind of back to clean and perfect each day, grand opening ready as we call it in retail so that the guests the second day and the third day could have the same experience and also protecting the tech and the integrity of some of the rest of the things happening in the space when you have this chalk fine orange dust being blown everywhere was, we had fun with that one. Let's just say fun with that one.

Rebekah: [00:39:47] Thank goodness for that shop vac on sale at ACE Hardware.

Libby: [00:39:50] Yeah.

Rebekah: [00:39:50] But I think to a little bit your point, Brian, what you're getting at is all of this is invisible to the customer. They don't care nor should they. This is the experience that we're building for them, and we need to not fall short of it. So if we gotta run down ACE hardware and buy an emergency shop vac, no problem.

Phillip: [00:40:15] There's being prepared, and then there's being prepared for the unknown. There are things that are gonna happen. Of course, they may not be to the extreme that we're talking about here, but there are things that are gonna happen, where you have to make a plan on the spot and you have to adapt. And in this case, I have a wonderful video of one of my team members mopping the ceiling as we were doing the loadout. And that is a thing that nobody had in any sheet, in our operations master, that was not a designated role, and it was not assigned to anyone. But you have to get the job done. Right? So I also think if we were to shift gears a little bit about things that are parallel, I think for me, it was a crash course, and I use that term almost literally. It felt like we were moving breakneck, and we had been working on it since, I think, June was when we officially said, "Okay, we're doing this." We identified the space. We had a lease agreement. We had inspections. Right? We had an engineer come and check things out like HVAC. That's one of the things that didn't go well was we turned up and none of that was working to the way it should have been. And then now you're in a negotiation environment where you're having to strong-arm the landlord or start to make a plan of how you're going to adapt. And do we bring in a third party HVAC team to come in and get some coolers on-site? We're in Florida. It is December, but it's still warm. You have all of those things that have to happen. We had a timed event, so we had a permit that had to happen in a specific period of time, which meant we had, I believe at some point many weeks before our open, we had to have a fire inspection. And that was its own sense of stress of it had to happen on a specific date and time, which meant we had to keep working backwards from there, which meant we had to have visual merchandising already kind of thought through. And we had orders that had to be placed months in advance, and those had to be delivered. And some of that stuff didn't come in at the schedule you want. All of these things was just to trying to get to the opening, and it's all invisible, from that day forward. It's a bummer that we did all that work for 3 days. I'm really glad that we had it, and we've learned something. I'm like, maybe if we ever do anything like this ever again, together, I will take your advice to me 2 years ago, 3 years ago, Rebekah, and I will do it for longer than 3 days. I promise you. But thank you for coming alongside of us to do it. But let's shift gears a bit to the outlook because we always like to talk about the future, obviously, on this podcast. When you're thinking about the work you've done to date, what you see, maybe from your vantage point of what stores are looking to build for the coming year or two, what are those future trends that you're seeing in physical retail spaces and especially in that DNVB segment of the market that is looking for physical retails maybe a chance to step on the gas for growth?

Rebekah: [00:43:35] Yeah. So I'll start. I mean, I'll say the DNVB is the brands that are moving into physical retail in a real way, are really looking at a couple of trends that we're noticing are smaller spaces. This is not, I'm not talking about like Alo Yoga or Nike or anything like that. I'm talking about like The Little Words Project of the world. Right? So small spaces and small means, anywhere from, like, 700 to a 1000 square feet, maybe a little bit more, maybe a little bit less, give or take. You know, they don't need giant spaces, but they do always have an experience for the customer. So to kind of go down the Little Words rabbit hole, you have a whole beading table where you do I mean, obviously, their whole thing is personalization. It's like what are your words? So, you know, there's that. But then there's also like the olfactories. Right? And it's kind of happening all over the place where there is some sort of personalized connection to the product for the customer. And I think that lends itself, and just to kind of talk about macro trends that we're seeing and this is like I'm not saying anything that, you know, anybody doesn't know. Apparel has pulled back on physical retail. Fashion in general, accessories have pulled back just because of consumer behavior that we're seeing. They're not buying as many clothes, etcetera. I would say ones that are in very specific niche markets maybe are moving forward, but that's an exception. But anything in beauty, anything in wellness, anything in highly personalized. Right? So, like, even though Little Words bracelets, or accessories, they're highly personalized. So I think that is, you know, [00:45:18] brands are looking for ways to really connect with a customer and give them something that they can't get somewhere else, like with a competitor. [00:45:27] Because really nothing is new under the sun. So that's just kind of like on the macro. Smaller stores, still continuing to see a lot of interest in what, I guess, used to be considered tertiary markets like Nashville. And I mean, Austin's like a full blown type A market now, but once upon a time, it was not. Not the New York, LA. I mean, certainly people will always build stores in New York and LA. That will always happen. There's just such a volume that comes through that it is for a lot of brands, it makes a lot of sense. But I think these kind of tertiary markets are really continuing to have a moment. And that's been happening since we came out of the pandemic, by the way. And at first, it had to do with the regulatory environment. Which states were allowing freedom of movement or whatever, and I'm not gonna comment on any of that. But I think, you know, that's where they had advantage. And now it's actually just kind of turned into like customers have migrated there. That is where there is interest. There is actually more of an awareness now that they have gone into these markets, whereas before it was only the coast that knew about some of these digitally native brands. Like, my sister lives in the Midwest, and she used to be like, "I've never heard of any of these brands that you're working with." Now she knows who they are without me telling her. So I think that there's something to be said there. So those are just like a couple of thinking about the future, personalized, smaller, you don't need a giant mega space to accomplish that, and that's kind of connecting with customers is what it's all about.

Libby: [00:47:07] I'm gonna add one more if I can, which is...

Phillip: [00:47:10] Please.

Libby: [00:47:10] The interplay between wholesale and retail. It's not actually an either/or, and we're seeing a lot of brands use both of those things for different reasons. And when done well, it can be this beautiful sort of cycle, it's not self-fulfilling prophecy, but each one builds on the other. It doesn't have to be mutually exclusive, and it doesn't have to cannibalize each other either.

Phillip: [00:47:44] I'm just thinking about my own neighborhood here, and West Palm Beach and what's happened here in West Palm Beach in the last three and a half years. And this I can speak with authority, but I'm sitting right now in the middle of a triangulation of three of the greatest retail development projects that are happening on the East Coast. And they are all large scale, massive outdoor mall type projects with varying styles, I would say, and various consumers that they're going after. There's the Nora project, which is happening in downtown West Palm Beach, which will have a Van Leeuwen, and it's going to have a Mejori and some other DTC type stores. Out here, out west, which just should not, it's like blowing my mind it's even happening is a town called Royal Palm Beach. Within the next year and a half, we will have a vast outdoor complex that will have Anthropology and Free People and Lululemon and it is happening and it's happening at such a scale right now. That is just one market in I would say a top 3 state for migration at the moment too. It's happening everywhere. So brands also, I think, have this challenge of your customer might also be in all of these other 2nd, 3rd tier cities now, post-pandemic where maybe there is an opportunity to scale into those markets, rather than New York or LA first. Give us some strategy on what advice you would give to a brand that's opening physical retail, and how maybe your team would lead them through the calculus of such a decision or whose role in the organization it should be to be weighing out which market to enter into.

Libby: [00:49:48] Well, I mean, Phillip, what you just shared is something that we've known for a while, which is that retail's alive. We heard for so many years before the pandemic, "Retail's dead, retail's dying." It is not. It is evolving. And right now, as is evidenced by what you see happening around you in West Palm, it is hot. Retail is hot. And so one of the things, truisms, Rebekah, I don't know what you'd call it, that we like to say to tell customers kind of initially when they're starting out, where on earth should I put my first store? Store number 1, always in your own backyard. Wherever your company is based in this land of remote work, wherever the core of your people is, where your company is based, first store you're opening, put in your own backyard. You have to for a number of reasons that are beyond I think, what we have time to get into here. And then from there, we talked a lot on the show about you have data. You have rich, rich data from your eCommerce sales. So you have to start by going where your customers are. So [00:51:11] typically, we say, the first 7 to 10 stores go where your customers are. Then after that, after you've established that foundation and that base, then go where the people are who you want to be your customers. [00:51:30] And, so you're a little bit building, build the foundation, and then kind of hit the aspirational after that. And that's just like very, very broad general retail strategy for DTC brands.

Rebekah: [00:51:47] I think that's right. And I think there's one more additional consideration. So it's one, go where you are. Two, go where your customers are. I think three, go where your customers should be. But I think in two and three, consider operational efficiencies. And what I mean by that is if you are in I'll just use New York because we're the center of the universe. If you are in New York, I'm in New York in case people don't know, if you're in New York, okay, you build your first store in New York. So you can go there. You can see. You can learn. And then, you know, your number two market is Chicago. Your number three market is New Jersey. Well, let's do the math. Which one's closer? Okay. And great. Go build on those efficiencies. Because from an operational standpoint, having two stores in closer proximity, you actually have a lot to gain there. You could go and visit. I mean, Short Hills is close enough that you could visit. You could do a day trip from the city. So I think there's that fourth piece kind of needs to inform two and three, but number one is always, always, always go where you are. Build where you are. And if that's EBF Kansas, build in Kansas.

Phillip: [00:52:59] Or yeah. Or if you're Magnolia, then it's Waco, Texas. I mean, yeah. I get it.

Rebekah: [00:53:03] Right.

Phillip: [00:53:04] Makes so much sense.

Rebekah: [00:53:05] Chip and Joanna Gaines would not have opened in LA first.

Brian: [00:53:09] Right.

Rebekah: [00:53:09] That doesn't make any sense. Now they probably do or will or I don't actually know. I like them.

Libby: [00:53:16] That is actually also one of the truisms. Don't open your first 10 stores in LA. No shame to LA. We love LA, but if it's your first 10 stores, unless, and the big unless being, unless LA is your backyard. We're building a store right now for a client who is based in LA. And so, yeah, their first store is in LA because building in your own backyard and having that proximity and what you can learn from having it right there, that trumps the truism of don't put your first 10 stores out.

Phillip: [00:53:48] Lady, I was in Venice on spring break, and I was on Abbot Kinney, and I just pictured my store there. That's where it should be. Does that sound familiar to you?

Rebekah: [00:54:01] Oh, yeah. Yeah. They'll take a picture. We'll send text messages from founders, and we're like, "Walk away. Do not dial that broker. Turn around. Stop." The FOMO is real. I get it. I get it. I do. But if you want your store to be successful, build it right.

Phillip: [00:54:23] Yeah. I love that. And this has been such an amazing time. I can't believe the hour is already up. It's been great having you all on. Where can they reach out? Where can folks reach out to hear more from you and your sage wisdom, and maybe a little bit of the Outlaw spirit, over there at Rekon?

Rebekah: [00:54:43] {laughter} I love it. Our sage wisdom, you can find at rekonretail.com. You can also I am on Twitter, so you can find me on Twitter @rdkondrat. I tweet about retail things sometimes, and sometimes I go dark for months, and sometimes I start tweeting again. So just know that about me.

Libby: [00:55:04] We are on Instagram. We're on Instagram.

Rebekah: [00:55:08] RekonRetail on Instagram.

Libby: [00:55:08] We're on LinkedIn. Yeah. Yeah. We're working on our content game, Future Commerce team.

Rebekah: [00:55:16] {laughter} Yeah.

Phillip: [00:55:17] Yeah. I know.

Libby: [00:55:18] We'll take some pointers from you.

Phillip: [00:55:20] I love the thought leadership. We'll also link to it in the show notes, here, obviously, wherever, you can find show notes for podcasts these days. Rebekah and Libby, thank you so much for partnering with us, and more to come, I'm sure, between Future Commerce and Rekon. But congrats on all the things you've done so far, and can't wait to see what you guys do here in 2024.

Rebekah: [00:55:39] Amazing. Thank you.

Libby: [00:55:40] Thanks, guys.

Phillip: [00:55:41] Thank you. And thank you for listening to Future Commerce. You find more episodes of this podcast and all Future Commerce properties at FutureCommerce.com. Of course, you can get ad free versions of these episodes and more by joining FutureCommerce Plus. You can get that at FutureCommerce.com/Plus, and you'll need it to save a little bit of money with your exclusive discount on the Muses Journal. If you weren't at Art Basel, you can still pick up one of the scant few copies that are left before our next reprint. If you want it before the snow thaws, get it for 15% off with your Future Commerce Plus membership. That's FutureCommerce.com/Plus. Thank you for listening to this episode of Future Commerce.

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