Experience Based Retail Continues to Shine

When we outlined our asset-level retail strategy in the 2016 white paper, The Age of Experience Based Retail, we explained why we favored assets that cater to tenants with a focus on experiences. This strategy was based both on the widely observed trend towards e-commerce spending, and on an examination and forecast of our internally developed “experience-to-stuff ratio.” We calculated the ratio as 1.3x at the time, meaning for every $1.00 spent on stuff, $1.30 was spent on experiences. 

 

Today, our analysis of Bureau of Labor Statistics data suggests that around $1.50 is spent on experiences for every $1.00 spent on stuff. We believe this has contributed to stronger demand in centers with experiential elements such as restaurants, showrooms, event space, and activities. Stores that are primarily goods based have faced headwinds from both the trend towards spending on experiences rather than stuff, and the trend towards buying that stuff online rather than in a store. In addition to targeting centers with experience focused tenants, we believe many goods-based retailers are increasingly using their stores as showrooms, to help boost their online sales. The result is less need for inventory, and less need for a large format space. 

 

Our analysis of lease signings across more than 150 retailers suggests this trend is underway, with the median store footprint decreasing by 1.2% between 2017 and 2018, and we believe it will continue shrinking in the years to come. We therefore continue to focus on centers with experienced based offerings as well as centers with smaller spaces, or with layouts that could be subdivided into smaller spaces in the future.

 

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CS Hudson and IRG Launch R|Evolution to Early Success; Announce New Deal with Simon Property Group for Rapid Expansion of Innovative Rotating Pop Up Model

Experiential marketing leaders CS Hudson and  International Retail Management and Consulting Group (IRG ), unveiled their latest collaboration dubbed – R|Evolution – last Thursday at the Tanger Outlets in Riverhead, NY. An immersive pop-up shop that provides digitally native and emerging brands the opportunity to participate in a pop-up brick-and-mortar experience, R|Evolution gives consumers an exciting rotating experience every 90-days – aiming to “flip retail on its head” with an innovative model for the future. On the heels of this launch, the two partners also announced a new deal with Simon Property Group to expand to three new locations before the end of the year.

 

The sneak-peek opening event was hosted on Thursday, Sept. 12 at the Tanger Outlet Center in Long Island, NY. The event served to launch the new concept, which offers consumers unique opportunities to interact with digitally native, direct-to-consumer and licensed brands in a physical retail environment. The first brands to participate include: TatBrow, Tangle Angel, TRU Niagen, Swiss Relief, Fingernails2go, MYTAGALONGS, Because I Am A Girl, Instant Effects, Ornaments for Opportunity and CB-Dadi’ Oil. For eight of the brands, this is their worldwide launch into physical retail.

 

The unique 2,500-sq.ft. pop-up venue provides a shop-in-shop environment where up to a dozen high quality brands participate in 90-day stints supported by a fully inclusive operational pop-up shop model that is exciting for both consumers and retailers alike.

 

R|Evolution provides a complete, turn-key solution—from installing the entire shop, staging the merchandise, tracking results, and providing brand ambassadors able to educate the consumer, create excitement and sell product—all at a fraction of the traditional cost.

 

By the end of this year, CS Hudson and IRG are slated to open three additional pop-ups branded “LaunchPad powered by R|Evolution” in partnership with Simon Properties – an S&P 100 company and global leader in shopping, dining, entertainment and mixed-use destinations with properties across North America, Europe and Asia. This expansion will bring the R|Evolution experience to consumers in the common areas of shopping malls in Fla., Penn. and Ill. The unprecedented early expansion signifies what the co-founders believe will be an impressive growth trajectory as the initiative scales up—providing even greater opportunities for online brands to engage with their consumers via physical retail.

 

R|Evolution has set out to revolutionize the pop-up experience category—giving shoppers access to the exciting brands and experiences they are looking for. This is just the beginning.

 

About CS Hudson: CS Hudson – a leader in experiential pop-ups, shop-in-shops and marketing activations specializing in turnkey services and purpose-built solutions nationwide. Innovative, resourceful, versatile and creative, CS Hudson’s experienced professionals are renowned throughout the industry for their expertise in developing, implementing and managing immersive experiential, capital refresh and facility projects within the retail, restaurant, healthcare and commercial sectors. Working throughout the U.S. with companies ranging from start-ups to Fortune 500s, CS Hudson provides a tailored approach to meet the needs of its clients, all with unique concepts, brands, budgets, challenges and goals. For more information, visit www.cs-hudson.com/experiential.


About International Retail Management and Consulting Group: International Retail Management and Consulting Group, (IRG) is a trusted leader in direct-to-consumer retail operations, pop-up locations and carts, kiosks for some of the world’s top brands—perfecting the art of specialty retail marketing with direct experience in the operation of more than 1,000 locations and automated retail locations throughout the United States, Canada, Australia and New Zealand. Headquartered in Las Vegas, IRG evolved from the largest owner-operated specialty retailer in the world, American Kiosk Management (AKM) which proudly served over 52 million guests, amassing more than $1.7 billion in sales for Proactiv®, the company’s most prominent client. Their customized specialty retail marketing includes testing, launching and operating multiple pop-ups, carts, and kiosks for leading companies, including Guthy-Renker, Blue Moon Hemp/Swiss Relief, One Two Cosmetics®, ABC Mouse, Revlon, Solar City, Vivint Solar, Great Foods, and Hess Toy Trucks to just name a few. For more information, visit
www.irg-retail.com.