If people aren’t buying many things in stores, what is going to fill the shops?
McLean, of Edens, filled Union Market with concepts — a baker, a cheese shop, oyster shuckers — that harken back to the days before grocery stores, when stocking your pantry required going to several specialty shops. Located at Fifth Street and Neal Place NE in the middle of a patchy wholesale district where few shoppers have tread for a generation, getting there is part of the adventure.
McLean thinks people are willing to pay extra for the story they can tell about exploring an industrial district of Northeast Washington in search of a foodie paradise. In the three months it’s been open, she has expanded Union Market from three to five days a week, with attractions such as handmade $5 sodas at Buffalo & Bergen, founded by mixtress Gina Chersevani.
A five-dollar soda?! McLean said the value is in the experience of drinking it at the counter. “The difference is between a great, great soda sitting on the coach by yourself at home and sitting on the stool at the counter and sharing that experience,” she said. “There is no other place in D.C. where you can have that adventure.”
Marc Ratner is also trying to find concepts that reinvent experiences long considered necessary but not enjoyable. His company, Bethesda-basedStreetsense, has chosen locations and designed hundreds of stores for chains such as Starbucks, Chipotle, Express and Victoria’s Secret, many of which scaled back or shelved plans for expansion after the 2008 recession arrived.
Now Ratner and his partners are intrigued by concepts like Earnest Sewn in New York, where customers can choose the denim, studs, buttons, pockets and cut of their jeans and have them made to order. No more slogging through the racks and then to the tailor to get a pair to fit just right. Though for a price, of course — in this case, sometimes as high as $1,000.
Then there is Floyd’s 99 Barbershop, which bills itself online as “the original rock & roll barbershop,” has its own radio station and is decorated like a concert venue. Floyd’s is to Hair Cuttery what Build-a-Bear Workshops were to KB Toys: the same offering, but served up with a memorable experience. It has locations in Baltimore, Ellicott City and Annapolis and is expanding.
Already, the Washington area has gyms that become nightclubs after hours. And in October, the first two local blow-dry parlors from California-based Drybar opened, in Bethesda and Georgetown, and started booking $40 blowouts with mimosas on the side. Co-founder Michael Landautold a Washington Post Capital Business reporter that ladies race in for morning appointments every day rather than doing their hair at home. “That 7 o’clock appointment has become a coveted spot,” he said.
Not every major retailer will suffer as a result of the experience economy, and some have already evolved.
Some chains, including Best Buy, are slimming the size of their brick-and-mortar stores and trying to grow online. Wal-Mart, Staples and Office Depot have shrunk some store designs as well.
Some retailers will focus on the most interactive, service-oriented part of their businesses. Dandelion Patch, a chain of local stationery stores, now draws more than half of its revenue from its sessions in which customers design their own invitations, thank-you notes and event programs, according to founder Heidi Kallett. Gift sales from the shelves are flat. “What we are really doing is helping people build a personal brand,” Kallett said. That’s becoming a strong part of Dandelion’s brand as well.
Pine thinks more retailers need to find ways to charge for the experiences they provide. REI, for instance, now makes nonmembers pay to climb the rock walls it has at some of its locations. Others are launching mobile and tablet apps to locate customers and offer targeted deals or product suggestions while they are in stores.
Ultimately, if an experience is what consumers are coming for, Pine argues, the most successful concepts will be the ones they are willing to pay for. Amid all the new bells and whistles, a great product next to a so-so experience isn’t likely to stand out, he said.
Or survive.
“Any product that you don’t need to experience yourself is in danger,” he said.
oconnellj@washpost.com
Jonathan O’Connell covers development and commercial real estate in Washington for The Washington Post’s Capital Business. Follow him on Twitter: @oconnellpostbiz.
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