As fast-growing apparel chain Kit and Ace scouts locations to sell its machine-washable cashmere, co-founder J.J. Wilson is not just trying to calculate where his customers are.
He’s also thinking about their ideal shopping habitat.
Wilson wonders, “Am I going to be able to find that right local artist that’s going to be able to contribute to the shop and the way that I want the shop to look?”
That’s because, despite its global ambitions, Kit and Ace doesn’t want any of its stores to look alike. In fact, Wilson is aiming to build 30 percent of each outpost from the local creative class, a measure he hopes will give the stores an authentic vibe.
In the District, that has led Kit and Ace to Shaw, a neighborhood that has long been something of a retail desert. At the eastern edge of the flourishing U Street corridor and just south of Howard University’s bustling campus, investment is flowing in. A cluster of mixed-use buildings is going up — providing 45,000 square feet of retail space for 30 tenants.
The Northwest Washington project is shaping up to be a microcosm of some of the key trends embraced by retailers and developers across the country who are eager to satisfy the preferences and spending patterns of millennials.
You can see it in the mix of stores that developer JBG has attracted, including Kit and Ace, a player in the booming “athleisure” trend; and Warby Parker, a leader in the wave of innovative online-centric retailers that is boutique in spirit and stresses price transparency.
And you can see it in the heavy emphasis on “place-making,” or trying to create a distinctive, localized atmosphere that differs sharply from cookie-cutter regional malls.
“Our consumer is a consumer that’s really looking for that experiential retail,” Wilson said.
This idea of turning shopping into a distinctive experience instead of a ho-hum errand is how many retailers have decided that brick-and-mortar shopping will remain relevant even as e-commerce offers vast choice and convenience. The Apple Store has become the industry’s paragon in this exercise because it has proved that it works: Its sleek, minimalist stores allow shoppers to touch and try its products in a hip setting, and that has helped Apple pull down the highest sales per square foot in the industry.
In Shaw, experiential retail means giving the stores a look and feel that reflects the liveliness of the neighborhood — while perhaps skirting its still-rough edges.
JBG scooped up twin properties in 2011 that will be home for these new retailers: the Shay at Eighth Street and Florida Avenue NW and Atlantic Plumbing at Eighth and V streets NW. After arriving early to the now-
booming 14th Street corridor, the developer aimed to be similarly positioned in Shaw as it saw some of the energy of 14th Street moving east.
Some of its effort to create experiential retail came in the form of details, such as 30-foot-wide sidewalks, which it hopes will give the area an airy, plaza-like feel. JBG needed to pull District officials on board for that. It also successfully pushed for the strings of catenary lights that would give the complex an appealing twinkle but that are rarely allowed in the District. And each tenant is encouraged to make some artsy modification to its storefront, perhaps by putting a painted bicycle out front.
JBG now has an entire “place-making department,” whose mission is to make its developments feel like colorful neighborhood hangouts. That’s driven, in part, by how the developer has noticed millennials want to shop.
“They want to have a very unique, authentic experience that they have somehow contributed to creating and finding the salt of the neighborhood,” said Kai Reynolds, a partner at JBG.
Kit and Ace is just one chain-store tenant that is trying to create a local feel. Aesop, an upscale Australian skin-care and hair product retailer, says the design of its store in the Shay will incorporate some “inspiration taken from the music scene” anchored by the nearby 9:30 Club.
Setting up shop in this developing neighborhood “is not a cost decision for us,” says Stuart Millar, Aesop’s general manager. Instead, Millar said, the proximity to the arts community and independent businesses fit Aesop’s “slightly alternative” brand better than any other D.C. neighborhood.
This is precisely the kind of retailer strategy that JBG was targeting when it split its space into dozens of small storefronts and artist studios instead of a handful of larger ones. These tiny spaces (as small as 513 square feet), it figured, would appeal to stores that aren’t necessarily mom-and-pop retailers but have built their brand on a sense of independence and a carefully curated collection of goods.
“The small-tenant thing made it harder for us, more complicated,” said Robin Mosle, an executive vice president at JBG. “It certainly needs more staff. But we felt that it was responsive to a market that would make us unique, and it was clearly consistent with the vision that we had.”
Analysts say the retailers that JBG has signed — which include upscale apparel shops Steven Alan, Benrus and Read Wall — are indeed more likely to find their customer in this type of urban, mixed-use development than in other shopping formats.
“They don’t do very well in suburban malls, because frankly they just get wiped out in the noise and the population is too diffuse,” said David Marcotte, senior vice president of retail insights at consultancy Kantar Retail.
JBG’s retail ecosystem in Shaw is completed by a slate of restaurants that it promises will be more “egalitarian” than the pricey eateries in the nearby 14th Street corridor: a ramen house from the team behind Daikaya; Declaration, an Italian spot from the group that created Lincoln and Teddy & the Bully Bar; and Freehand, a French-Asian bistro concept by Virginia chef Tim Ma.
Ma said he searched from Georgetown to Mount Vernon Square before settling on Shaw, a decision that was heavily influenced by the other tenants.
“These are the guys that speak to the same crowd that I speak to,” Ma said. “I’m not that fine-dining place that you have to wear a suit to.”
The opening of the Shay and Atlantic Plumbing in November will mark the D.C. area brick-and-mortar debut of one of the buzziest brands in retail: Warby Parker, which disrupted the eyeglass industry with its Web site that offered a stylish, cheaper alternative to designer frames. The brand has been adding brick-and-mortar locations as it finds that even as shoppers spend more and more time on their gadgets, a huge swath still wants to touch and try on products before buying them.
The arrival of this upstart in the Shaw shopping district is an example of how much the industry’s thinking has changed about how millennials want to shop. While online shopping once seemed like the death knell for brick-and-mortar retailing, many brands are finding that customers want to connect in both the physical and digital channels.