As we prepare for Black Friday and Cyber Monday, I think a lot about the future of the physical retail landscape. As I walk around my neighbourhood in Bay Ridge, Brooklyn, I count every storefront whose products or services could be better delivered over the internet.
The count is unfortunately high. Pretty much anywhere you buy items that aren’t food, you could probably get them cheaper on the web, with a wider selection. Left and right, small retailers are closing their doors.
Storefront real estate’s saving grace? ATM Locations. The number of ATM and banking locations in NYC has exploded in recent years—but you have to believe that this growth can’t continue. What happens when we wind up going all digital with our in person transactions via our phones, keyfobs, or just using credit cards via Square—or when Simple is our bank of choice?
Have we reached “Peak ATM?”
And when we do, what happens to the real estate footprint that ATMs and bank locations take up?
More and more, the kinds of things that are succeeding in the retail world are experiential. Storefronts are transitioning from places you buy things, to places you do things.
While other fro-yo chains close, 16 Handles is growing—because it’s more fun and engaging. You create your own dessert versus paying for someone else to give you standard items. Cycling studios like SoulCycle are thriving and yoga centres are popping up left and right. In Bay Ridge, The Art Room is a store front fine arts school for kids and represents the tip of the iceberg in storefront education centres.
Perhaps the most widely known example that touches the tech community is General Assembly—almost 30,000 square feet. As GA creates code, places like 3rd Ward and TechShop are accessible member-based workshops for creators that work other mediums as well, like wood and metal. Story is a 2,000 square foot retail space with “a point of view” that is part store, part event, rotating on a regular basis to feature different themes.
Some etailers, like Bonobos and Warby Parker, use physical retail locations as displays and showrooms for otherwise online distribution.
As this trend moves forward, it will be interesting to see how online services connect people to their physical environments. Loosecubes, a network for desk space, wound up getting outpaced by the underlying availibility of coworking spaces themselves—when there’s one on seemingly every corner, you no longer have trouble finding availability. That doesn’t mean you won’t find other attempts at solving other aspects of the online/offline connection. I wouldn’t be surprised if Meetup.com starts thinking about community centres for hosting Meetups—the Knights of Columbus/VFW 2.0.
One thing that is undoubtedly true is that we all want to pull away from the computer once in a while—and empty storefronts will inspire innovation, as well as present an economic challenge for real estate owners. I’ll be excited to see the same spaces that were distrupted by internet distribution get reinvented by hybrid models and more engaging places for people to connect.
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