Dynamic retail experiences

Mariam Sobh 00:01 Welcome to changing places brought to you by Avison Young and changing places we explore our continuing and complex relationships with the built world around us. I'm your host, Mariam Sobh how many times have you walked down a major street in your city and town without taking notice of the stores around you? What is it that makes you want to step into a brick and mortar store outside of escaping the rain for a few minutes or using their air conditioning? So often the disconnect between how we are lured into a store versus the function of a space rarely line up with each other.

Dynamic retail experience is a fascinating concept which I want to explore on two fronts, what it means for businesses and how we as a society view it. Let's dig a little deeper into how it's been handled in three cities, Dublin, Toronto and Shenzhen. In 2019, Grafton Street Dublin's premier shopping district was number 13 on Cushman and Wakefield list of the most expensive retail rents in the world. However, the street was in need of a classic revamp when HECF Grafton part of the international property company Heinz asked the Dublin City Council to remove street traders in order to enact a new policy dedicated to redeveloping the street into a dynamic retail experience. The proposal was swiftly shot down. However, not all attempts to transform existing location into a dynamic retail experience is met with such ire Toronto's Air Jordan store was lauded for its experiential nature, underground kids only concourse and athletic training facility. Shenzen's Burberry store is billed as the brand's first luxury social retail store, which blends the real world and social media while providing shoppers with an immersive digital experience. Dynamic retail experiences can occur in many ways, which is what I'll discuss with my guests Jeff Doud of Jeff Doud & Associates and Stan Yoshihara, principal Managing Director, Western Region Asset Services at Avison Young. We’ll get their takes on dynamic retail experiences, how COVID has altered the future of dynamic retail experiences and what it looks like as online retail battles, the High Street for supremacy, eyeballs, and above all money will begin in Los Angeles’s Little Tokyo with Stan Yoshihara.

Stan Yoshihara 02:17 This micro market let's call that really micro market, which Little Tokyo is from first to third street, you know, north and south, and then east and west would be Alameda to Los Angeles. We're in Japanese village Plaza. And this was developed somewhere, I believe in the 70s by the human family. And it really took off and at that time, through the 80s, 90s, mostly Asians and Japanese.

And then today, as you look around, that would be almost a minority. It's a great melting pot of LA in terms of diversification here, the Japanese spirit and the Asian spirit is still here by the restaurants. But eventually there's going to be more, you know, different types of concepts, because the consumer’s changing. So, it has to change a little bit. I think it's, again, it's a lot of the businesses where they survive this community is that micro market that supports itself.

Interviewer 03:17 I'm wondering if Little Tokyo is the dynamic retail experience for someone who's coming here,

Stan Yoshihara 03:25 People will come from different areas to come here. It's not just the local, because you're always going to have no matter how great the internet gets online ordering and things. There's a social aspect, and especially to go into a restaurant or cafes, coffee, right? It's really interactive, that you go there to meet people to talk to socialize, meet friends, who you haven't seen for a while, and to experience that's why experiential is such a word in retail. Right? It's, you got to have that that'll never go away totally. In fact, I still think it'll be fairly dominant that once in a while you just got to get out of the house and go,

Mariam Sobh 04:06 Stan Yoshihara, Welcome to changing places. Stan, how has little Tokyo's preservation of history led to it becoming a prime example of a natural dynamic retail experience?

Stan Yoshihara 04:17 Well, Little Tokyo has always kept its culture for decades, because it's based on historical and a lot of the preservation of the buildings, where a lot of the retail is, are still historic historical sites. And, and so I think that really helped that establish itself as a region that first started, I first started going there probably early 80s. And it was mainly at that time, a lot of Japanese would go there. And then it transitioned into more Asians there in the 90s and 2000s. And now I would say it's 100% mainstream, so it really helped that the actual hard assets were historical and all of a Japanese nature and First Street, Second Street, I would say is 90%.still Japanese names in the restaurants.

Mariam Sobh 05:10 But with all the experiences in the real estate sector, how important do you think it is for brands and businesses to embrace a fully dynamic retail environment at their locations?

Stan Yoshihara 05:19 I think branding is in marketing our key to who and what you are, and what you represent. And that's why the majority again, if you go to Little Tokyo, you'll find that the national brands, especially on First Street, Second Street, are really a minority. I'm trying to think of any national brand there. And I just can't think of any most star from the roots up local. And I think that's how they really established themselves. And they're here today. And ironically, even through COVID, only a few of the restaurants have closed. And it's been extremely difficult. But that community tends to rally around itself very, very well.

Mariam Sobh 06:00 Should brands focus on a big destination store, for example, a flagship store on Fifth Avenue or Grafton Street, or should all of their stores follow the same dynamic plan?

Stan Yoshihara 06:11 the flagship starts in destination, what you look for in retail is destination. It's where you're well known, but I think the greater thing that you would look for first is velocity. So, if you have destination and velocity, so a name that people know, then you're going to be a very sustainable concept.

Mariam Sobh 06:29 When it comes to the quick service retail, the QSR. How are the coffee shops that you've invested in handling this in order to get customers in or have an enhanced experience?

Stan Yoshihara 06:38 You know, those you know, are in LA proper cafe, they'll say, pretty much hospitality is number one, and we made our online ordering and our takeout we always had it. But with COVID and people not being allowed to sit right we look for patios, the patios have really saved a lot of the QSR from restaurants to in terms of they made it viable to actually come to a restaurant and sit outside.

Mariam Sobh 07:06 Well, if you look forward the next five years, do you think things will change to the point? For example, we'll see a coffee shop that's interactive, maybe there's some holograms in there and other worldly experience in that realm. Is that going to be the norm? Or do you think that'll be the exception?

Stan Yoshihara 07:22 I think human beings continue to evolve. And one of the things that we all like, and why the internet will never, to me, I don't like using never, that I think it will ever have 100% use, or even maybe 80%. People like the social interactions; so, we like to be around people. When you talk specifically about coffee, we built the business around that social interaction where people like to come and socialize with their friends or their business colleagues. I think that will come back. Because we're human beings and we strive; nobody wants to be 100%, you know, in a house or locked up in the office, we really want to get out. It feels good, right? It's very comforting.

Mariam Sohb 08:07 So, Stan, what parts of the dynamic retail experience do you think will not come back or aren't coming back at all?

Stan Yoshihara 08:13 I think the outside environment more the urban type, patio dining is here to stay. So, I don't think there'll be as greater demand overall speaking on sit down dining that were that demand was really high across the board. It'll still probably be high at the higher end restaurants, right? But certainly, at fast casual, especially in areas where you have great weather like California and Florida and things like that. I believe that that will be much more prevalent than indoor dining.

Mariam Sobh 08:48 Well, thank you so much, Stan. After this break, we're going to speak to Jeff Doud, the mastermind behind one of the true pinnacles of the dynamic retail experience. AT&T futuristic store at one Powell Street in San Francisco, will speak to Jeff after this.

Mariam Sobh 09:08 Before we head to San Francisco changing places brought to you by Avison Young continues to explore and question our complex relationship with the built world around us. Does the thought of training in a Nike store with their gear and trainers excite you? Do you want to trip to Burberry to be just like visiting a hotel lobby to gossip with your friends? Or do you never want to set foot in a retail store again, no matter what. Well stay tuned for the next portion of changing places brought to you by Avison Young I’m Mariam Sobh. So, before we speak to Jeff, let's head to the AT&T store at one Powell Street in San Francisco.

Interviewee #1 09:39 Hi, this is Emily, when I went in the store itself I honestly was completely blown away. I had no idea from talking with people. How elaborate and honestly just how elaborate the internal setup and experience was. There was this big panoramic, screen along the top, super high ceiling. In one area, there were movie like theater seats setup with a screen in front. There was another area that had a couch in this kind of setup like a living room. They also had tray of Wonder Woman themed cookies, which it didn't look like maybe it looked like one or two have been taken. And they had Wonder woman bags. And upstairs, there was this elaborate friend setup that was for the TV show Friends that had like, the complete set of that living room and kitchen with the door all set up. So you can kind of be in the space, which was actually really cool. Although one thing I noticed about the upstairs areas, I didn't see one other person up there. I think my overall takeaway from the experience was that you know, most of the people I talked to said that they were there just to take care of business.

Mariam Sobh 11:01 Jeff Doud, welcome to changing places. Jeff, I'm interested to learn more about your work with AT&T at their location on Powell Street in San Francisco, since it's the pinnacle of a dynamic real estate experience. What was the edict from AT&T when it came to turning the historic one power building into a model in dynamic real estate experience?

Jeff Doud 11:22 So that's a really, really complicated question. And it took a long time to get to an answer, because we started out with 1500 retail stores that had a much different purpose than anything that developed after that, particularly with the Michigan Avenue flagship store, which was the first AT&T theme park that really emerged out of this whole process.

Interviewee #2 11:41 It's really nice to it reminds me Time Square actually, the way they have the digital presentation across the top.

Jeff Doud 11:48 We presented a number of different concepts; but this was a different and unique opportunity. And the reason is that the location at 1 Powell is right at the turntable on Market Street, and there's 100,000 people that pass by there every day. The idea was to try to draw people in that might not otherwise be there. So, this is related to some other questions, you're going to ask me, I'm sure! To try to get people interested in a company at all, it's really not, it's not like a Disney brand. It's not something you go to seek out unless probably you've got an issue, you've got a data plan problem, probably you need a new device, probably you've got something broken. I mean, a lot of people come in for all of those reasons has nothing to do with creating a digital retail experience.

Mariam Sobh 12:31 Kind of touching on that is spending millions of dollars a way that you can lure people into a space, they might only go if they needed to go for a new phone or to fix something…

Jeff Doud 12:43 Well, that of course figures in pretty prominently because we know from the statistics at Michigan Avenue in Chicago, that fully 60% of people that walk in the door, already have a precondition idea of what they want to get out of that experience. And the theme park notion, is in reality an extension of how do we extend the brand to people that aren't going to be there to embrace our brand but are going to be there to embrace what we're offering them? Which we were hoping is something much more interesting. The measure that we've been using, and of course, you've talked about this probably a zillion times, or the Net Promoter Score is a really important measure of how people relate to your brand, and if you can score eight or higher, you're winning. If you score eight or lower on a one to 10 basis, you're a failure; maybe Disneyland I might recommend because I had such a great time but there's nothing about the brand that really draws me to the idea that I need to respond to a survey in any way that's possibly favorable or unfavorable to the brand as a whole. That's the kind of challenge that we're facing today.

Mariam Sobh 13:42 When you mentioned some of these ways of designing the space, I guess what is the solution then to getting people into retail space that may never interact with it otherwise, for like basic necessities? How do you manage to pique their interest and keep them coming back?

Jeff Doud 13:56 Well, we had to come up with a concept that was really going to resonate with the local community that was key. So one of the things we did was we sent out three of our people with cameras and other kinds of equipment to gather information and imagery from the area so we could better understand what's happening in the nooks and crannies of San Francisco, not the tourist centers, not the Transamerica building, but the back alleys, the graffitied walls, the secret entrances, the way people get around town is very key to really understanding who lives there and how they interact with their city. So, we were connected on that premise; the concept that we came up with it seemed to resonate strongest with the client was the marriage of technology and art is if there's a lot of really creative people in the San Francisco area, and we wanted to reflect that and whatever content that was going to be brought to the digital screens inside the store. This is the basis of how we can really sell this idea to the public is to really draw attention to the idea that what we might do with this presentation could be very technologically related, but also extremely artistic. And if we could hit the right notes with that, I think that we could maybe get all of those 100,000 people at the one Powell turntable to take a look at the 50-foot-wide screen that we put that was clearly visible from where they were standing and try to create something more interesting with it. So, we divided that into three categories. And those categories are a connected life story. And then the entertainment story, which is really all about DirecTV and Warner media and things that you don't really associate with AT&T.

Interviewee #3 15:25 I just want to see the friends set, so it's like the apartment building where Monica and Rachel live most of the time. So, it's just like the door, you know, the purple door with a yellow frame, and you have the couch, and you have the dining area. It's just a cute little thing. And they have the dog from Joey's and Chandler’s as well.

Jeff Doud 15:45 It's also endless. What we're able to do with it was that what do you do with these spaces, if you want to, like reuse them for public events, and so forth, is what we were able to tap into what we built with this thing to bring ludicrous on site to give a concert, his music was then delivered to the screen and the screen was delivering content. It was related ludicrous. And all of it was like a kind of a fantastic live event, which really upped the ante for what we could do with it. And I think really paid off on the idea that I actually got all the top executives at AT&T very excited, because they suddenly realize that maybe they had something more than just a place where you're going to go in and buy a cell phone.

Mariam Sobh 16:21 That's really interesting. And it seems like it's a very immersive experience when you design it that way.

Jeff Doud 16:25 Yeah, absolutely. Because it was two full floors. Getting somebody to come in and look at the 50-foot-wide screen is one thing but getting them to go upstairs and understand what smart cities are about or connected bicycles, or all the rest of those stories are upstairs and getting people to go upstairs was a big draw. And we had to use digital devices and in lead ins to bring people up there to try to extend that space to try and turn it into more of a theme park than it was really existed on the ground floor.

Interviewee #4 16:54 It's really interactive is also it’s a moderate experience; but yet there's a lot of human interaction.

Mariam Sobh 17:02 It sounds like you were pretty much on the cutting edge pre COVID. Because now a lot of people are more hesitant to go indoors or to be in enclosed spaces, do you think that that's going to change the way the dynamic retail experience is or you've sort of set the tone with some of the technological advancements,

Jeff Doud 17:18 I think it has to change, we have experimented with a lot of iPad technologies and AR and some other ways of creating easter eggs around the store and getting people more involved in their experience there. Now if you can make that really interesting, if you can make AT&T as cool as Disneyland, it's a no brainer. But that's the challenge, right to get there as is a hard leap. And the entertainment leap was one that they really embraced in order to try to get there. But it doesn't feel like it's going to stick when it comes to how people are relating to brands as simple as AT&T you know, let's go and bring those people in and then try to surprise them and delight them with things they didn't expect.

Interviewee #5 17:56 I mean, I think build an American Doll have pretty good concept of this already. So, I actually think the interaction element is very useful and very good for the customers experience. And yeah, I think more of that would be beneficial for …like also a bank, like my bank actually used to have like in the floor like this little …What was it? it looks like a small aquarium, when you walk over like small fishes disappeared. And that just made me stay longer in the bank is to play around with that. I think it gives you a great experience inside store and you feel more comfortable inside the store actually.

Mariam Sobh 18:30 I like that you keep bringing up Disney because I'm a huge Disney geek. And, and I think this the way that those spaces are designed, I mean, if you think of Disneyland or even the Nike store, it's an example of a dynamic retail experience where you know exactly where you are, the story is very clear from the minute you enter that space is that something more brands from let's say a local bookstore to a mega coffee chain should focus their attention on if they want to achieve maximum impact with customers going forward.

Jeff Doud 18:57 If you're a Starbucks, I think people have very limited expectations about what their experience is going to be when they walk in that store. And you know, that's doing pretty well for Starbucks. But if you step it up to Nike, you've got this whole customization thing that's like people really revere these shoes.

Interviewee #7 19:13 And then we weren't really there to actually do any shopping. It was mostly to like, play with the sack. Turns out they had like other interactive experiences like from Space Jam, Wonder Woman and other things you could play with. We hardly just saw the actual shopping area of the store. There is more like the experience of like other things they offer basically,

Mariam Sobh 19:36 Are the other possibilities endless when it comes to dynamic retail when we have like now with digital and virtual spaces? Does it seem like we're just at the tip of the iceberg with creating?

Jeff Doud 19:46 Well, I think the only answer as a designer to a question like that is “yeah, absolutely, it is endless”. So, understanding the brand is everything. You just have to you have to go after what we think is going to connect with those customers and get it out there and try things we have to try, try try and see if we can come up with new and interesting ways to do it.

Mariam Sobh 20:04 As a consumer myself, I think if I went to a Tempur Pedic store, if you had some little Easter eggs hidden around the store or things that I had to look for, I'll probably come in, why not?

Jeff Doub 20:14 It's a battle. And I have had so many discussions with the executives at AT&T about that very idea. Like, how can we just give them an iPad when they walk in the door and see what happened, because we're going to have a lot of surprises there. But you know, they're not ready to spend the kinds of dollars that really requires to experiment wide open like that without having to work harder, which is something I've heard from executives over and over, “hey, this is a great concept; we love that you're bringing in social media, we love that you're allowing our customers to respond live in the store to things that are happening, it's all great! but can you make it work harder?” And what that means is, can you sell more product. So, I didn't come in to get a discount, I might want one; but I didn't come in to be bludgeoned with the advertising side, I came in to fix my phone. I think that over the next five years, I think advertising has already changed dramatically in 10 years. And in the next five, wow, I don't know what's happening next. But it's very, very difficult to convince any of my advertising clients to engage in television commercial making right now.

Interviewee #8 21:19 I would say for a bank, I don't think it really worked out well, just because people are needed to get in and out. But for like a bookstore or a library, that would be a little bit more advantageous, right? Because people could hang out and be in that type of space, and where they could look at multiple books or whatnot. And for a younger youth, that would be something that I wouldn't mind seeing implemented in such places like that.

Interviewee #9 21:42 You can kind of come in and sit around and talk to you about like, “Oh, well, I just want to get my money, I can make sure all my stuff together” but I know, if they kind of merged it with things that you're actually needing to do. Like, I want to talk to my friend the financial advisor, for instance, at the bank, or if it was something that was like uniquely targeted to whatever retail experience that company has, then I think it would be worthwhile. And I think people will be open to it.

Mariam Sobh 22:08 I'm just curious for myself here that social media has played a huge role in the way people experience things. So, for example, when you said mentioning the amusement parks sort of experience when they go to these stores, is it also because it's a way where people can take pictures of themselves in that location and share it with others and they want they're looking for that kind of immersive experience.

Jeff Doud 22:27 Yeah, I think social media has been very positive in a number of ways. One is that people are taking peer reviews seriously. And they might want to consider going to a different company. If everybody thinks that the brand A is really sucking, and they want to try something else. That's one way of the ability to understand how people think about your products is real time. A great example was when Amazon decided to release their own cell phone called the Fire Phone, that fire phone went they shipped 250,000 units to AT&T stores. And within two weeks, they shipped them all back. They said, “we can't sell your product”, so, “how do you know that?”, because social media has let us know that they don't care. We don't have to take three months to figure that out any longer, we can find out right away. So real time is a big deal. Retailers really feel about how their relationships are with customers. It’s getting to a more honest time, I hope because the resistance advertising is so strong, that they're just not going to tolerate it.

Mariam Sobh 23:27 Well, from your point of view, Jeff, what are the trends that you think we'll see over the next five years when it comes to the future of retail and dynamic retail experience?

Jeff Doud 23:34 Well, one trend is screen space itself, the sizes and technologies that bring that into a space is really variable. There are so many ways to do it, and what choices do you make? And why? And how many people do you expect to command attention from at any particular time, it's way different. And so, if you have a interactive experience that requires two or three people to stand in front of it, to understand what it is, it's way different if there's 350 people. Those kinds of trends lead to bigger and bigger involvement in a smaller and smaller way for the brand. I think we have to do better; I think we have to neutralize the effect of the brand and allow people to invite that brand into their experience rather than dealing out the experience and saying: “Okay, here's what I just did for you, eat this, digest this and let us know how you feel”. Not so much anymore. I don't I just don't see that the same way. I think we're getting to a time where we expect people to mingle there. They're not going to crowd into a space, they're going to spread out. They're going to try to have public experiences but not get into situations that are going to be threatening. And that changes the dynamic of that quite a bit.

Mariam Sobh 24:40 I'd like to thank Stan Yoshihara and Jeff Doud for taking the time to guide us through the future of retail and the dynamic experiences which await us. I'm very excited to see how dynamic retail experiences play out in my city as well as the rest of the world. I really do think the possibilities are endless. I Mariam Sobh and this is changing places brought to you by Avison Young.

See places changing and evolving in your neighborhood? Share your evolving spaces with us on social media using the hashtag #changingplacespodcast. I am Mariam Sobh and this is changing places brought to you by Avison Young.

Changing places is brought to you by Avison Young. Our producer is Andrew Pemberton-Fowler. Our sound engineer is Patrick Emile; additional production support is provided by JAR Audio.