Interview: Storefront CEO On The “Phygital” Retail Experience Of The Future
In the second part of this interview, the retail startup's CEO, Mohamed Haouache, lends his insights on short-term retail and China's fast-growing place in the future of retail (physical and otherwise)
Online shopping has become more and more popular, and is set to continue its meteoric sales boom; however, consumers are still eager to experience a brand and product in a tactile way. Even in China, where e-commerce giants like Alibaba dominate, physical retail has still proven desirable amongst consumers. Storefront, the world’s largest open share marketplace, acts as the intersection of retail, real estate and consumer needs, making it easy for retailers to create pop-up stores where the primary goal is not simply to sell a brand and its products, but invite consumers to experience the brand, selling consumers on a brand instead.
Storefront CEO and co-founder Mohamed Haouache spoke to PSFK about identifying new ways to experience retail environments and the future of the pop-up space.
I'm wondering if you can specifically give any details around the virtual reality pop‑up store?
We came up with this idea simply because we believe that there will be what we call a “third universe.” The first one being the physical retail, the second one being the online traditional e-commerce format.
We believe that there is a need for these hybrid formats. The VR pop‑up shop is solving a lot of the limitation of physical or online retail. When we launched this idea, we really thought that it was just a test. We were not sure that there would be a market. We were not even sure that there would be brands willing to pay for that.
What is interesting is that VR pop‑up stores are technically a Shopify, which is merging with Oculus. The VR pop‑up stores of Storefront could theoretically be in the future a Shopify type of interface.
It works quite well with accessories, shoes, or bags. These products tend to be quite successful in some VR pop‑ups. The brand can use this VR pop‑up store link the same way they will advertise the website. For us, it's an extension of our ecommerce platform for our clients. We are still learning about our clients' needs. My real thinking is that in two years, brands will install their VR pop‑up stores the same way they will set up their Shopify accounts.
Is it going to be with Storefront? Maybe. There's 100% conviction that VR pop‑ups are the future. We call it VR pop‑up, but the truth is, it's going to be an online portal, which will be in a VR world.
Like you mentioned, it's just as important to be available on all touch points for the consumer journey, and being where they are.
It's exactly the case. Keep in mind that a brand, through this format, could theoretically decide that they want to set up their VR pop‑up in a unique universe. It can be Paris, it can be elsewhere.
The message that we are sending today is that short‑term retail is going to be the new long‑term. Our biggest conviction today is that we are going to change the way retail is set up. We're going to send this message that selling a product, and the cycle of sell, is going to be shorter and shorter in the future, and that we're going to push the limits of the commercial real estate industry, by pushing them to be more flexible.
Do you think that it encourages more experimentation, just within the retail format, and it gives brands more liberty to create really exciting and innovative experiences for their customers? Would you say that's a benefit?
Absolutely. That experience is just one angle when you look at short‑term retail. The second one is the financial benefits. You no longer have to commit, and therefore, you don't have to take a financial risk. The third part is the flexibility to test a product, a new line, a new collection, a new neighborhood, a new environment or even a new color. This can be done because you then have the financial risk of being committed for a long period of time.
It will definitely be really interesting to see where the company heads in the next couple years as these disruptions manifest, and then solidify, too.
There won't be any commitment in the future. Brands will no longer commit into a long‑term lease, and pop‑up shops are going to be the way of selling products in the future.
A shopping mall company in Europe was telling me six months ago that they believe that by 2030, 50% of their rental fees will come from pop‑up shops. That's huge, because we believe that today, three to five% of rental fees in shopping malls are acquired from pop‑up shops. From three to five to 50% in 12 years, it's going to be a revolution.
Capitalizing on the disruption of retail to meet consumers at their new touchpoints is Storefront's strategy to pioneer the future of the industry. For more examples of how retailers are innovating in a transforming landscape, see PSFK's reports or newsletters.