With more purchases shifting over to e-commerce daily, the retail apocalypse is proving to be more than just media hype about the death of malls and the decline of the independent storefront.
More than 3,800 stores are expected to close their doors by the end of this year, according to a Business Insider analysis. Credit Suisse also is forecasting a bleak future. Analysts at the investment bank predict that up to 25 percent of malls will go out of business by 2022.
So why would two entrepreneurs choose this moment to build a new outdoor shopping center on a ruins of a car dealership in southern California?
Despite the dire forecasts, Joseph Miller and his partner, David Fishbein, set out in 2013 to create something that was anything but mall-like. They aimed to create a refreshingly unique experience for in-person shoppers, not just a place to cross items off of a shopping list. A truck selling fresh flowers and greeting cards stops by on Fridays. You can have your aura imaged. There are in-store lectures about collecting rare sneakers.
“We’re like a form of entertainment and leisure,” says Miller, co-founder of Runyon Group, the real estate development firm that created Platform. “Utilitarian retail is probably gone..especially if [online] delivery times get shorter. It’s not coming back.”
Today, the rainbow mural covering Platform’s parking garage stands out against the blue sky of Culver City, Calif., adjacent to the city of Los Angeles.
The space hosts 20 carefully curated stores. Spaces dedicated to temporary pop-ups are located among more established brands like Sweet Green and Soul Cycle. Often, the pop-up shops may be the only brick-and-mortar location for a brand in Southern California—or even in the United States.
The restaurants that accompany the boutiques are equally distinctive. Shoppers can pick up a New Orleans-style cold brew from Blue Bottle Coffee, or an Açaí bowl from São Açaí, as they browse.
Miller says that the key concept underlying Platform was to choose brands carefully, and then put them together in a compact and walkable setting—with car parking tucked away out of sight.
“[David and I] started our careers basically helping brands that we really like find space in cities,” Miller says. “Then we moved to saying, ‘Hey, if all of these brands want to go to these kind of spaces, but we can’t find any of these spaces, why don’t we create it?’ That was Platform.”
According to Miller, he searches for brands that not only sell an interesting product, but also deliver a remarkable retail experience for the customer.
“We see a lot of places that have [a] great product. … We’ve seen it. We’ve touched it. It’s incredible, but they show up, and they can’t run a store for the life of them,” Miller says. “Or…the place looks great, but the product kind of stinks. The truth is, it has got to be both. … There’s no room for slipping up.”
‘Time Well Saved’ versus ‘Time Well Spent’
Miller acknowledges that online retailers often provide a more streamlined experience for customers than brick-and-mortar shops. Buying from your computer nixes the need to spend time driving to a store and waiting in a long checkout line.
“[If] I run out of shaving cream…I can just pick up my phone and take a picture of it, or say to…Amazon Echo, ‘I want this,’ and it just shows up at my door,” he says. “[And] the price is the exact same [as the store].”
Instead, Miller says, Platform’s focus is on products that are better evaluated and purchased in person, like clothing, fragrances, and furniture.
Platform also features brands that may not be available online or at other physical locations. For example, Nanushka’s Platform location is the Hungarian fashion brand’s only US outpost.That kind of differentiation can help shopping centers pull in even the most digitally-inclined consumers, says Joe Pine, a co-founder of the consultancy Strategic Horizons and author of the seminal book The Experience Economy.
“Malls are generic. … You go to one mall and you see the same things that you do in other malls,” Pine says. “And you need places that are unique. … [The] uniqueness of [Platform]…makes it very distinctive and makes it more of an experience.”
According to Pine, brick-and-mortar locations can either provide “time well saved”—a quick and seamless experience—or “time well spent.” But “time well saved” forces them to compete with Amazon and other e-commerce providers. “Time well spent” gives shoppers an enjoyable, memorable experience that will encourage them to return and to tell others.
“Pop-ups are one way of being engaging, because they’re unusual. They’re there for a short term,” Pine says. “When most companies do pop-ups, they recognize they have to provide time well spent.”
Selling Products versus Acquiring Customers
According to Miller, the value of brick-and-mortar stores lies in introducing new customers to brands, not just in selling products.
“I think you come to Platform and you’re just there to hang. You’re going to get some food. You’re going to check out the stores,” he says. “I hope you buy stuff there, but even if you don’t, you’ve just discovered [new brands].”
Customers who drop in to browse remember the new brand, Miller asserts, and then can come back to buy the product or order it online. He predicts that more retailers will start regarding physical locations as a way to build that initial relationship with customers—who will eventually buy through whatever channel they prefer.
“I think that the emphasis on making sure that you sell things in the store will go down quite a bit, and the emphasis on customer acquisition, which is bringing someone into your ecosystem…is going to go up,” Miller predicts. “It’s…about setting that marker in people’s minds and showing them something that they haven’t seen.”
A Consultative Shopping Experience
Platform has a concierge to direct visitors to the shops and restaurants that they’re looking for—or perhaps didn’t know they were looking for. Miller expects the same level of personalized service from pop-ups and retailers that operate in Platform.
Coast by Coast, a pop-up that specializes in swimwear, tailors the experience to each customer that enters their store.
“We…explain to the customer the types of brands that we carry, and we focus on quality and fit,” says Kristen Cleary, co-founder of Coast by Coast. “We always offer to…give [the customer] advice on fit when they are in the dressing room. So it’s not just like you put them into the dressing room and that’s that.”
Cleary started Coast by Coast in 2015 with her sister Lauren. Their original outpost was a mobile store in the back of a 1972 Volkswagen van. According to Cleary, the brand sought to improve the experience of shopping for a new bathing suit. After hosting several pop-ups out of the Volkswagen, Coast by Coast moved into Platform in 2018. Cleary says the space allowed them to stock a wider inventory.
With suits ranging in price from $120 to $400, Cleary says the experience and consultation helps justify the cost. “We’re there with the customer until she decides that she finds a piece that she likes,” Cleary says.
Events Add Energy
Platform hosts a variety of events for visitors—ranging from Pilates classes to summer block parties to a morning speaker series with coffee. According to Miller, event attendees are able to plug in to the trends and values that underlie the Platform brand.
“The way that we express what we think is interesting and new is through events. Being able to have that outlet to communicate who we are…is extremely important,” Miller says. “What’s the Platform perspective on X, Y, or Z? We need to be able to consistently deliver that.”
The Future of Platform
According to Miller, Platform’s parent company, Runyon Group, is bullish enough on the future of retail that it is working on several concepts of its own, in addition to continuing its hunt for new brands that can continuously refresh Platform. Runyon Group launched its first original restaurant, Hayden, a year ago.
“Now we’re building on that,” Miller says. “We have nine food and beverage and four retail concepts that we’re working on right now that will probably go in buildings that we own.”
Runyon Group is also working to develop the retail component of several other new real estate developments in Los Angeles, including Valley Country Mart and The Brickyard.
But they’re not forgetting the need to keep Platform relevant and fresh—a different experience on every visit.
“I hope that Platform’s a good enough brand where people want to just get up and go there, but it’s…about staying relevant,” Miller admits. “People look to us and say, ‘OK, what’s new? What’s new in fitness? What’s new in crafts?’ … We spend a lot of time thinking about that.”
But with Platform’s tenant occupancy at 100 percent as of September 2018, Miller and Fishbein have so far figured out how to thrive amidst the retail apocalypse.
