This article is part of Raydiant’s new Future of Retail series which interviews the world’s leading retail experts to better understand how the industry has evolved and most importantly, where it’s headed.
The following is from a recent interview with Triangle Capital LLC co-founder and partner Richard Kestenbaum.
What personally excites you the most about the retail industry?
RK: We are seeing a burst of creativity that has led to the creation of so many new and innovative companies, particularly in the direct-to-consumer business. Meeting and working with those entrepreneurs makes my work more interesting than I ever thought it could be. As direct-to-consumer evolves to become more than just online selling, so many changes are happening and new opportunities are developing.
What has been the most dramatic change you’ve seen in the industry over the past 3-5 years?
RK: In the past, companies created products and after that they created content that we used to call advertising. But now we are seeing that happen the other way around. The best way to explain it is to use Glossier as an example. It started as a blog and after an audience was created that identified with the particular point of view and kept returning over and over, it introduced products. The advantage of that strategy is that it is real and authentic, something so important to consumers, and if it’s done well it makes customer acquisition, one of the most challenging things in the direct-to-consumer business, much more doable.
What are the top trends you see shaping brick and mortar retail in the next 3-5 years?
RK: The way in which stores have changed is the biggest trend. It used to be that stores had stuff and if you wanted to buy stuff you had to go to the store. But now that you can buy without a store, the question of what a store should be is the raging question for retailers right now. There’s no one right answer for this; whereas stores all used to have the same purpose, now every store needs to have a different purpose, related to its brand and culture. Figuring out what’s right for which brand is the work of the next several years at least.
What technology do you believe will have the biggest impact on the retail industry in the next 3-5?
RK: At the moment, the industry is focused on supply chain. That has happened because of BOPIS (buy-online-pick-up-in-store) and BORIS (buy-online-return-in-store). With BOPIS and BORIS, products are so often in the wrong place and fixing that is important to the economics of retail. But once that’s fixed and working properly, I believe retailers will focus on embedding better user interfaces for store associates to make them more effective. Nothing is a more effective device to convert a browser into a customer than a great retail store and the linchpin of that conversion is the store associate. Helping those associates have a better work experience is critical for growth and retention of the best people.
What’s the future of brick and mortar retail?
RK: No one knows the answer to this question but we are starting to see some hints of it. The biggest clue so far is the new mall that is about to fully open in Northern New Jersey called American Dream. It has allocated its space 55% to food and entertainment and 45% to retail. It is taking guidance from the model of Disney World and Las Vegas where you go for entertainment and do discretionary shopping along the way.