The Fall 2018 RH (formerly Restoration Hardware) catalog starts with a letter from Chairman and CEO Gary Friedman titled “The Death of Retail is Overrated.” It’s a thought-provoking missive, and it got us thinking about how thin the line is between the “Death of [blank]” and the “Golden Age of [blank].”
Revitalizing the Brick & Mortar
Here’s the second paragraph from Friedman’s letter:
“While the web has shined a bright light on the dull and decaying stores that are dying from old age and a lack of innovation, we believe history will demonstrate that the physical manifestation of a brand will prove to be the most compelling and cost-effective way to engage and inspire customers in a physical world.”
This bold statement was written around the opening of RH New York, a 90,000-square-foot gallery/showroom/restaurant /cafe/design experience, a $50 million brick & mortar that Friedman claims will generate $100 million per year in revenue once it’s operating full bore.
The Death of Television?
Despite Gen Xers canceling their cable subscriptions, Millennials failing to ever get cable, and a substantial cohort of Gen Z still unsure what cable is, no one in the last ten years has ever mentioned the Death of Television.
Networks, investors, and creators have simply recognized shifts in technology and the market and changed tactics to better accommodate these changes. In most cases, the audience for any given show has shrunk but the loyalty for any given show has increased with a vengeance. And the technology and innovation happening in the medium push storytelling and audience experience forward constantly.
So are we living The Death of Retail or is this a Golden Age that only the least trenchant (i.e., most creative) retailers can see?
Prioritizing Experience, Everywhere
“Whether it’s an in-person experience, online experience, or [a] mix of the two, it goes back to how retailers entice customers to shop with them and build that consistent experience across platforms, be it in-store or online.”
Or as Gary Friedman says:
“If someone presented milk in a more compelling way in a grocery store, they’d sell more milk.”
Nike, Armani, Ralph Lauren, Tiffany & Co, and Bonobos are a few of the brands whose approach to IRL retail springs from the same philosophy as that of RH. They’re the vanguard of retail, the harbingers of The Golden Age. They’re retail’s Sopranos, Mad Men, Breaking Bad, Deadwood, and Arrested Development (though we can’t say which is which!).
The Formula = Reinvent the Formula
When creativity, innovation, audience engagement, technology, and capital intersect, you will get The Golden Age of [insert whatever]. In his Fall 2018 letter, Gary Friedman captures perfectly why so many retailers think retail is dying. (Spoiler Alert: it’s not the customers).
“We don’t believe ‘bucket lists’ of the future will be filled with lonely online activities... We look forward to experiencing new restaurants and resorts, plazas and parks, markets and malls, and yes, stores.
“The ideas of the future don’t exist in the past, and neither do the stores of the future. I believe we are witnessing the lost decade of retail. Where the vast majority of capital in our industry has been allocated to online initiatives, whole retail stores are left to rot. The truth is, most retail stores are archaic, windowless boxes that lack any sense of humanity. There’s no fresh air or natural light, plants die in a department store, and I’m sure it’s not the best environment for humans either."
By this point, it’s an old adage that more and more people would rather spend their money on “experiences” than “stuff.”
We think Gary Friedman would agree: Golden Age Retailers provide both.
Love contemplating and anticipating the future of retail? Check out this webinar on the digital retail revolution with Eloquii CEO Mariah Chase to learn about what the retail landscape will look like in five to ten years.