As digitally native brands turn to physical retail, shopping center developers are eager to attract them.
The latest is high-end mall operator Macerich, which this week launched BrandBox, a service designed to primarily cater to high-growth digital brands more accustomed to tracking click-rates than foot traffic.
BrandBox is a natural stepping stone between a pop-up and a long-term retail commitment: It offers flexible store space, both in terms of footprint, which tops out at 2,500 square feet, and lease time, which starts at six months. And it builds on the pop-up template with add-ons such as customizable store design, retail analytics, staffing and security tags. Store setup takes just a few weeks, and BrandBox handles the permits, lawyers and store designers.
The idea, said Macerich evp and chief digital officer Kevin McKenzie, is for the BrandBox experience to mimic the sort of plug-and-play services that exist in e-commerce. “Today, when you build a company or brand, you generally don’t build-in physical retail. It’s not that you don’t want to — you just don’t know where to start,” he said.
The first BrandBox location opens this weekend at Tysons Corner Center in Tysons, Virginia, with brands including cosmetics brand Winky Lux, cashmere apparel brand Naadaam and home furnishings company Interior Define. In addition, there’s mattress maker Nectar Sleep and flower-delivery service UrbanStems, both of which count Brandbox as a first physical retail experiment. These are joined by 30-year-old fashion brand DKNY, notably a “heritage” brand among a class of digital natives that has had a relatively long life in department stores.
DKNY views this model as an opportunity to test new concepts, such as product capsules and digital elements like its recent #IAMDKNY campaign, through which fans were able to create custom social content, according to a company spokesperson. In December, DKNY will offer multiple touchscreen points of sale that will allow customers to access a customizable digital shopping experience.
In 2019, BrandBox will expand to other Macerich locations including Fashion District Philadelphia, Santa Monica Place, Scottsdale Fashion Square, The Shops at North Bridge, The Village at Corte Madera and Washington Square.
“When you’ve bought everyone you could buy on Facebook and Google, you need to open a store,” he said, adding that the six-month minimum is key for gathering enough data to be informed enough to make a permanent decision.
The ultimate goal is for these brands to take up long-term residence in Macerich properties. “We want them to be long term, so this is a lab to accelerate that,” he said.
Previously, McKenzie held the same role at Westfield, where he led Westfield Labs and its Bespoke project in San Francisco, which includes co-working space for retail tech companies, event space and various types of store space for testing.
He built on that experience in BrandBox, knowing that each brand would have different objectives, McKenzie said. Winky Lux, for example, is planning a space that is all about the experience — as much about encouraging people to Instagram as it is about selling product. Others, he said, might be about building awareness or transactions.
Other companies that have launched a “Shopify-for-stores” concept include Neighborhood Goods, which just opened in Plano, Texas, with 30 digital natives; Bulletin, which focuses on female founders; and Fourpost, which recently opened Studio Shops in the Mall of America with short-term retail spaces of up to 100 square feet. Even Shopify, which is an e-commerce platform, now offers a physical retail toolkit using its technology.
McKenzie is excited not only about mirroring the types of analytics that are possible online — he compares the number of people who walk by to impressions and walk-ins to clicks — but also in measuring the impact of the physical store on e-commerce by zip code.
This, he said, will be one of the key metrics of BrandBox’s success, in addition to keeping the attention of consumers.
“We are in the business of leasing space, but none of that is relevant if you don’t have consumers,” he said. “They want to see something new, so if this works, it ought to create a draw. Consumers will think, ‘If I go there, every couple months I ought to see something new.’ They’re looking at Instagram and seeing new things, and they expect to see new things if they walk around, as well.”