RETAIL AS A SERVICE: EXPERIENCE OVER SALES
Esther Stein
Online retail may be booming, but not every product is a sure-fire success: some need additional explanation; others impress mainly via touch, feel or smell. That is why many online brands desire an offline presence. But if they only offer a handful of products, sharing space is more effective than opening their own store. “Retail as a Service” (RaaS) is the name given to this ever-popular store concept. In Germany alone, three such stores were launched in November 2020: Alhambra and The Latest on Berlin’s Kurfürstendamm, and _blaenk on Cologne’s Schildergasse.
Brands can agree short-term leases for spots in – usually generously dimensioned – stores; modular shop fitting systems can be quickly adapted to the brand’s identity. The curated product range is carefully displayed by trained sales staff and RaaS providers manage the entire sales process. These teams also collect a range of data on consumer behavior, which they then provide to brands. At the Showfields store in New York, for example, heat maps are used to determine which items consumers are drawn to. In exchange for this service, brands using the space pay a monthly fee.
At Showfields, brands rotate every six months; in other stores, turnaround can be much faster. This turns physical retail into an innovative shopping experience: there is always something new to discover, try out and touch, and the spaces also host events and special product showcases. Yet items are mostly purchased online – here the much-feared showrooming effect is actually encouraged. What matters isn’t turnover, but how much experience you can pack into one cubic meter.
One of the RaaS pioneers is start-up b8ta. Since being launched in 2015, it has opened 20 of its own stores in the US and over 70 shops-in-shops, mainly involving consumer electronics. November 2019 saw its first store for fashion and lifestyle products with the opening of Forum in Los Angeles. Locations in San Francisco and New York soon followed. In contrast to traditional retail, here brands are given access to all the relevant data via a platform. They can even use a chatbot to see in real time how many customers are interested in their products and in which shops.
Experts believe the future of brick-and-mortar retail lies more in experience and discovery, and less in the actual purchasing of goods. If traditional retailers wish to stay relevant, they will need to rethink their role and be willing to adopt new concepts. RaaS stores are already showing what will matter in the years to come: inviting, scaled-down boutiques, eyecatching product displays, a friendly atmosphere and plenty of opportunities for shoppers to interact with their surroundings.