Despite the resurgence of store sales, emerging brands are still unsure of how their physical retail strategies will shake out. With economic uncertainty still looming, many brands are trying to figure out a balance between brick and mortar expansion and their growing e-commerce sales. This leaves planning for new stores trickier than ever.
Todd Sachse, founder of Sachse Construction, has been building retail stores for over 30 years. Since starting out, he says that the physical retail landscape has evolved immensely — becoming less focused on traditional malls and shopping centers. Sachse’s team began by specializing in building high-end stores, mainly for luxury brands like Tiffany & Co. and Gucci. In recent years, the 120-person company has been tapped to help launch the physical presence for direct-to-consumer brands, such as Allbirds and Bonobos.
In an interview with Modern Retail Sachse discussed the challenges of building stores during the pandemic, data-driven brick and mortar expansion and emerging store formats. This interview has been edited for length and clarity.
How has the physical retail landscape changed over the last few decades?
In the ‘80s and ‘90s, America got way overbuilt for retail’s needs, so there is a contraction currently happening. This was one of several factors that contributed to brick-and-mortar’s decline, along with the rise of online shopping. And of course the pandemic highlighted all of these obstacles.
Now that tenants have more flexibility, outside of the traditional long-term property leases, many brands are testing a new market in new ways. More than ever, there is data involved in where — as well as what kind of store — a brand is opening. Many retailers are using micro-data that informs their next redesign or opening — sometimes it means moving down the hall or a block away to capitalize on traffic or specific demographics, like age or gender.
How have these customer insights changed the way retailers think about locations and design?
Retailers are thinking outside of the box when it comes to having [an] in-person presence. For example, we’re building more pseudo or “open” popups in common areas inside malls or at outdoor centers. These are usually open for three to six months and feature a limited number of products that the retailer wants to test in that market. This small investment helps the client check whether there is potential for an official opening.
We also try to make recommendations based on experience, such as suggesting they reuse multiple pieces of fixtures and furniture that can be moved from one pop-up to another. I think with so many brands still navigating brick and mortar openings, this will be the norm for the next couple of years.
How did the pandemic and the shortage of supplies impact retail construction schedules?
There are definitely supply chain issues. We are feeling it for some of our high-end retail clients in the U.S. One of the reasons being that many of the materials and millwork come from overseas. Between production issues in other countries — due to shut down or understaffed factories — and shipping or customs delays, we have store builds that are delayed by four to six weeks.
Digitally native and DTC brands often experiment with pop-ups and temporary showrooms. How do you go about building shop formats focused on market tests and customer experience?
In the digitally-native space, stores like Warby Parker and Allbirds are focused on bringing their existing digital roots into the store. Whereas traditional shops emphasized sales in the past, these brands don’t care whether the customer buys their products in store. So when building them, these locations are laid out to reflect that strategy. This could mean building designated spaces for features like contactless checkout or digital signage. The goal is to make the in-store try-on experience fully integrated with their e-commerce channel.