CoRetail: a possible option for empty store space?

With the continued rise of online shopping,     Amazon’s recent $5 discount if you left the store and bought with them, eBay countering with a $10 offer to return, Groupon launching a buy local promotion, and considering this interview with Marc Andreessen on his predications for 2012; there can be no doubt retail is going through a phase of serious distruption.

With high street vacancy rates rising in the UK and here in Canada – at least in my neighbourhood – plenty of empty stores, combined with new retail ventures choosing to go online due to cost and reach; I am thinking through a simple idea which, for lack of a better title, I’m calling CoRetail.

Personally, I like to shop online but I don’t want to see shopping via good old bricks-and-mortar stores disappear. Local eco-systems ranging from food and drink providers, to local transport services, rely on people heading into shopping areas. These areas are often a focal point of communities.

Take the example of local farmers markets, sure you could just order everything online and have it delivered, but there is something nice about sampling the products, talking to the producers, browsing items you might not normally buy and chatting to other customers to find out how they cook braising steak. It can be a true social experience.

While some items lend themselves to online shopping, many don’t. I carried out a tiny (not representative) straw poll yesterday and found that out of 8 guys asked, 7 would not buy clothes online, apart from t-shirts.

The problem: economics. When you factor in rent, insurance, staffing, store fittings, inventory spread over several locations, security, theft and so on, it doesn’t seem to stack up versus e-commerce.

Perhaps a model for moving forward is to learn from the coworking movement, such as Citizen Space in San Francisco, and apply this to retail stores. Essentially, you take some prime retail space and allow online boutiques/stores to book time/space in there to showcase their products and interact face-to-face with shoppers. Customers would still order online using one of the available terminals, or via their own device. Just scan the barcode using a CoRetail app, and the order is placed. Vendors could also utilise something like Square to take payment for orders which are then dispatched via their online business.

An online venture might make use of the location for one day a week, or perhaps one week a month, either way, it removes the burden of a full lease on premises which no longer makes economic sense for many new/smaller retail businesses.

Warby Parker is a good example of an online business mixing it with offline bricks-and-mortar premises. While their full range is online, you can go to showrooms and try out popular items, get advice and order your selection via supplied terminals. For the holiday period they do offer product on site but usually the showrooms don’t stock inventory, you try items out and order online for home delivery.

The notion of CoRetail overlaps heavily with what you currently get at tradeshows, farmers markets, street markets and other exhibition type events that are not permanent fixtures. As more high street stores struggle vs online or out-of-town big box stores; providing high quality, prime locations, which are effectively shared, showroom style, among online retailers, might be worth exploring.