When it was time for 3-year-old direct-to-consumer shoe brand Rothy’s to open a physical store, founders Roth Martin and Stephen Hawthornthwaite chose Fillmore Street in Pacific Heights.
In what was once a beloved neighborhood shoe-repair shop, the founders tapped interior designer Steven Volpe to create a wood-paneled space that reflected the brand’s mantra of “live seamlessly.” Upholstered surfaces are covered in Rothy’s recycled and 3D-knit materials, and the walls are entirely magnetic – making it easy to adjust wall displays (and fun to create an Instagram video-loop Boomerang).
San Francisco was a “logical jumping-off point” for the digital native to make its analog debut, Martin says. The sustainability minded brand’s DNA, and its original customer base, is rooted here, for one, and the 600-square-foot space was a way for the brand to conduct consumer research, Hawthornthwaite adds – and it’s important to get the recipe right before considering other markets.
The company’s biggest following is in New York – the San Francisco customer has been “a bit slower” to adopt the fashion side of the brand – but the densely populated, wealthy Bay Area customer base is made up of early adopters eager to experiment.
Rothy’s is part of a groundswell of online retailers that are setting up permanent shops this spring and summer, many for the first time, in ways that render San Francisco a retail testing ground. Residents are not only unfazed by fresh ideas and lofty goals, but they actively seek them out with the pride that accompanies a “told ya so” early adopter – whether it’s Asian food crazes, exotic spirits like Fernet-Branca, cult makeup brands or app-enabled transportation and services. Even Levi’s, Lyft and “likes” were once merely moonshots.
Now that appetite for disruption has trickled down to the traditional retail experience. Mall rats fill in for lab rats, and guinea pigs and focus groups have been rebranded an “engaged community.” Even A/B testing has gone analog. Instead of changing a variable in a website to see which version performs best, a physical store might offer two experimental patterns to see which sells best before making it available globally.
Bespoke, a co-working space that opened in Westfield San Francisco Centre a couple of years ago, is perhaps the most literal interpretation of a retail testing ground. About 80 companies work in the space daily, including retail-tech startups, venture capitalists and innovation teams from larger brands. Global retailers often visit to be paired with technologists in the Bespoke network, says Bespoke director Judith Shahvar. Hemster, for example, is a tailoring startup that works with customers of mall stores that include Zara, Guess?, Express, Michael Kors and Kate Spade.
“The Bay Area’s mentality of innovation and experimentation infuses into the work culture in the city at every level,” Shahvar says. “A culture of innovation, combined with a strong venture capital presence and talent pool of technologists, makes San Francisco an ideal place for retailers to evolve with neighboring technology companies.”
Plus, she adds, when it comes to beta tests, “residents have exceedingly high expectations for a product or service.”
Rothy’s was the first apparel brand to host a pop-up at the Ferry Plaza Farmers Market, and is just one of many companies that first experimented with showrooms or pop-ups that have now manifested into more permanent locations, among them Allbirds, Modern Citizen, MM.LaFleur, American Giant and ModCloth.
This month, ModCloth will open its first permanent California store. Called FitShop, the space on Fillmore Street was largely informed by a temporary concept that the San Francisco brand tested near Union Square in 2015 to coincide with the brand’s first line of ModCloth-branded apparel. (The company has since been acquired by Walmart.)
Experimental features of the pop-up that made their way to the permanent store include a full range of sizes displayed together, up to 4X; the concept of a sample shop, in which the customer tries on clothes in real life (IRL) and then orders by mail; a selection of vintage clothes and accessories curated for the San Francisco market; and social shopping events.
“The demand for personalization – high-tech, high-touch – in this market allows retailers to test and trial various products, services and variations across a diverse audience that is vocal, expressive and discerning,” says Elizabeth Cooksey, ModCloth vice president of retail and customer experience.
One of the lessons of the 2015 pop-up was the array of occasions for which the customer shops, from dressing for work to weddings, in addition to a general sense of how much customers wanted to engage with the brand.
San Francisco etailer Modern Citizen began a few years ago with temporary shops in Facebook, Sephora and Lyft offices, which founder Jessica C. Lee says allowed the brand to collect feedback and build relationships with a community of early adopters. After a short-lived storefront in Cow Hollow last year, Modern Citizen plans to return to Union Street to debut its first flagship store in the fall.
New York womenswear brand MM.LaFleur has opened its first San Francisco showroom; its last collection introduced “creative casual” to serve the San Francisco woman, for whom “what to wear in tech is such an interesting conundrum,” says director of offline retail Rachel Mann.
Founder Sarah LaFleur says that after 10 local pop-ups, she’s found that Bay Area customers “are more willing to take a chance on a brand they haven’t heard of.” San Francisco is the company’s third largest market, after New York and Washington, D.C., but because the real estate market is so competitive, it took three years to land the ideal location where the FiDi meets SoMa.
Local luxury consignment site The RealReal also ran into the real estate issue. Chief Merchant Rati Levesque says the brand wanted to open a pop-up in both New York and San Francisco, but New York came first because they could find the right space faster. The RealReal opened its two-month space in Union Square in November. Levesque says that although the market sizes of the two cities are significantly different, the San Francisco iteration had revenues that were “just as strong” as New York’s. (San Francisco preferred Gucci while New York clamored for Céline and Hermès Birkin bags.)
Beloved basics etailer Everlane, too, experienced a delay in opening its San Francisco store after first putting down brick-and-mortar roots in New York.
New York street-wear brand Supreme is still waiting to open a store in San Francisco, and finally found what it hopes will be a space on Market Street near Seventh Street, but it’s not set to open until next year, pending approval from the city.
New York and San Francisco are often at the top of the list of retail openings, with San Francisco especially hospitable to newfangled ideas. Rent the Runway, for example, opened its first store-in-a-store in San Francisco’s Neiman Marcus in December 2016. The space lets shoppers rent the type of clothes and accessories they would normally buy in the high-end department store.
This spring, New York beauty company Glossier opened a temporary space in 40-year-old sandwich shop Rhea’s Cafe in the Mission District.
“We’d been wanting to come to San Francisco for a while – it’s our third-largest market in the U.S. after New York and L.A. – and realized early on how central food and homegrown institutions are to the culture,” says Glossier head of retail and offline experiences Melanie Masarin. This sparked the idea to test an entirely new format.
“We felt that the consumer in S.F. would respond well to the wacky idea of selling beauty products and fried chicken side by side.” Ultimately, the one-month experiment saw more than 20,000 visitors and allowed Rhea’s Cafe to stay in business, she says.
A year ago, local clothing consignment website ThredUp opened test “smart stores” in Walnut Creek and in San Marcos, Texas.
“The Bay Area’s history with technical innovation – and today’s abundance of tech startups and disruptive retail brands – makes San Francisco-area consumers particularly willing to engage with new and different experiences. ‘R&D’ is a way of life here,” says ThredUp head of retail Heather Craig. ThredUp has tested concepts such as “immediate payout,” which allows consumers to bring in clothes they want to sell and be compensated immediately.
The brand closed the Texas store but now plans to open more locations in Burlingame, Los Gatos and Pleasanton, after retail tests in Walnut Creek “blew San Marcos out of the water” in terms of profitability and customer acquisition.
Testing grounds aren’t limited to stores, or fashion. Bird, a San Monica scooter-rental service, recently landed here because of the city’s heavy traffic and its goal to reduce carbon emissions. It also didn’t hurt that “transportation disrupters” have become synonymous with San Francisco. And e-tailer Brandless has experimented with “activations” on the Berkeley campus and beyond that don’t even sell product.
And, of course, there’s the desire to create something tangible that people will be compelled to share online, says Ross Bailey, who is the founder and chief executive officer of Appear Here, which matches companies with retail space to host pop-ups.
Water company Hint, whose headquarters is on Union Street, has been gradually expanding its real estate footprint as the business has grown. This summer, the brand will open its first official “store” there. The plans include a water bar, where customers can saddle up to try flavors while learning about the brand’s ethos in a space that will be designed to look and feel like a beach oasis. Chief executive officer Kara Goldin anticipates it will be very Instagrammable.
“This could be the next iteration of retail,” she says, comparing the experience she envisions being more akin to a winery. “It’s not about walking in to buy something or drink something but about experiencing ‘What does the brand stand for? What is the energy that I get when I go into this company?'”
For Hint, San Francisco was the only location that made sense – for now.
“There was no better place to launch besides here,” Goldin says, “not only because it’s the home of our product but because it makes sense in people’s minds for quality, healthy products. We didn’t think of launching anywhere else.”
Maghan McDowell is a San Francisco freelance writer. Email: email@example.com.
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