Meet The ‘Airbnb Of Retail’

As most of our readers have probably heard, eCommerce is the wave of the future. For 10 to 15 years — depending on how tech savvy the crowd one runs with is — people have been writing physical retail’s obituary and bemoaning/cheering loudly for the day when all commerce is conducted from a computer (or smartphone — depending on which version of physical retail’s obituary one is reading at the time).

And these prognostications of doom are not exactly entirely unfounded. For the last several months, SKU and RetailNext have been tracking the footfall to the nation’s physical retailers, and that story has featured a lot of downward pointing red arrows. Foot traffic is falling; so are sales and the number of transactions consumers are doing in those physical storefronts. The story is also written in the numbers of national retailers reducing their physical footprints and closing stores, or shrinking them. Even Walmart — the arguable inventor of big box retail — is looking to scaled-down Express locations that aim to deliver the Walmart experience over smaller square footage.

While the retail landscape is undeniably changing and that change is being undeniably pushed along by the ever more digitally connected consumer, there is a world of difference between physical retail that is diminishing in size and physical retail that is dead, or even dying. The reality is that a big chunk of retail still takes place in a physical location, and according to Forrester, it will be 2018 before physical retail owns less than 90 percent of all transactions.

Which is why recently some big names in eCommerce have made the jump to the real world — with brands like Amazon and Warby Parker setting up shop in a handful of major city locations. But a full-scale physical retail business may not be the move to make for all eCommerce ventures, and that is where Storefront enters the equation. They allow a wider range of merchants to set up physical shop — if only for a short time.

“We’re like the Airbnb of retail,” said Cofounder Tristan Pollock in an interview.“They didn’t invent renting out rooms; they just made it much easier. We didn’t invent pop-ups. We’re just making it easier to do them.”

[bctt tweet=”“We’re like the Airbnb of retail. They didn’t invent renting out rooms, they just made it much easier. We didn’t invent pop-ups. We’re just making it easier to do them.””]

Pollock noted that the concept for Storefront was born after he and his cofounder, Erik Eliason, started noticing a lot of empty storefronts during the Great Recession in their home city of Minneapolis and thinking there had to be a better way for those already existing resources to be tapped.

That listing space has a very Airbnb-like feel. Commercial listings are paired with descriptions, pictures, reviews, rates and available dates — all with an easy enterface to book and pay. Storefront makes its money charging a 6-to-12 percent commission to renters and provides general liability coverage.

And Storefront really isn’t kidding about that widely ranging client base. Ever wondered what you would do if you were Kanye West and were looking for a location to sell your entirely reasonably priced merchandise in New York City while the tour is in town, knowing full well that a mere concert booth cannot contain the glory that is the merchandising efforts of Kanye?

If you’re Kanye, you don’t despair that $35 totes and $20 plain white t-shirts will go unsold and then may be unloaded on Twitter. You, instead, hook up with Storefront to rent a pop-up shop at 355 Bowery for a little over $1,500 a day. Three days later, the Yeezus tour had moved on, and the shop was a mere memory. But not before generating a haze of headlines about Kanye’s retail genius. And a pile of dough.

Storefront creates pop-ups for a wide range of needs –  from major market players like Nike to fashion boutique firms that have a small but rabid following in maybe one or two cities. There are tech firms that are trying to stay out of traditional leasing arrangements.  All in the company has worked with 2,000 brands and has over one million properties up for grabs nationwide.

Storefront started out in San Francisco and quickly expanded to New York. These days, Storefront also works with business and commercial real estate owners in Chicago and Los Angeles and says its customer base is expanding by 20 percent each month.

“Online shoppers cannot touch or try on products as they shop, and that’s a limit because, on some very basic level, that is a consumer need. So, we help brands meet that need but in a way that is targeted instead of a long-term commitment. Some brands will go on to have full-time physical stores but a lot of what we see is how smart retailers are leveraging the rarity of their physical events and marketing tools, and that is a powerful force.”

And it is a force that Storefront is hoping to make even more powerful by allowing potential retailer and brand partners on the platform to take an extremely detailed look at the properties they are considering for short-term occupancy. The firm is launching a new tool called RetailGrade.

RetailGrade is a proprietary algorithm to factor population density, nearby shopping and entertainment options and the performance of existing retail stores to generate a “foot traffic” score from one to 100.

Storefront has a theory: Physical retail isn’t dead; it’s just changing, from something that was once very inflexible to something where lines are blurring between methods of consumer outreach available.

Storefront plans to continue its expansion into a few more yet-to-be-specified cities later this year and early in 2016 are hoping to more than double the 1.1 million locations for rent on the platform today.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

Click to comment