Strategies for Reinventing Physical Stores

AI companionship just became the top consumer use case. But the EDENS CEO spent 18 years building the opposite. She solved loneliness using real estate. And here’s how: EDENS tracks something most retailers ignore: Emotional attachment. Here’s the data: • 3.5 trips per week per visitor • 5 hours of dwell time • 1.3% additional wallet share for every 1% increase in time spent Her thesis? Connected to a place = more visits, staying longer, and spending more. The kicker? McLean's team discovered something: Over 1 million annual trips by people seeking public space. Not shopping. Not errands. Just human connection. How does EDENS achieve this? The "Consequential Stranger" Playbook: 1. Physical Design: • Wider sidewalks (so people can walk side by side) • "Jewelry on sidewalks". Places to pause and connect • Art installations that spark conversations 2. Tenant Curation: • Local "mayors" - proprietors who know every customer's name • Mix of convenience and experience • Programming for 18-hour daily use cycles The contrarian bet: While capital floods into triple-net drive-thrus and single-tenant boxes. EDENS doubles down on complexity: • Mixed-use, open-air formats • Community programming • Hyperlocal curation • Emotional architecture The result? Exceptional performance in a sector everyone declared dead. What this means for real estate: Physical places that foster human connection are thriving. But it requires a fundamental shift from transactional to relational thinking. McLean's prediction for the 2030s? We'll still be talking about location and humanity as the defining factors in real estate success. In a world where people pay for AI friends. Maybe the real disruption is remembering we're human. Can physical retail spaces combat loneliness? Or are we fighting a losing battle against digital isolation?

Amazon’s “Just Walk Out” technology demonstrates how AI, computer vision, and sensor fusion - similar to what you’d see in autonomous vehicles - can radically transform the way we shop. Instead of waiting in a checkout line, customers simply pick items off the shelf and leave, while the system automatically bills them. Yet with any shift toward automation, there’s the question of how it impacts employment and community economics. If fewer cashiers and clerks are needed, the ripple effects on the local job market can’t be ignored. Additionally, some consumers worry about privacy - advanced tracking systems gather a lot of data on purchasing behaviors, raising concerns over how, where, and for what purpose that data is used. Still, there’s no doubt this is just the beginning of technology-driven changes in retail. Beyond cashier-less shops, we might soon see: - Personalized In-Store Experiences: AI-driven recommendations could pop up on screens or apps as you walk through aisles, guiding you to products based on past purchases or dietary preferences. - Augmented Reality (AR) Fitting Rooms: Try on clothes virtually, see how furniture fits in your living room - without physically moving a thing. - Automated Inventory & Restocking: Shelves that monitor stock levels in real time and reorder items as needed, helping stores avoid both stockouts and over-ordering. - Drone & Robot Deliveries: As last-mile delivery becomes faster, we may see robots handling short-distance delivery or drones zipping packages straight to a customer’s doorstep. What do you think the next big change will be? Is it further automation, more personalization, or something else entirely? #innovation #technology #future #management #startups

Brick and mortar stores will either evolve or die. Netflix's pop up store at The Grove shows that they get it. Lots to learn here. As you walked around the store, their top shows each got their own section that felt like you were walking into the show. Squid Game had armed guard statues on their trademark staircase for pics. Stranger Things had an intense Vecna diorama for 'floating' selfies. Bridgerton felt like a pink tea room leaning into decor for the aspirational lords and ladies. Even Gabby's Dollhouse had kid-sized cut outs for a little toddlergram EMV. In an increasingly digital-first existence world, physical locations need to meet culture where it is: on social media. It started with coffee shops painting angel wings on their walls understanding the bevy of micro-influencers posing, then grabbing a latte. Then every movie theater started adding stand-ups for selfies, including the now-famous Barbie boxes that got so much Instagram play. Now I'm seeing apparel fitting rooms with textured backdrops, gyms with tripods to set up recordings at each work out station, restaurant discounts if you show proof that you posted pics using their hashtag, and even storefronts in well-trafficked areas that don't sell anything but a lifestyle, from luxury cars to high-end devices. The only way to compete with ecommerce is by creating a desirable experience. And the most desirable experiences for Gen Z can be shared online. #socialmedia #creatoreconomy #physicalshopping https://lnkd.in/eHdM9gvq

I just had a terrible experience trying to buy a new laptop in a Best Buy, a rare occasion when I went out to a physical store to touch and feel a device before making a decision. I was hoping to talk to someone with some knowledge about the product, but after 15 minutes of waiting (along with a few other customers), I gave up and went home to order online. No wonder Brick and Mortar retail is dying. But it is poor management that makes it incapable of competing against e-commerce, because I believe there is a role for physical retail. Analysts predict that by 2027, up to 50,000 retail stores could close in the USA. Many chains have completely closed down, like Bed, Bath & Beyond and Toys R Us. Yet, there are a few chains that are bucking the trend and growing rapidly, like Costco Wholesale, Ulta Beauty, and REI. I am no expert on retail, but here are my observations as a customer 1. #Curation not #Clutter: If I wanted to see every product under the sun, I could go online to Amazon or surf the web. A retail store that is stacked to the brim with tens of thousands of skus is an overwhelming experience and takes too much time to sift through. This was the problem with Bed Bath and Beyond. At Costco, they limit their SKUs to 4,000 high-quality, high-volume, competitively priced items, carefully curated based on the needs of the season, location and long-term trends. 2. #Consultants not #Salesmen: At REI, a delightful outdoor equipment chain in USA, every associate is an outdoor enthusiast, very knowledgeable about hiking, kayaking, biking, etc. They are not paid a commission (I think), so their focus is on ensuring you make the right choice. I hate stores where the salesperson pressures me to make a decision quickly. 3. #Experiences not #Transactions In e-commerce, the focus is on maximizing lifetime customer value as a multiple of customer acquisition cost. In physical retail, getting customers to visit regularly, stay longer, spend more, and be loyal requires a long-term view. That will come from crafting a great customer experience, even if the initial cost is high and payback takes multiple transactions. 4. #Membership over #Walkin It is no coincidence that Costco and REI are both memberships driven concepts. In Costco, you cannot even buy anything without being a member, while at REI, membership gives a huge 10% discount, paid annually. This drives loyalty and increases the frequency of transactions vs footfalls. I am sure there are many more principles, but I hope more retail outlets take these lessons and revive main streets in the USA. Photo by Clark Street Mercantile on Unsplash