Why when how what we buy
Why when how what we buy

Physical retail is 'fracked,' experience is where it's at

Jason Calacanis is the next Valley type to put a nail in the coffin for physical retail. Taking up Marc Andreesen's death knell as not all that unrealistic, Calacanis points out in his latest newsletter that any chance of survival for stores will require creating experiences.

There's much merit to that. The virtual world still cannot deliver us truly tactile or warmly social experiences. People will continue to need public or commercial spaces in which to socialize, to be entertained, and of course to experience products. And that's actually why you're more likely to see an enormous boom in restaurants and consumable outlets than just retail with coffee bars tacked on. This question is actually larger than retail. In the future, where will we go to spend time with other humans and who will we pay an 'experience' tax to do that? Is it a retailer, a restaurant, an entertainment venue, something else entirely? In effect, what's the future of the town square?


But most of retail, save for a few categories, won't stomach this high cost, high touch experiential marketing treatment. Unless you can chalk the square footage up to brand marketing dollars and show return, a retailer or brand will be hard pressed to explain the efficiency of physical spaces.  So while some very specific categories and concepts may succeed with these experiential showrooms, I'll wager that you'll also start to see your friends' everyday lives (and online presences) as the real 'showrooms' for products and brands. It's the already happening disaggregation of malls as artificial capitals of spending influence. We're returning back to social networks, media, and relationships as the real trendsetters in consumption. And that is led by product-based social networks (Pinterest), lifestyle and entertainment media, core social networks (Facebook), and mobile (imagine an app that tells your friend how they can buy that shirt you're wearing). 

So the future of retail is definitely in experiences, but think more broadly about what it really means to have, share, and take action from an experience. Experiences will be driven by those companies that are core at supporting them. Formal retail may or may not be woven into these experiences with the 'boom' that Calacanis predicts, but you better believe that purchase activity will be happening organically throughout.

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