The number of shopping mall visits has steadily declined since 2010, and along with it the total number of shopping malls. The number of brick-and-mortar clothing stores has declined as consumer spending has shifted away from clothing and toward experiences like eating out and traveling. (In fact, clothing spending as a portion of total consumer spending has declined by 20 percent in the past 20 years.)
All of which creates an opportunity, that one Free Market, a curated, shapeshifting retail experience that recently opened in Denver (and will soon open in Los Angeles), hopes to seize.
Free Market is the brainchild of Raan and Lindsay Parton and Paolo Carini, the partners behind the menswear label Apolis, Alchemy Works multibrand retail outlets, and Spring Place shared workspaces and social clubs.
Unlike traditional malls or retail hubs, Free Market allows brands to create a flagship store, showroom, or event space, and for as long or little time as they like -- and not only provides support on design and build-out but also for marketing, events, and even staffing.
The goal is to provide a better experience for consumers -- and, just as important, for brands and landlords.
(To keep things simple, I've combined comments from Lindsay, Raan, and Paolo, which was made even easier by the fact that, as great partners often do, they tend to finish each other's thoughts.)
Increasingly, the retail "experience" has to mean more than offering goods for sale. You have to give me a reason to want to come to a brick-and-mortar location in the first place.
We've been in retail for more than 15 years, and over time we started to focus on the hospitality element of a space. In one case, we partnered with an operator to have a small coffee counter. Nothing revolutionary, but just noticed that people would be there five or six days a week.
Retail is synergistic with food and beverage. The synergy of different categories is extremely complementary; think stop and shop.
Keep in mind offering a variety of categories and experiences isn't revolutionary. The original bazaars were like that.
We have strong backgrounds in retail. Paolo has an extremely strong background in commercial real estate and development from working in Milan for a large retail development group. Our collective experiences led us to explore this cross-category format. And now we have an 11,000-square-foot historical building in downtown Denver and we're opening a second location in a 28,000-square-foot facility in Playa Vista, next to the L.A. Google campus.
All of which makes sense but doesn't automatically mean attracting brands is easy.
That's why, on the one hand, we're tenant-focused. The brands working with us in Denver are performance based: They don't pay any rent other than a percentage of their sales.
Which is a better approach for a new brand that doesn't have the resources to spend on leases, build-outs, etc.
As we've talked to entrepreneurs, one thing that constantly comes up is that the traditional department store isn't aligned with the young entrepreneur: They're asking independent startups to finance their business for 60 days.
Our goal is to shift the model to be more like a Chamber of Commerce than a department store so that the interests of the landlords and brands can come together through our infrastructure and under our roof.
Do that right, and everyone can celebrate each other's successes.
For example, say you pair an independent restaurant group with a national brand like Warby Parker: That creates a level of marketing reach the restaurant can rarely achieve on its own.
But not every brand is going to see that. Or every landlord.
The synergies truly matter. A flower shop with a small footprint as far as gross income goes can still provide a level of energy that benefits a big brand.
Keep in mind we're not only the operator of the market but we're also a tenant. So because we've built a lot of goodwill and relationships with like-minded brands, when we say we have skin in the game on multiple levels, it sparks a lot of confidence.
Because of the way the model is structured, we have a vested interest in everyone's success.
And, of course, Denver is a great option for a number of brands. Many startup retailers have no real presence outside the East or West Coast. It's a good opportunity for them to step into a co-tenancy and leverage the brand power of like-minded businesses.
But if I own a building, historically my goal is to lock tenants into long-term leases. That's my definition of success.
That relationship has long been misaligned. If you're a brand looking to open a location in a secondary market, the negotiation has almost always been adversarial. If the store didn't go well, you had potentially signed your business's life away. Plus, many entrepreneurs didn't realize what they were getting into: where their responsibility stopped and started from a build-out perspective, from an infrastructure perspective ...
We can be a shield on that side, but, more important, an intermediary that programs events every day, that works hard to drive the traffic. The landlord can benefit from the partnership. Since it's performance based, what they net out can be much higher than market rent.
When you're looking for businesses to add to the lineup, what do you consider an ideal brand?
Knowing how noisy the market is, we focus on brands that have strong internal values and simultaneously create a lot of value for their customers. They're environmentally or socially responsible, they have strong values from that perspective, but they also create a lot of value with what they provide.
That means we're not looking for "traditional" luxury brands where a product is expensive for no other reason than it's expensive.
We look for brands focused on craft and artistry and that are very community-engaged; that's a fundamental piece of the puzzle. When brands bring their own independent communities to the larger community in Denver, it dramatically increases the awareness of not just that brand but all the other brands.
All the brands have flexible terms, and they essentially have a shop ready to be operated: They just need to bring the products that create the energy, the vibe, and the value for their customers.
Since experiences are just as important to people as things, vibe and energy are everything.
The sum of countless small optimizations is what makes an experience. It's hard to put your finger on, but when you get it right, people think, "It feels really good here." It feels inclusive.
That means taking a more "residential" approach to the space, more like it's a house where you can host an event as opposed to a rigid commercial space.
It's fun to have taken a "build it and they will come" approach and see it pay off, but it's even more fun to say yes to what people want to do. If someone wants to hold a birthday dinner down the center of the space for 50 people, we can say, "Yep: We've got you." That's unheard of in retail stores.
Or take Beautycounter: It has a network of consultants around the country, so it hosts events in the space outside of our operational hours. It's booked out through February of next year.
The brands have taken the concept and run with it.
To be able to say yes to those things means we're creating a format relevant for how life is lived today. Not siloed. Not compartmentalized. Business, lifestyle -- they blend together.
The sum of the parts really is greater than the whole.