NRF 2014 opener: Retail stores 'meet a human need, not just a commercial one'

Jan. 13, 2014 | by James Bickers
NRF 2014 opener: Retail stores 'meet a human need, not just a commercial one'

NEW YORK — The opening keynote at this year's National Retail Federation Big Show began not with a photo of a smartphone or a website or any other technology, but with a photo of a 17,000-year-old cave painting.

In the session "Reimagining Main Street," Rick Caruso, founder and CEO of retail developer Caruso Affiliated, focused on the evolutionary background of retail and the human need to socialize, and talked at length about how retailers need to return their focus to it.

"We are living in a moment of great change, and it's easy to get distracted by the relentless conversation of Internet vs. brick and mortar," he said. "But now more than ever, we need to focus on what has always been and will always be essential to our customer: creating an experience that is magical. Creating an experience that is memorable."

Caruso showed photos from the caves of Lascaux, located in southwestern France and home to some of the most famous and well-preserved examples of Paleolithic artwork. He said that the paintings were emblematic of a time when things were going well enough (from a survival standpoint) that people took the time to sit around a fire, tell stories, and preserve them.

"Humans have an innate sense of wanting to come together," he said, citing other examples of places where human happiness and retail have intersected, from the Champs-Élysées to Michigan Avenue to a thousand-year old market in Marrakesh. These places, he said, "meet a human need, not just a commercial one."

In 1950, he pointed out, fewer than 10 percent of American households were just 1 person. Today, more than 25 percent are. And 40 percent of Americans report that they are lonely. "People's lives are increasingly lacking in real human interaction," he said. "We are undoubtedly connected electronically, but emotionally, not so much … in many ways, a teenager sitting around the fire in the caves of Lascaux is more connected than a teenager today sitting around text messaging."

Caruso is passionate about beautifully designed and executed retail, and that manifests itself in the properties of Caruso Affiliated, one of the largest privately held real estate firms in the country. His company's notable properties include the open-air malls The Grove at Farmers Market in Los Angeles, and Glendale, Calif.'s Americana at Brand. According to Caruso, they are two of the top 15 retail centers in the world based on sales volume.

He's not optimistic about the future of the traditional, enclosed shopping mall, which he said has "outlived its usefulness" and will within 15 years be "a complete historical anachronism" unless it is reinvented. (When asked to elaborate on this, he pointed out that there hasn't been a newly constructed enclosed mall in the United States since 2006.)

What has worked for him instead is a focus on architecture, mature landscaping, features like fountains, and an emphasis on great customer service.

"The fact is, I'm in a commodity business," he said. "What's sold at my property is sold at hundreds of other properties nearby. We don't design our properties for people to shop — never have — but for people to enjoy. And when people feel good, they do shop, and they spend more. These places mimic the natural habits of human behavior. We try to put people into social situations that are organic, that have been there since the beginning of time."

Because of his focus on the real-world things that people can't get online — a casual stroll on a nice day, a cup of coffee with friends — he's not worried about online competition.

"Conventional wisdom holds that online retail is a threat, that people will go showrooming," he said. "A year ago analysts were saying that Best Buy was becoming little more than a testing ground for Amazon customers." Today Best Buy is promoting itself as a showroom, he noted, saying they have put strategies in place to convert showroomers into buyers.

He closed with a return to his cave analogy, telling the story of a friend's favorite masseuse, who transforms a tiny room into a grand escape simply by playing the right music and setting the right atmosphere. It's the same thing Starbucks does, he said, with their experience. Both the masseuse and the coffee giant have built a fire, and invited people to feel comfortable around it.

"If you're in the brick and mortar business, you must also be in the hospitality business. Create your own campfire and invite your guests to sit around. A website can't do that," he said. "Embrace your advantage, which itself is so disruptive to the technology that thinks it is disruptive to you."

Topics: Customer Experience, Customer Service, Store Design & Layout

Companies: National Retail Federation

James Bickers
James Bickers is the former senior editor of Retail Customer Experience, and also manages webinars for Networld Media Group. He has more than 20 years experience as a journalist and innovative content strategist, with publication credits in national, international and regional publications. wwwView James Bickers's profile on LinkedIn

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