MVRO visits New York

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MVRO visits New York

By MVRO, 20-10-2017

Introduction

When we talk about retail in the States, we usually think of Amazon, and more specifically, the Wholefoods takeover. Laurens Sloot (Professor of Retail Marketing) believed the takeover to be a smart move at the time, simply because of the fact that “no profits need to be made on the food sector and it was a way of introducing Amazon to families”, Sloot explained in De Levensmiddelenkrant. However, the number of visitors to the Wholefoods shops rose by a quarter very soon after Amazon’s takeover (Foursquare). Only time will tell whether those visitors will continue to shop there. The fact is that Amazon has a large, stable base of digital expertise and innovations, which perhaps give the company a head start compared to more traditional food retailers. Amazon recently opened an Amazon bookstore in the Time Warner Centre in New York, so has it also managed to appeal to the public, compared to those other wonderful flagship stores or real shops in Soho?

Our visit to New York focused on the centre of Manhattan, recent developments in Brooklyn, Long Island and New Jersey. Considering our travelling companions, we took in as many supermarkets and food concepts as we could, hoping, of course, to see lots of brilliant developments. As Hans van Tellingen claims in his journal of his SSM trip, New York is a breeding ground for retail and there is a particular interest in anything technical, digital or connected to the Internet, but even here, physical shops are still the overall winners. And so we noticed. We thought we’d have plenty to do with our busy programme, but later, you can read how President Trump disrupted that on Sunday.

Obviously, the superpowers are battling it out about food. Peapod (which is Ahold’s, remember) is big over there, but Amazon’s takeover meant Wholefoods has attracted 25% more visitors. Wallmart (figures via A. Snoeks) has 26% of the market share and Kroger has 10.4% compared to Ahold/Delhaize’s 4%, for instance. Supermarkets try to stand out from the competition by providing high-quality services with a huge focus on customers.

Day 1

Wholefoods (Manhattan, Brooklyn), World Trade Center, Eataly, Chelsea Market & Samsung Store

Wholefoods

We were staying close to Time Square. It was an explosion of impressions. Many tourists come here, like Shibuya Crossing in Tokyo, simply to gaze at the immense bustle of people coming and going and at the neon advertising. From Times Square, we drove to the corner of Warren Street & Greenwich Street, which is not far from the One World Trade Center. We were curious to see how Wholefoods and Amazon worked together. Would the shops be a playground for Amazon’s digital innovations, or a PR machine for other Amazon operations, as many people claim? We could see lots of promises on display outside the store: “Organic Produce That Tastes Like You Grew It Yourself.” “Highest Quality Natural & Organic” – it’s definitely all about fresh food and healthy diets here. The “fresh perception” was continued inside. The floor was unfinished cement and there were large, wooden boxes containing crates of vegetables; all the displays were full, just like on a farm. In fact, we noticed that all the branches of Wholefoods we visited looked as if they had only been open for 5 minutes. We were struck by the fact that vegetables were stacked in wall refrigerators (like they do in Sweden, in ICA and Coop too). They had placed green broccoli above orange carrots, which were under white cauliflowers. We’d be very surprised if the formula department at Wholefoods had not hired a wares specialist who sees the displays as an appealing range of colours as well as having a commercial purpose. The displays were true works of art and customers were sure to be delighted with them.

Photograph: Hans van Zevenbergen (Sizo)

In addition, Wholefoods pays ample attention to the store’s use of materials, which create a peaceful framework of traditional materials and colours. Refrigeration sections have a vintage look (in some cases, they actually are vintage, considering the huge amount of condensation) and wall refrigerators have wooden details on top, but no more than that.  It means that the eye is immediately drawn to the discount furniture, which is noticeable due to both the shape and the finish. Here, Wholefoods had used a standard Omar kitchen unit from IKEA, with a home-made shelf, all done with a hammer-finish look & feel. It’s cheap and effective, almost ingenious. Another thing we noticed, in addition to the use of materials, was the consistency of the in-store communication, which we saw in all the stores. There was a clear distinction between “markdowns” and “recommendations” and a good balance between being able to find products (assortment navigation) and information about the products without any loud “story telling”. A story-telling approach to products isn’t new, but the layered structure is very nice here and in fact it started outside the store. We left the store feeling happy and even more inquisitive about the other Wholefoods markets. Would we see the same quality in the other stores?

Photograph: Hans van Zevenbergen (Sizo)

Eataly & Westfield Center

Although our group mainly consisted of international food retailers, we managed to persuade them to visit Oculus – Westfield World Trade Center, the building project whose contract extras exceed the original budget of 2 billion dollars by … 2 billion. We have the Noord/Zuid Lijn; the Americans have the Westfield.  If we disregard the aesthetics of its beauty, its main function as a railway station and shopping centre, there is not much to do. Kate Spade, Sam Edelman, Breitling, even Other Stories (H&M) are here, all with spacious shops. We are familiar with those brands from slightly posher shopping centres in other places in the US and Europe. The target group of this shopping centre is obvious – just like the remaining shopping centres in Manhattan – because the price of living and of housing is sky-high. Our food men and women soon longed for something lusher, so we quickly headed to Eataly, located just around the corner. We had been to Eataly in Munich and Stockholm with the same group previously, so it was sure to be a success. Eataly now has a presence on almost every continent and 2 shops in New York. Eataly is about community, the ideals of Italy concerning good, fresh food and about togetherness. They are wonderful places, which could have been taken from a scene in an old Italian film (like Amarcord by Federico Fellini). Eataly is about refinement. And although the scenery is perfect – the tables and chairs are of a very high quality, the crystal glassware is exceptionally good, the marble bars and doors with brass inlays look lovely – you would almost believe it was Italian, but the average authentic Italian restaurant does very little to enhance its interior; however, the staff is usually friendly. That’s what was lacking here, just as in Stockholm, Munich and who knows where. The staff were arrogant and much too brusque while in the Netherlands, everyone’s saying that more money should be spent on good, friendly staff rather than just on beautiful flooring, lamps and façades – well, we certainly concur. Could that be the reason for the chain’s disappointing global results, or are they due to the pressure of the gigantic investments made per square metre? Nonetheless, Eataly founder Oscar Farinetti announced last year in Retailtrends that the chain is to open a branch in the Netherlands in 2018. Well, they had better do something about their staff: after all, in the Netherlands, we don’t really have a “dining culture”. If they want that to change, they will at least need a concept where people can enjoy themselves; it’s not all about good food and doors with brass inlays.

Photograph: Hans van Zevenbergen (Sizo)

Chelsea Market

We needed some lunch too. It was time to head towards the tourist attraction Chelsea Market in that other favourite, the Meatpacking District. 30 years ago, this district was a backdrop for gangs, shady figures and that sort of thing but things started to change 18 years ago with the arrival of trendy street-food bars. Chelsea Market is also the stop for the popular High-Line, a city park laid out on an unused railway for goods trains. As we crossed Chelsea Market, we noticed several features it shared with Amsterdam’s Foodhallen. We remembered that while New York and a lot of other cities in Europe have dining cultures, we don’t have such a culture in the Netherlands, although Fenix Factory Rotterdam is perhaps an example, or those food truck festivals which you see more and more often in some towns. We hope that these eating trends continue to develop in the Netherlands. Chelsea Market sells good food for a good price and there’s plenty of diversity. Luckily, the curry houses, Thai food sellers and shellfish restaurants are just as full as the pizzerias and hamburger places. We had a meal at Chelsea Thai for a reasonable price – in New York terms – as it came to under $12.50, including a bottle of cold water, which we really, really needed.

Samsung Flagship Store & Warby Parker

We left Chelsea Market, but we couldn’t leave the Meatpacking District without a visit to Samsung’s new flagship store. Of course, Apple were the first to set this trend – getting rid of the cash desks, focusing on interaction – but Samsung followed and raised it to new heights. I’m not actually saying better heights, but definitely new heights. I’m not going use the words “experience” or “sensation” either, but Samsung is certainly investing in entertainment. And everything is in English, so it sounds better. Entertainment for brand appreciation. Samsung’s product range is larger than that of Apple and it’s certainly no less ambitious. It’s obvious that the stores are investing heavily in building and maintaining fan bases and they have done literally everything possible to achieve that. Full HD video-wall screens with direct-lit background lighting and Touch-Content, with music and scents – that’s how we choose a new fridge in 2017. The store’s features range from an arena seating 250 for events and concerts to a Galaxy Virtual Ride Zone where you can surf virtual waves or shoot down aliens from outer space from your Galaxy Ride. Why? Because it’s fun, as The Verge wrote in February when Samsung opened its new store that is not actually a store – after all, who needs a store in 2017?

Slightly nauseous after our holistic space war in the Galaxy Virtual Ride, we went outside for some fresh air. Although, after this feast, everyone was looking forward to seeing Nike’s and Adidas’s showpieces and all the rest that were still on our list, we took the opportunity to let the group go for a while. We could hardly wait to see Warby Parker. Why? Because we believe that it is a prime example of a sector (opticians) in which lots of existing (local, smaller) players are in trouble in the Netherlands, in which the existing branch chains are rapidly expanding (e.g. Specsavers, EyeWish) and in which there are plenty of newcomers. Shops spring to mind like Ace & Tate (online, but now have several branches) or Mr Browns Specs & Beans in the Netherlands, a local hero of which we wouldn’t be surprised to hear that they are opening more branches soon. Then there are the newcomers from abroad, like Nowdays. Well, anyway, Warby Parker. They are straightforward shops (approx. 45 in the US) but have an “iconic” design and staff that are clearly present. Consumers look for shops and brands that are extensions of their own identities, as you can read in Tom Kikkert’s blog, for instance. Warby is aware of that and applies it. Here, it’s not just the design: the staff wear stylish corporate uniforms too. After all, who wants advice on a fashionable frame from a frumpy salesman? It’s not just that though: it’s the combination of the music, the scent and the use of greenery in the shop. Then there’s the packaging, which they call “the Joy of Unpacking”. Not every Warby Parker store is the same, so their distinctive image can grow. Glasses are no longer bought once every 4years, but every year, or every season – and perhaps 2 pairs at a time! “We are all individual”. Pepsi and Apple excel at appealing to identity. The starting price for a frame is cheap. The delivery is quick, and you can try out up to 5 frames for free. Sometimes, there are concepts in New York (and other cities) that are well worth a visit and will help you improve your own business. Retail businesses that are in trouble should get out more because there’s plenty of inspiration to be found in Munich, Stockholm, London, Manchester and Paris.

Photograph: Hans van Zevenbergen (Sizo)

End of Part 1. In the next and final part, you can read how Eef Luchies continued his retail exploration of New York City, visiting Grand Central Station Food Plaza, the Nike and Adidas flagship stores and a huge Wegmans store.