/ Shiftonomics by Branch

Is Hudson Yards Retail's Future?

It's been described as a 'city within a city.'

Hudson Yards, comprised of upper-echelon shops, condos, and Michelin starred restaurants, is a breathtaking marvel in both its scope and size. Estimated at costs around $25 billion and centered around Chelsea and Hudson Yards neighborhoods of Western Manhattan is officially the largest real estate development in the country at

One of the crown jewels of the development is the "Vessel," a multi-million dollar open air structure of interconnecting staircases and views rising above the development. The web site claims this new neighborhood as a template for future cities and a triumph of 'culture, commerce, and cuisine.'

Naturally, much of the discussion around the opening of Hudson Yards has been just how much of this is indicative of further changes in how consumers shop, and just how the personalized retail experience factors into play.

This week, we feature a number of articles that break down this groundbreaking development of Hudson Yards, and what it means for the rest of the retail industry.

🏢 Vertical Retail: New York City's Latest Retail Playground
🎱 Is Hudson Yards Retail's Future?
🗽 Inside NYC's First Coworking Spa
💪🏽 How Retailers Like Walmart Empower Employees
🗣 How IoT Is Changing Retail
🕹 Fortnite's Developer Entering Retail Business
📣 Amazon Tests Private Label Pop-Ups On Product Pages
🤠 Brick-and-Mortar Retailers Narrow Gap With Amazon
💄 Ulta, Sephora Defy Retail Expectations
🤖 How Retailers Can Adapt to Future of A.I.
🤝 Emotional Connection In Evolving Retail Landscape
🚗 The Future Of Automotive Retail [Podcast]
🤔 How Mass-Appeal Brands Are Losing Market Share To Small, Targeted, Internet-Native Brands [Long-form Read]

So, let's dive into the top stories we're reading this week about the ever-changing world of retail, work, and technology:

Hudson Yards: New York City's latest retail playground | Via: retaildive.com
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Late last week, a few days before it officially opened, a handful of retail reporters were invited to tour the seven-story, 720,000 square-foot space, which was developed by Related Cos. and Oxford Properties Group , and which features 100 stores and 25 food and beverage offerings.

It was quite a spectacle to behold. Liza Minnelli sang "New York, New York" inside the new 190,000 square foot Neiman Marcus — New York's first — which occupies the top three floors of the space.

"People call it vertical retail," said R. Webber Hudson, a Related Cos. executive vice president, as he gave reporters a tour of the space.

They'll join high-end luxury storefronts such as Cartier, Fendi, Chanel and Louis Vuitton, adding retail amenities to what has already been dubbed New York's "Biggest, Newest, Slickest gated community," by The New York Times architecture critic Michael Kimmelman.

The mall's second floor, which Hudson called the Innovator's Floor, features a selection of digitally-native brands trying out their concepts in brick-and-mortar.

Hudson Yards—hailed as retail's future—has its skeptics. Proving them wrong will take a while | Via: cnbc.com
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Proving them wrong will take a while The shops and restaurants open at Hudson Yards in New York on Friday.

There's still some skepticism that the development, anchored by department store chain Neiman Marcus, will be able to succeed.

Developers of the project cite the surrounding office community and Hudson Yards' unique tenant mix as what sets it apart from others, like Brookfield Place and Westfield World Trade Center.

Still, it will take years for the offices and residential high rises around Hudson Yards to fill up, as some buildings in the neighborhood remain under construction, causing traffic jams and the occasional chaos among commuters.

The leasing team at Related has worked, for years now, to make Hudson Yards everything a "mall of the future" should be: extra dining options in place of too much apparel retail, fitness (the biggest Equinox gym in the world will open there this summer) and e-commerce brands to lure millennial shoppers.

$6 will buy you 30 minutes inside New York’s first coworking spa | Via: fastcompany.com
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One of the more unique offerings of Hudson Yards is located up on the fourth floor, near a soon-to-be-opened observation deck. There, you'll find this most unique of new-school retail offerings: 3den -- a coworking spa.

Unlike most other coworking spaces or lounges, all of this happens on a walk-in basis: you book however long you’d like to spend on the 3den app (you can also reserve nap pods, phone booths, and showers in advance), flash your QR code at the door, and you’re in.

The Hudson Yards space can accommodate about 100 people at a time, and based on research, managers believe that 3den can host about 3,000 people per day since many people will only spend between 30 minutes and an hour and a half there.

3den has sold a host of sponsorships as well, through which brands can pay to put their products in the space.

Plus, there’s the tourists coming from the High Line and standing in line to go up to the Observation Deck, which is slated to open in late 2019.
Each space will be designed based on its location; some future 3dens, which he plans to open near transit hubs, might have more showers and a place to store luggage, while others might have days when a barber comes in to offer haircuts as part of the service.

Retail Trends Playbook Excerpt: How Retailers Like Walmart Empower Employees For Faster Service | Via: psfk.com

Top retailers like H&M, Kohl's and more are marshaling AI-enabled tools that provide in-the-moment access to key data and analytics, streamlining staff communication and optimizing customer service.

As new merchandise arrives, special offers change and inventory levels fluctuate, sales staff are required to constantly update their knowledge base from shift to shift and even hour to hour.

Given the dynamic nature of the retail environment and demands on employee time, this can prove to be a challenging task.

6 Ways IoT Is Impacting Retail Fulfillment | Via: iotforall.com
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IoT is changing the retail industry, specifically looking at the order fulfillment and logistics sub-sectors. This post covers the growth of "demand-aware" warehouses, real-time supply chain management, order fulfillment and smart stores.

There's six specific ways this is impacting retail fulfillment:

  1. Spurring the Rise of Demand-Aware Warehouses
  2. Keeping Track of How Goods Move Through the Supply Chain
  3. Sorting Warehouse Items for Shipment or Restocking Faster Than Before
  4. Maintaining Accuracy As Operations scale up
  5. Tracking Issues With Recalled Products
  6. Making Stores Smarter

Fortnite’s developer is entering the retail business | Via: economist.com
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On the PC , the market is dominated by Steam, an online store run by Valve, a reclusive American games developer.

Steam, the smaller of Epic’s targets, already has competitors, such as Good Old Games and digital stores run by big publishers such as Electronic Arts and Ubisoft.

Developers face strong incentives to sell their games there because most other developers already do so, and users like having a one-stop shop.
Besides making games, Epic sells its “Unreal” video-game engine, a prefabricated framework around which developers can construct their own products.

Later this year Epic’s Android app will offer something similar.

WSJ: Amazon tests private label pop-ups on product pages | Via: retaildive.com

A mobile pop-up ad experiment has come and gone at Amazon but it's creating a stir nevertheless: The e-commerce giant recently experimented with mobile windows offering its private label products when customers looked at the product pages for certain, similar items, the Wall Street Journal reports.

The Journal detailed how, if a shopper took to Amazon's app to find batteries, for example, a sponsored listing would appear for the Energizer brand.

When the shopper clicked on the Energizer listing, a window detailing the e-retailer's AmazonBasics alternative would pop up and would have to be dismissed by the shopper in order to complete the purchase, according to the report.

The feature was developed by Amazon's retail team rather than its advertising team, according to the Journal's report.

Brick-and-mortar retailers narrow gap with Amazon | Via: supermarketnews.com
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Amazon’s e-commerce lead is shrinking as major brick-and-mortar retailers win over more U.S. online customers for groceries and other consumer packaged goods (CPG), according to Nielsen.

Over the past two years, Walmart, Kroger and Target — along with e-grocery enabler Instacart — have far outpaced Amazon in percentage growth of online CPG purchasers, Nielsen/Rakuten Intelligence e-commerce data shows.

Between January 2017 and January 2019, the number of e-commerce buyers of grocery and other CPG products for Amazon rose 29%, compared with 207% for Walmart, 172% for Kroger and 122% for Target, Nielsen reported.

New Nielsen e-commerce data, powered by Rakuten Intelligence, shows that Amazon’s dominance in digital retail — specifically for CPG products — is slipping.

Ulta And Sephora Keep Defying The 'Retail Apocalypse' | Via: forbes.com

Last week Sephora, which already has more than 1,100 locations (free-standing and within JC Penney stores), announced plans to open 35 new stores this year.

The company expects to open roughly 75 new stores each of the next three years.

In fact, the majority of the 2,400 new stores already announced for the United States this year are in other sectors.

Below I highlight a few areas that map against some of my 8 Essentials of Remarkable Retail.

How Retailers Can Adapt To A.I. And The Future Of Shopping | Via: forbes.com

Artificial intelligence will again change the way we shop, according to EY’s FutureConsumer.

As consumers and homes become 'smart', artificial intelligence will change the way we shop

In the future, consumers will be able to outsource their unexciting purchases to bots

“Companies need to understand the big technological shifts and consumer trends that stand to radically transform their industry and business,” Rogers said.

🔈 Podcast

Podcast: Why The Of Future Automotive Retail Is About The Drive, Not The Destination | Via: psfk.com

Consumer expectations have changed when it comes to how they discover and buy products and services, increasingly demanding personalized and curated purchase and ownership experiences.

📖 Longread

What the Hell is Going On? | Via: perell.com

With a near-monopoly on television advertising, America’s biggest brands sold average products for average people in average households.
Social cohesion, at the scale of major events like I Love Lucy and The Super Bowl, was impossible without Mass Media.

The Mass Media ecosystem worked in perfect balance: television networks were intertwined with the advertisers who supported them, the products they sold, and the ways consumers bought and sold products.
Spend even more resources on advertising the new product (mostly on TV) to create consumer awareness and demand.

Now, big brands are losing share of America’s GDP pie. Small brands are like the phoenix, rising out of their ashes. Birthed by the seeds of low startup costs, infinite digital shelf space, and hyper-targeted advertising, direct-to-consumer companies with strong brand identities and hyper-efficient ad targeting are unbundling big retail brands. Options for consumers have exploded. Earlier today, I walked into CVS and counted the number of available shampoo brands. 15 brands. 4 parent companies.

Still supported by a cracking Mass Media ecosystem, big CPG brands are hanging on for dear life. Legacy advertisers, distribution channels, and the Mass Media once formed an impenetrable holy trinity. But now, that trinity rests on wobbly ground, and its parts will decompose into fossils of the Mass Media era.

Among the top 100 consumer-packaged good (CPG) brands, 90 percent experienced a decline in market share in 2015. In the past three years, over $17 billion in sales has evaporated from the 10 largest U.S. packaged-food companies. As the balance of power shifts from broadcast media to the internet, advertisements to reviews, and big brands to small ones, the post-World War II consumer brand landscape can sniff its final days.

To summarize: in the mass media age, standardized, brand-name companies, aimed at the broadest possible market, dominated the production, marketing, and distribution of products. For years they raised prices, grew revenues, and increased their advertising spend. But now, due to the internet, the mass media ecosystem weakens every day. With democratized manufacturing, unlimited shelf space, and easy-to-use advertising platforms, big mass-appeal brands are losing market share to a consortium of small, targeted, internet-native brands.

Taylor Pipes

Taylor Pipes

I write stories about people that interact with technology that solves human problems. I love exploring and finding compelling stories at the intersection of technology and the future of work.

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