The Real Disruption

adidas store

Business analysts (and commentators in general) harp on our current environment of disruption, in which entrepreneurs are harnessing unprecedented breakthroughs in technology and ubiquitous connectivity to build alternative means of consumption. Many of these ventures (Airbnb, Uber, Breather, Rover, etc.) are tied to growing consumer acceptance and preference for sharing resources, fueled by the capacity of mobile devices and their addictive impact on our behavior.
In this milieu, it it simplistic to implicate retail’s current challenges, particularly the struggles of department stores, shopping centers and certain fashion brands just to the “disruption” caused by e-commerce and related trends. Clearly, tastes and shopping habits have changed rapidly and dramatically. Discount retailers are performing quite well as are the “fast fashion” category of Zara, Uniqlo and Forever 21. Certain luxury brands’ “brick and mortar” (Gucci, Goyard, Hublot, etc.) are thriving, even as internet sales continue to rise. But department stores with a lackluster, uncurated assortment of brands and merchandise are suffering, just as historically strong fashion brands that failed to update their perennially consistent style (Ralph Lauren, Ann Taylor, MaxMara, etc.) are compelled to close poorly performing stores.

While activist investors are pushing Saks Fifth Avenue’s parent company, Hudson’s Bay, to sell the Fifth Avenue flagship store, so that upper floors might be possibly converted to luxury apartments, the department store is all over the place trying to boost lagging sales. Saks is shifting its traditional make-up floor upstairs, moving leather goods to the ground floor, installing a temporary “wellery” on the 2nd floor with pop-up cross-fit classes, spa services and athleisure displays. Meanwhile, just down the street, Adidas may have hit the mark with its year-old, engaging global flagship. The store is designed to mimic a high school sports stadium interior with professional sports trainers providing free advice, plus a floor dedicated to New York sports teams targeting tourists, who don’t appear to have stopped shopping!

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