Storefront, often called the "Airbnb of Commercial Real Estate," was recently featured in a great New Yorker article called "A Pop-Up Shop for Every Artist." The article highlighted how Storefront allows online first merchants to locate and lease short-term space to run "pop up shops." This trend, allowing online first, convenience heavy, experience light, companies to create short term physical locations, is on the rise. Everyone from Kanye West to Birchbox to Warby Parker to Everlane are getting involved. But traditional stores are also engaging in this trend to incorporate "Lean Startup" methodologies of being data-driven, and having faster feedback loops. Rather than open a new location based on historical information, and lock into the relationship for a decade, companies like Gucci are looking at pop-ups to run short tests of conversion in different geographies.
This trend to test conversion rates with A and B versions, called "A/B testing" online, was captured by Optimizely for websites. With a valuation north of a billion dollars, this is a big idea. Storefront is doing this not for the online world, but for offline, physical, commercial real estate. By allowing online and traditional offline merchants to locate, rent, and facilitate the creation of short term pop-ups, they are enabling merchants to "A/B test" in the offline world. Soon we will see stores running real time tests, and making data driven decisions on where to expand.
In New York, the legacy pricing of Fifth Avenue will fall once we realize that the wealth is concentrating in Williamsburg. In San Francisco, the Mission might yet become the Union Square, and in London, Shoreditch could soon be Knightsbridge.
For thoughts on "Lean Retail," please see my Bloomberg TV interview.