It\’s hard to sit on the sidelines and read the dialogue about Hudson Yards and the recent Wall Street Journal story about declining traffic to the American Mall. I am delighted that the prescriptive solution of \”adding to the experience\” is finally getting debunked. Pixie Dust is not going to solve the problems of your local American shopping mall. Outside of the USA, the mall is doing just fine. Mostly because no one thinks MALL, they think ALL.

Convenience remains the driving force in modern consumption. Most of the world is more time poor than money poor. While the face of the world of consumption is changing, the body of the monster is intact. We eat, drink, clothe our children, enjoy vacations and recreate regularly. Our problem is that our shopping institutions are not evolving as fast as we are.

Mall Models

The American mall has never been a complete solution. No supermarket, no drug store, no locksmith, no doctor\’s offices, no gym, no daycare center, no library, no schools or public offices, no churches, and no housing, offices, much less hotels or god forbid, public transportation access. Shopping needs to connect with working and living.

Go to Japan, Sweden, Brazil and the All Mall is thriving. At Tokyo Midtown in Roppongi, the rents for housing and office space above the mall are higher because the convenience of a high-end supermarket on the bottom floor. Think about the Time Warner Center in New York City where a resident can shop Whole Foods in their bedroom slippers if they want to. For empty nesters migrating to New York City from their former family homes in Westchester, their choice of housing is strongly influenced by convenience of key services. How many snowbirds leave their New England or Midwestern homes in search of an easier life, and wake up one morning in the steamy heat of a south Florida summer missing their children, friends and familiar institutions. They might happily move back to their home towns – if they had an easy place to live. No snow to shovel, a covered garage, an easy supermarket to walk to, and a least a few services. That sunny apartment over the mall close to their old home might be the perfect solution. Florida is great four months a year, but the rest of the time we\’d rather be in Michigan.

Convenience Transcends Location

The mall\’s reinvention isn\’t just about housing. At Brookfield Place in Battery Park City, the office leasing brokers are talking about how the presence of a good mall, a great food court, movie theaters, a very elegant grocery store and easy access to both the subway and PATH affects the happiness of workers and thus the prosperity of tenant companies. Good for them. Leasing is a getting to a more creative place. Someone\’s willingness to, and happiness about putting in long hours is about the convenience of easily getting to and from work – but also what they can do along the way. If you work in Battery Park City, much less live there, putting in long hours is just easier surrounded by all the services and luxuries you could dream of.

Shopping Tourism

Tourism and shopping are 21st-century partners. Again, it is easy to point to off-shore examples of places that do it well. Look at Hudson Yards through Parisian eyes and ask some simple questions through the lens of the off-shore visitor. If English is not your primary language can you read the directional signage? At the restaurants, can you ask for the menu in Spanish, Portuguese, or Chinese? Are personal shopping services for tourists offered, or delivery available to the surrounding hotels? Is the mall showcased in the travel guides? What are the visiting children doing or being offered by the mall?? The answer to most of those questions is no. Shame on us.

Icarus Rising

American shopping companies are facing some very real and tough decisions. The transformation of aging property into a new ALL MALL takes time and money. Look at the surrounding landscape of crumbling parking asphalt and envision instead covered parking, high rise office and residential towers and interconnected, integrated big box stores. The time frame of planning, disruptive construction and repositioning is a minimum of three years. In an industry under pressure to deliver quarterly results to Wall Street and shareholders – that three years is a daunting transformation with the expenditure of piles of money and no guaranteed success on the other side. But it is the pathway to survival.

We need a better mix of public and private money, and that takes a level of sophistication and vision. For us in New York City, the shift in gravity from the Upper East Side to the Lower West Side started with Battery Park City. Amanda Burden, former Director of Urban Planning, William Whyte and others in the enlightened NYC planning community pulled off Battery Park City over a 20-year period. How come the world is so happy there, and not so pleased with what is happening a little farther upriver? In the latter case, form follows no function.

The legal cannabis business is opening up new doors for recreation as well as the healthcare industry. Just below the retail radar screen of Walmart and Target\’s quarterly performance and Amazon hitting a trillion is the booming legal cannabis industry. Expanding east from Alaska, Washington State, Oregon and Colorado, it\’s now legal in many other U.S. states. Reaching from Uruguay, Canada, Israel and Australia, it\’s also now legal in many other countries. We\’re entering a powerful emerging global retail market.

Good Chemistry

If you came of age in the 60s, pot had a THC content well under 10 percent. Times have changed. The THC content today ranges from 20 percent to 27 percent. It is much stronger and curated for its enhanced high effect. Think of the difference in sophistication between Medieval mead and over-proofed spirits. But this market is not guided simply by Reefer Madness; THC is not the only active ingredient or cannabinoid in the plant. Marijuana contains Cannabidiol (CBD), a well-proven and effective antidote to a broad series of medical conditions including; chronic pain, anxiety and inflammation.

A Brief History

Let\’s take a brief step back into the recent history of cannabis. The legal cannabis business has two roots: recreational and medicinal. The first dates back some 30+ years to the decriminalization of marijuana in The Netherlands. Some of us nostalgically remember our first pilgrimage to The Bulldog in Amsterdam where one sat in a discrete corner with offerings of pre-rolled joints and mixes of hashish and tobacco. It was magical and a little frightening that something we had been trained to hide had come out into the open. What unfolded for the Dutch then (and still now) is the flagrant openness of where and when it is consumed. Plus, the country never officially regulated the product and to this day, cannabis is not officially \”from anywhere\” and it could contain a blend of almost anything.

The second root was the acceptance of CBD as a legitimate and valuable medical aid which resulted in the mass opening of cannabis legal dispensaries. These dispensaries vary in retail sophistication. Product has been dispensed with legitimate medical supervision, but also with ad-hoc New Age advice. The novices say, \”Tell me your problem and I\’ll get you to the right strain.\”

Healing Properties

Medical cannabis is legitimized by the medical profession as well as by lay people who have demonstrated great outcomes. For example, I have two good male friends, both in their sixties, who swear by medical cannabis; one a therapist and the other a distinguished political writer with a book on the Amazon top-ten list. Both use what has become a popular delivery system of choice-a battery-operated vaporizer that delivers measured dosages. One fellow is an aging, mellow person taking a happy drug before riding his big motorcycle. As a family therapist, he dispenses calm. The other is an influencer on the world stage relying on a calming effect that gives him perspective and lets him sleep at night.

For U.S. dispensaries, a local supply of product was essential. In the face of legal restrictions, it was cheaper, easier and faster to produce and sell locally. As for commercial purposes, initial regulations in Colorado – the product is grown, processed and sold locally. Based on the mainstreaming of cannabis, drug smuggling of cannabis has been seriously reduced. The medical applications have served to industrialize production, which greatly benefited from plant scientists interested in improving the efficacy, potency and application of the plant.

In Store

What are the cannabis retail applications? Today, a medical cannabis dispensary is half pharmacy and half jewelry store. Based on the state and location, the definition of \”medical\” varies. I\’ve seen both white lab-jacketed employees fulfilling prescriptions and hipster budtenders telling you which strain and delivery system will alleviate what symptoms or conditions. For everyone whose pain and discomfort has been greatly alleviated, the crossover to recreational dependence is unavoidable. Like so much of modern retail, we need clear and transparent point-of-sale materials that educate. For example, look at the marketing history of selecting the right mobile phone, how to use this skin crème correctly and what gluten-free really means.

The cannabis stores I\’ve visited tend to be standalone, class-three retail locations. Mainstream landlords are not yet comfortable with cannabis tenants. The look and feel of the store-even in locations across the street from each other-can be very different. One driving factor is security. Another is convenience. Although legal in many states, cannabis is essentially still a cash-based business. Because U.S. financial institutions are required to comply with stringent anti-money laundering statutes, banks at present are refusing to work with cannabis retailers. This creates problems, in particular, for retailers needing to clear credit card purchases through normal banking channels.

Another of my friends, Seth Adler, hosts Cannabis Economy, a podcast that he describes as \”a real-time history of legal cannabis.\” I\’ve been a guest on the program and so has Former U.S. Deputy Attorney General James M. Cole who authored the Cole Memos-the federal guidance documents from the Obama administration for U.S. attorneys on how to prioritize the federal criminality of state legal cannabis.

Just as California legalized adult-use cannabis, current attorney general Jeff Sessions rescinded the Cole Memos. In concert with the third of the Cole Memos came FinCEN (U.S. Treasury Financial Crimes Enforcement Network) guidance that outlined how financial institutions can legally bank cannabis. Although big banks never acted on that guidance during the Obama Administration, and even though the current Justice Department rescinded those Cole Memos, the current Treasury Department didn\’t rescind the FinCEN guidance. So what does that all mean for cannabis retail now?

This is one business that fuels the grey and black economies. The typical transaction is over 40 dollars. Behind the glass casements and wall displays is serious security. Unlike the jewelry business whose relationship to both law enforcement and the insurance industry is well defined, the cannabis industry at every stage-production, processing and sale-sits in a yet-to-be-defined nexus.

Showcasing

Like a jewelry store, the product and accessories are displayed in glass vitrines. Up top, accessories from pipes and delivery devices to storage are typically displayed. What has exploded is all of the non-smoking products in which active ingredients are packaged: lollipops, gummy bears, chocolate teas, and beverages.

In states where dispensaries came first and recreational followed, like Oregon, the migration from \”feeling better\” to \”feeling good\” is visible on the merchandising and in the operating culture. Imagine, if you will, the sales staff in a liquor store reviewing with you the difference in the alcohol high between bourbons and scotches, much less mescal. It\’s difficult for the traditional retail shopper and non-cannabis consumer to understand these nuances. There is medical efficacy in this plant. And that\’s why clever marketing approaches are not relevant or appropriate. Nevertheless, cannabis product has been given pop culture names to characterize its effect. Jack Kerouac and Aldus Huxley branding seems a stretch considering the serious medicinal value of cannabis. The industry is trying to define itself as it catches up to the properties of the cannabis plant.

Ramping Up

Albeit in a current state of constant flux, the cannabis industry is here to stay. In North America it will reach $50 billion in revenue in the next three years. While I have no objection to legalization, aspects of the emerging industry concern me, from impaired driving and judgment to the reported unwitting consumption of doctored candy and beverages. Let\’s put it on our radar screen and do what the industry\’s own advocates suggest-regulate cannabis like alcohol. What we sell and how we sell it deserves professional attention.

NRF President and CEO Matthew Shay recently published an article on LinkedIn entitled, The 3 Worst Articles on the Retail Apocalypse – And Why They’re Wrong. While I run the risk of biblical-sized smiting from the gods of the retail establishment, I cannot hold my tongue on this one. Shay’s post could not be more tone-deaf. His article strikes the exact wrong tone at the exact time we need him most. Consider this your wake-up call, Matthew Shay and NRF. That sound you hear? It’s your iPhone ringing at the side of your bed telling you it is time to start leading differently.

Shay’s Position

Read Shay’s piece for yourself. You decide. Am I just prone to hyperbole? Or, is it right to expect more of our leaders?

Shay’s position in the piece is simple. First, he argues that the “Retail Apocalypse” is overstated, that retail is thriving and coming off its best holiday in years, and that people writing “false narratives” need to be better informed. Second, he then singles out his three biggest “offenders” and the writers of such narratives from the past year and discusses, tritely, where they “went wrong.”

In order: Shay first blasts The Atlantic for saying online shopping and the rise of Amazon could be bad for retail because, to him, online retail is retail. Then Shay says that Business Insider’s claim that a large proportion of American malls and mall anchor tenants are in a tough spot is invalid because a published report by IHL claims retailers actually opened more stores than they closed in 2017. And finally, he singles out Bloomberg, saying their evaluation of retail debt levels and the potential impact of retail bankruptcies on American jobs is unwarranted because of his tangential assertion that the Bureau of Labor Statistics “only counts in-store positions as retail.”

Talk about a classic case of misdirection. You might even cite this as fake facts: deflecting attention to things that are true but, when one digs deeper, really have nothing to do with the actual points being made. It may be a great PR strategy, but just saying someone is wrong does not make a person right either.

That’s flawed logic.

Missing the Nuance

The problem with Shay’s arguments, aside from engaging in his passive-aggressive discussion on LinkedIn, is that he is missing the nuance of what people are trying to tell him – hell, even what I tried to relay in my NRF 2018 recap this past January – namely, that change is coming and that NRF, as our national organization, needs to work with the change and not against it.

Shay is right that retail is not in an apocalypse. The apocalypse metaphor has been sensationally overused. I even went on record at the recent CUE4 conference in Minneapolis, saying we are in more of a reformation than an apocalypse. Our new age consumers are playing the role of Martin Luther, nailing their collective 95 theses on the doors of our hallowed retail institutions.

While retail is healthy and thriving at the top level, there are some real structural issues hidden below the surface that our retail leaders need to address, making today’s argument an argument about leadership, not about who is right or wrong. Leadership requires seeing the nuances. In my opinion, Shay’s piece is short on nuance and long on “fake news.” As I said, this is a leadership issue.

The Unfiltered Facts

I go so far as to call Shay’s piece “fake news,” partly because the retail apocalypse has become a cliché and also because, at the end of the day, none of his points really make a difference in helping those in the industry find solace and comfort in what lies ahead. We need Shay to lead into the future.

I don’t have all the answers either. The immediate situation we face is tough. I suggest it is not going to be solved by saying who is right or wrong. We need dialogue. So, I am not going to spout statistics, cite research reports, etc. that can be used and manipulated in various directions. Instead, I am going to highlight key conceptual truths. These truths are leading indicators that alert us to the likely disruptive change, that is coming our industry’s way.

1. E-commerce continues to steal share
2. Stores are closing and retailers are trying to get smaller (using total store openings and closures as a mark of “health” is fallacious)
3. Further technological innovations – namely visual search, chat bots, voice activation, augmented reality, and process automation – are already here
4. Alibaba looms large

This is not a time to bury our heads in the sand, however tempting that may be.

Scenario play with me then for a moment. Play out these truths. What do they mean and what could be the results?

• First, if e-commerce continues to steal share – then worse case it likely will mean fewer overall retail jobs (however, you want to classify them) and best case, it will mean jobs in different locales from where brick-and-mortar installations exist today.
• Second, if retailers are getting smaller (even if total store counts remain neutral) chances are those stores will still employ fewer people.
• Third, if technological innovation continues at its fast pace – then each of the above-mentioned technologies will mean less need for people and less need for storefronts.
• Fourth, if China’s retail technology backbone is thriving – then why should retail be any different from any other industries that have gone before it? Is it not possible that retail, by way of technology, could one day migrate overseas? Future retail could indeed continue to thrive at the top line, fueled by e-commerce, but powered by a technological platform controlled and dominated by Seattle and overseas corporations, like Alibaba, too.

Future Shock

But maybe we want Shay to be right. Maybe we should just myopically believe, like the captain of the Titanic, that we are immune to disruption. Maybe we should have our heads in the sand.

Net/net, no matter how one slices it, it is hard not to envision a world where fewer people are employed in retail and where the entry-level technological qualifications for any remaining retail jobs are higher than ever before. Retail’s future may indeed still be bright, but it will not be bright for traditional retail employees.

Which begs the questions: How are we, as an industry, identifying our next generation of employees? Do our leaders have the skills to hire a new wave of retail engineers? And then, do we have a responsibility to train our displaced workers? Who are the leaders helping retailers navigate the sea of technological decision-making they need to survive in the future? And even more to the point, who is encouraging small-business ventures in the face of VC-funded long-tail irrationality? This is why we need vision and leadership.

These are the narratives that need to be welcomed and discussed from your pulpit, Mr. Shay. You may say in your piece that you have shared them already, but, candidly, your messages are not getting through. It is time to stay above the critiques, stay out of the semantics and, most importantly, to lead.

I personally challenge Shay and the entire NRF machine to address these concerns and lead the industry into the future with forward-thinking strategies and deployment of resources to make significant structural and existential changes to the industry.

Open the dialogue and encourage debate for the sake of co-creation. Paint a picture, a vision of the future that helps us all get to a better place. Tell us that you hear us and tell us everything you are doing about it. And never rest until you have paved a path to a sustainable future.

At a much-anticipated show in New York in February, models sashayed down the runway in loose-fitting dresses made of opulent textiles adorned with jeweled trims and accessories.

Was it a Marrakesh-inspired collection of evening gowns in homage to Yves Saint Laurent? No, it was the New York Fashion Week debut of Vivi Zubedi, an Indonesian designer whose styles are all abayas, or loose robe-like dresses worn by women in parts of the Muslim world.

Modesty is having a fashion moment. Skimpy, tight-fitting clothing that leaves nothing to the imagination–a traditional sign of female liberation–is being replaced by high necklines, covered arms, wide-leg pants, and long dresses.

By almost anyone’s standards, modest fashion is a market on the rise, in part due to an increasing number of millennial Muslim women—or Generation M—who have larger amounts of disposable income, thanks to their new positions in the workplace rather than the home.

Modesty’s Religious Roots

The seeds of this movement were actually sown several years ago. In 2015 DKNY was among the first American brands to launch collections of hijabs and abayas, followed by Oscar De La Renta, and Dolce and Gabana the following year. At London Fashion Week in 2016, Indonesian designer Anniesa Hasibuan made history when she presented a collection where every model (all of whom were immigrants) wore a hijab on the runway. The use of ecommerce and social media has had a huge influence on the movement, as over 50 percent of the global Muslim population is younger than 25 years old, creating this demand for fashion online. Nike’s release of fashionable workout hijabs earlier this year was one of the most widely publicized indicators of the rise of religious influence on the fashion industry. It was a sign of female empowerment, and a necessary option for athletic women of the Muslim faith.

Big names like H&M and Mango have released modest clothing that appeals to this segment of the consumer market. British designer Hana Tajima released a modest fashion collection at Uniqlo, and the spring/summer 2018 collection using the company’s intricately designed fabrics includes floor-length dresses, high-waisted pants, and headbands under a scarf. Macy’s recently launched the Verona Collection, a brand from The Workshop, which is the company’s minority and women-owned business development program. With prices that range from $12.95 to $84.95, the line will feature cardigans, tops, dresses, pants, and hijabs. London-based RUH Collective is an elevated basics brand that produces clothing made of high-quality fabrics that does not cling to the body. It offers a home try-on Option and Everlane-like pricing transparency.

According to Reuters “State of the Global Islamic Economy Report,” and cited by Forbes, Muslim consumer spending on clothing is set to rise to $368 billion worldwide by 2021, a 51 percent increase from 2015 figures. This market is hard to ignore, as large companies must cater to this group, as well as to the other religious and cultural groups that abide by modest fashion rules and guidelines.

The e-tailer The Modist was launched in the spring of 2017. Hailed as the “Net-a-Porter” of modest fashion, the nondenominational site offers curated modest pieces from a continuously expanding group of luxury designers from Mary Kantrantzou and Marc Jacobs to Christopher Kane and Phillip Lim. Although many of its pieces are originals, The Modist has been known to ask designers to alter pieces to cater to their modest customers. Before founding the site, CEO Ghizlan Guenez worked in finance for many years, some of them in Dubai, and had trouble finding fashionable clothing even in the more-liberal United Arab Emirates. The business has reportedly grown rapidly, and now ships to over 120 countries.

Another success story is ModLi, a modest fashion marketplace that sources from hundreds of fashion boutiques. Not only does ModLi sell clothing that embodies modest standards, but it also showcases influencers from many different cultural and religious backgrounds who do the same on blogs and social media.

Other style icons have risen in the field, like Melbourne-based blogger Zulfiye Tufa, who calls herself The Hijab Stylist, with around 45,000 followers. She launched ModMarkit.com, which is a Poshmark-like app for modest fashion clothing.

Non-Denominational

Other religions have also contributed to the rise of modest fashion. Influencer Liz Roy (@downtowndemure) describes herself as: “Just a Christian chick from LA who <3’s [loves] modest + ethical fashion.” She’s been featured in the New York Times, People, Redbook, and Racked, and has 22,500 followers. Not only does Liz post her modest outfits, she also makes sure one-third of her posts are motivational quotes from powerful women like Oprah Winfrey and Malala. Liz, who is African-American, posts hashtags like #blackgirlmagic, and occasionally wears special pieces like a colorful blue skirt handmade by a seamstress in West Africa. She is motivated by both her devout Christianity and a desire to show the world that modest does not mean frumpy.

According to Bustle, fashion historian Daniel Cole sees the rise of modesty in fashion as part of the pendulum of cultural globalization. “During the second half of the 20th century, after World War II, in both Judaism and Islam, we saw a decrease in modesty customs. There was less adherence to it.” He notes that modest fashion on the runway has no precedent, and is ushering in a new era of fashion and culture. Bloggers have taken a variety of approaches to modest fashion. Some cite religion as their primary motivation. Others, feminism.

Unlike most Christian denominations, Judaism and Islam have religious texts on dressing modestly. This has created a more firmly rooted mindset of molding faith and fashion in everyday life. In 2015 Rachelle Yadegar and Judith Illulian launched a modest fashion company for Orthodox Jewish women called RaJu, right as the modest fashion movement began trending. The company, based on Los Angeles, focuses on bold colors and patterns, and curve-hugging silhouettes with luxurious fabrics, to demonstrate how fashion-forward and modest are not mutually exclusive. More brands catering to Jewish women have emerged from this idea, such as Mikah Fashion, an Italian-made line that focus on basics, and House of Lancry, a high-fashion brand that creates clothes that can be street or runway styles. Bari Mizmann (@barianna) is a Jewish modern style blogger whose tagline “A Modest Comeback,” reveals her commitment to the style and the culture surrounding the movement. She creates videos explaining how to secure her “tichel,” a headscarf, using tips and tricks, as well as posts of herself modeling modest clothing.

Secular Motivations

But it’s not just the religious consumer driving this growth. Increased consciousness about covering up certain parts of the body is also being embraced by the mainstream market.

“I feel it is about female confidence, that you can look good without going down the Kardashian route” said Louisa Smith, a Europe-based fashion forecaster who tracks apparel and fabric trends for many global companies. “There seems to be a return on the runways to craft and style. “Smith has been seeing a shift toward subtle femininity and lowering of hemlines and more covered effects. “It is subtly understated and soft, not a drastic shift, but definitely growing. I think this demure direction ties in with the interest of traditional values as well as to the appeal of dressing up compared to the tidal wave of athleisure styling that swamped the market.” Smith cited Alessandro dell\’Aqua\’s No 20 label, as well as Marni, Prada, and Gucci, as the standout runway collections that are gradually becoming more feminine yet covered.

Whatever the source, modest fashion is quickly losing its old-fashioned stigma, and looking very fashion-forward, a liberating direction for many women who want to embrace, for whatever reason, a new landscape that could change the dynamics of the female community for years to come. “It’s not just about covering up your body to defy the typical standards of beauty that our society has given us,” observes Erin, a twenty-three-year old marketing professional living in New York. “It’s about comfort, empowerment, and dressing in ways that allow us to do our best work. For some, that’s dressing modestly, but I can also say that this movement is not about limiting your fashion-forwardness.” Modest fashion brand RUH Collective founder Sonia Trehan posted on Instagram that the movement is about far more than just wearing pieces of clothing that hide certain areas of the body. It is about culture and values, and about understanding the various forms of the female experience.

On the date of the Modist launch, which not coincidentally occurred on International Women’s Day, founder Ghizlan Guenez released a statement: “Our mission is to build a strong sense of purpose to empower a woman’s freedom of choice and to acknowledge how similar women across the world are, despite our diverse backgrounds, cultures and lifestyles — a relevant conversation at this time.”

Call it serendipity or the zeitgeist of our times, but I recently ran into my old friend Ken Nisch at the NRF Retail’s Big Show. Ken is a retail brand architect, as well as a licensed architect leading JGA, a firm that designs retail spaces. His firm works with a long and growing list of exceptional retailers. Then a few days later, I ran into him again at Luxury Daily’s FirstLook conference. We both commented that everybody is talking Experiential Retail, but too few seem to be translating that “Experience” into actual strategies that will make real and meaningful experiences for customers.

Then a few days later, Robin Lewis posted a story, “Branding by Another Name: Empathy” about a new book, Brand Management Strategies: Luxury & Mass Market, by Bill D’Arienzo.

“According to Bill, we live in an era that should give a voice to the dreamers. He believes marketers need to provide hope and possibility as part of how brands project themselves to their audience. I am known to be an irascible cynic, but based on what’s going on these days, hope, possibility, and dreams sound like a good thing. I’ve ranted for some time now that our business culture has become a tactical, utilitarian transaction, creating, according to Bill, a generation of brand atheists.”

It made me realize that the hope and possibility Bill and Robin are talking about is the essential customer experience that Ken and I discussed. Those retailing and luxury experts we met at NRF and FirstLook were largely pursuing more tactical, utilitarian solutions to the retailing problems that go far beyond such easy programmable fixes. As Robin said, “What needs to change is perception, transitioning from tactical and transactional thinking to relational thinking.”

So I reached out to Ken to follow up on our preliminary discussion and delve more deeply into how retailers, especially in the luxury space, must open their minds to “shift from a product mentality to a customer mentality,” as Robin writes. This is where the transformational Customer Experience can be found. And it’s not about more data or technology, but about more feeling and emotion.

Experiential Retail Doesn’t Go Far Enough

As Robin wrote, we need a radical change in our thinking to grasp the many dimensions of Experiential Retail before we can ever hope to implement it in the shopping space. “We all seem to understand the idea of experience, but I don’t think it goes far enough to create relevance for stores today,” Ken states. “The origin of the word ‘store’ is ‘storage.’ A retail store has been a place to collect and arrange things in anticipation of a transaction. Today the store must be a collection of ‘stories.’ So much time and effort in retail today is spent trying to systematize, organize and create consistency, but we’ve lost the human element of surprise and delight that should be our goal.”

Across the retail landscape, Ken sees retailers deploying experiential retail concepts following a similar set of rules, which at first might have surprised and delighted customers, but today have become ho-hum. “It seems like everyone is following the same kit of parts in the name of experiences; things like every store has a coffee bar or a workshop on the sales floor,” Ken explains. “The tools that retailers are leveling experiences against are falling into the same bland ubiquity that has resulted in the sad state of retail today. We have become too focused on information, data, CRM and one-off ideas, like the coffee bar, as a substitute for the personal and imaginative.”

Time for Imagination Retail

“It’s time for the Imagination Economy, rather than the Information Economy,” Ken enthuses. And it’s time for Imagination Retail, not in the Disney or Las Vegas sense where the experience substitutes for the real thing, but rather tapping into imagination that sets you up for what you are going to see or experience. Ken explains that Imagination Retail becomes a mind-opening rather than a mind-closing experience, as is so much of retail today. He points to retail associated with experiences, like zoos and museums, or outdoor/expedition retailers, like REI or Patagonia, that prepare you for an experience you are looking forward to or are excited about. “Whereas traditional retail is at the end of the ride,” Ken says, “think about retail at the front of the ride, to get you excited about the experience to come. Some food stores do this, presenting the ingredients together that you’ll need to cook in anticipation of your dinner party.”

People’s imagination is tantalized and their excitement and engagement grows in anticipating the experience to come, as cited by research led by lecturer Jeroen Nawijn and published in the Applied Research in Quality of Life journal. People’s vacation happiness peaks during the eight-week period before their holiday experience rather than afterwards. Retailers’ greatest opportunity today is to get out in front of the customer’s experience and help them anticipate an exciting experience to unfold.

Ken points to a successful example of Imagination Economy retail: the Dover Street Market, launched first in Mayfair, London, and recently expanded to Lexington Avenue in New York. The Market creates anticipation for new polymorphic, cross-cultural shopping experiences by closing up a couple of times a year to reboot the concept with new things to do, see and experience that mixes and matches heritage, price point and culture.

Or the store, STORY, on Ninth Avenue in New York, that completely reinvents the layout and theme of the store every six to eight weeks. A totally new range of merchandise is curated around stories for its young, urban shoppers to make the offerings important to know about and experience.

Ken also sees the faux-Paris experience offered in Las Vegas as potential for a retailer to set up a shop that will get people excited to go to Paris. He asks, “What kind of things and experiences would such a shop offer that communicates the true passion to go to Paris, rather than just gives them a substitute?”

Stop Looking in the Rearview Mirror and Look to the Future

Much of luxury retail is failing because it is too backward-looking. “Luxury brand stores may tell me everything that has happened. But it is all about looking backward, not looking forward,” Ken says. And it is because of that rear-view-mirror approach that luxury brands are missing out with so many millennials. “Millennials live in the future, not in the past,” Ken reveals. “They are thinking about the job they don’t have yet, the trip they haven’t gone on, what they are going to learn. They are future-forward, whereas boomers tend to think about what they have or what they’ve done. Retail needs to be more about looking forward, not looking back.”

In reimagining retail for the Imagination Economy, Ken believes department stores have the biggest opportunity, yet they are held back by their conventional 20th century, storehouse, transactionally oriented thinking. “Think of the great department stores at the beginning of the 20th century or the movie palaces of the 20s and 30s. They took people to places to see things that they never thought possible,” Ken says. “The time is ripe for retail to help people opt out of their three-dimensional real world to find a better place. Transport them to ‘somewhere over the rainbow,’ into a fifth-dimensional imaginative world with a little bit of reality stuck in. The technology to create virtual digital environments for luxury brands is here now. All it will take is a brand or retailer to construct a virtual imaginative place that can be the setting for a new kind of shopping experience.”

Berlin based KaDeWe, a heritage department store founded in 1907, is fast-forwarding into a 22nd-century future. Echoing the wild success of the Maker movement, it has devoted one floor to an “Idea Shop” where people can express their creativity and imagination through arts and craft experiences. Along with displays of a seasonal selection of the latest trends in textiles, handicraft, jewelry, art material, home decorating and stationery, customers are invited to make things themselves with craft materials. “It’s a place where people can meet people and make ‘store friends,’” Ken explains. “They can collaborate to make things and take things away. They call it the ‘happy floor’ because it is designed to give people an experience that makes them happier, calmer and emotionally engaged.” So KaDeWe becomes more than just a store to buy things. It becomes a place where meaningful experiences happen.

Ken cautions that it is time to move beyond data, algorithms, and predictable retail. Instead, imagine the kind of experiences people will pay for that make them feel engaged, surprised, invigorated, and rewarded. Otherwise, they will be stuck in storehouses filled with stuff but empty of shoppers. Ken warns, “Retailers are so focused on looking at the world through the rearview mirror that they are doomed to miss the edge of the cliff on the road ahead of them.”

The home furnishings industry, if you’ll excuse the expression, is scared silly. Virtually every product that you plug in, sleep on, dry yourself off with, put your clothes in, eat on, and generally use in your home comes from someplace other than the United States.

And if these products are going to be the ping-pong balls of international diplomacy over the next four years, the consequences could be unprecedented and possibly devastating as well. We all know the new administration in Washington has made what it perceives as an unfair imbalance in global trade to be a benchmark of its policy initiatives. We know too that talk is cheap—not to mention easy—and that the ultimate outcome of any radical change in international commerce is far from certain. We also know that the home furnishings industry is far from alone in the broader consumer products universe in being potentially turned upside down by all of this. Other industries, from apparel to automotive to agriculture, will all see enormous impacts if this rhetoric turns to reality.

Home Alone

But home is somewhat different. While a lot of attention has been focused on the car business with its intertwined global sourcing models, the fact of the matter is that the majority of cars and trucks sold in America are still made in America. Apparel, while largely an import-dominated business, has a relatively low cost of entry and there are still thriving pockets of American manufacturing in the South, Los Angeles and several other locales. Even agricultural products are still largely grown, processed and manufactured domestically.

Home products, not so much.

If something has a plug in your home, chances are it came from overseas. Whether it’s a lamp, a toaster oven, a TV or a hair dryer, it will say in the same print “Made there…not here.” In fact, the small appliance business was one of the first major American industries to move offshore, first to Japan, then to Taiwan, eventually settling for the most part in China … yes, that China that is being threatened with a 35 percent duty.

Household items like dishes, flatware and glassware used to be largely American made but they too followed a similar route and today are mostly Asian. And what isn’t from Asia is usually from Europe, from places like Portugal, Italy and Germany.

Furniture is a little more diverse, as much a function of size as any other dynamic. Today about 90 percent of the bedroom, living room and dining room wood-based products we buy here are made there. Still using a less automated manufacturing process than other household items, products like dressers, chairs, tables and bookcases have followed the cheap labor route, moving first to Taiwan and then China, but more recently to Vietnam and other Southeast Asian countries.

Upholstered furniture—what the industry calls sofas and such but what regular people call couches and chairs—are not quite as import-dependent. Perhaps as much as 40 percent of that business remains domestic if you count the final assembly stage where components from Asia are shipped here and put together by U.S. hands. That number has remained pretty steady, driven in large part by the custom-made nature of most sofas that negate the advantages of mass production overseas.

Bedtime Story

Then there’s sheets and towels. The next time the folks at the Harvard B School are looking for a good case study, they really ought to take a look at this category because it exemplifies the good, the bad and the ugly of international commerce.

Up until the turn of this last century, home textiles products like sheets, other bedding products, towels and assorted accessories were largely domestically made. Big textiles mills like WestPoint Stevens, Springs and Fieldcrest Cannon spent a lot of money keeping their manufacturing facilities up to date and state of the art to keep costs—and headcounts—down.

And it worked. It was one of the most efficient, low-cost and import-busting industry sectors in the country.

But then came the opening of international trade and the breakdown of barriers. It wasn’t NAFTA in this case; neither Mexico nor Canada had robust industries in this field, so they were not the threat. It was Asia. And when duties came off imports from China and elsewhere in the early 2000s, the dam broke…the tide changed…and well, you get it: All hell broke loose.

In a matter of just a few short years, an industry that was 90 percent domestic totally flipped and became 90 percent imports. Eventually that number went even higher and today there is only one—count ‘em, one—decent-sized home textiles mill in the United States selling to the retail market. (Ironically it is owned by a Pakistani company, which is another one of those subtleties that has escaped the conversation so far on trade imbalances.)

With this shift came an enormous advantage for consumers. Suddenly, they could choose products from literally hundreds of suppliers from a number of countries, rather than the limited assortments they were subjected to when just a handful of American companies controlled the marketplace. This new competition not only brought new product options but also lower prices. Today you can buy high-quality sheets and towels for the price you would have paid for opening-level goods 15 years ago.

Of course, the shift also brought a devastating loss of jobs throughout the American southeast where most manufacturing had been centered. Tens of thousands of workers lost their jobs and it has taken at least a decade for recoveries in some of these regions to take hold. But take hold they have. The area along the Georgia and Alabama border where WestPoint Stevens had its main manufacturing is now the home to two giant automobile factories, from Kia and Hyundai. BMW set up a factory in the former textiles region of South Carolina around Spartanburg and its suppliers, including Michelin and others, followed. (All from foreign-based companies employing American workers…but I digress.) And what was once the giant Kannapolis, NC headquarters and mill for Fieldcrest Cannon is now a medical research center.

This normal ebb and flow of business and industry is not uncommon, of course. The original home textiles and apparel manufacturing bases in New England, around Boston, have become the East Coast capital of high tech, rivaled only by Silicon Valley in California. It’s just what happens.

The 35 Percent Solution?

Nobody—at least nobody in their right mind—expects all of this talk of duties and tariffs of as much as 35 percent to ever become reality. They are being fostered by someone who is the first to admit that he takes an outrageous opening negotiating position, knowing the bluster will drive an acceptable deal in the end.

But any change in the rules of international commerce will have profound effects on the home furnishings business…and not necessarily the intended ones:

• Manufacturing of home furnishings will not return to the United States in any meaningful way. Building big factories to make things like toasters, towels and teapots requires big bucks. The return on investment is low, slow and not entirely guaranteed. People with money almost always can find a better way to spend it. Besides, the people who know how to make these products aren’t around anymore. For some of these industries, it’s been a generation —maybe two—since anyone worked doing this. Do you know any millennials who want to run a sewing machine hemming pillowcases?
• Any additional costs due to things like increased duties, taxes and whatever are going to be pretty much passed along to the consumer, with predictable results. Makers and sellers of these products don’t work on big fat margins like Apple or Facebook. They are not going to eat these costs. And consumers, faced with higher prices on household goods they’ve gotten used to paying low prices for, are not going to rush out to spend more.
• American home furnishings companies are also not going to get any better at learning how to export, prolonging a dismal track record of ignoring overseas business opportunities. Even the few that get their export acts together are going to face retaliatory trade barriers from the rest of the world, which will not be too pleased with the new rules of international commerce.
• Finally, without the option of buying goods from around the home furnishings producing world, American consumers are going to be faced with not just higher prices, but with fewer choices, diminished assortments and generally less interesting products. That ain’t going to go over real well either.

Put it all together and the look of worry on the faces—and balance sheets—of the home business are easy to understand. These are very much scary times.

In the meantime, all those ships of imports are still on their way to American shores and American shelves. If the walls go up, not just on our borders but in our ports and loading docks too, it will indeed have been perhaps the most foolish move in American business history.