Monocle, the monthly lifestyle & news magazine founded in 2007 by Tyler Brulé, organized a new yearly event designed to gather business minds and reflect about how business – and the world – moves forward now.

Among the topics covered at the conference, several were directly connected to the IADS fields of study: how city life can bounce back after a summer slump, how the travel industry will get moving, how to fix the luxury industry, the evolution of the office as a space and as a practice, and, finally, retail innovations. Speakers included the Mayor of Athens, the head of security policy for the Swiss Federal Department of Defence, the President of the International Red Cross Committee, the CEOs of Vitra and V-Zug, the owner of the Soho House and Hyatt in Amsterdam, or the co-founder of On running shoes.

Both the subjects and quality of speakers led IADS into attending this new conference. Out of these intensive 12 discussions packed in a day, IADS identified the following key findings, that we confront to our understanding of the department store situation now:

About the global economic situation:

All speakers including UBS were confident about a upturn of the global economy, even though the pandemic will leave its mark on how we do business and appreciate risk.  Hoteliers are convinced that not only things will come back to “normal” but they will surpass it (trade, travels, tourism), and the art market leaders think that business will not “bounce back” but “bounce forward”, with new ways to use digital to sell even more physically.

About the notion of public space: “private spaces do good when they go public”

Hoteliers review the way they interact with the city: the lobby is a public space where the whole town is welcome and mingles. Why? Because in the frame of selling an experience and an emotion the traveller can only find in one given destination, interaction and understanding of the locals are assets. Making the whole city come to your lobby is a way to be unmissable to it.

Going even further, some spaces are thought to be both public and private, by mixing purpose and economic interest. Food park Mercato Metropolitano in London, opened in 2016, is thriving by having simple, but strict rules: no single-use plastic and big brand, everything including beer made local and fresh, social commitment to women entrepreneurs and local communities by providing jobs and free meals to poor families. The result? The business will post a €24.5m turnover this year, in pandemic times.

On Sneaker co-founder uses business to revitalize villages. In Swiss village La Punt, he is teaming up with architect Norman Foster to create a “village in the village”, where worker from the whole world will be able to come in teams and co-work together in a beautiful surrounding. Benefits? The village gets education, jobs and a doctor.

Those three topics echoed very much many of the conversation we had at IADS with our members about traffic: post-Covid, customers need a good reason to come to a store. You can of course sell them a product (but Amazon too), an experience (but monobrands stores too), or make them come because of the emotional bonds they have with you (“popular” stores). And a good reason to come is the purpose of the space they are visiting. This echoes the new “agora” at the heart of the Monoprix Montparnasse in Paris, where square meters are literally given away to local associations to make sure Monoprix is at the heart of the neighborhood.

About the customer

Hoteliers dismiss the idea that “customer is king”. In the post-covid world, we are all human beings first, looking for experiences. This is why instead of bringing everything on a plate, they train their staff to befriend their customers, whom they invite to “come as a guest, leave as a friend”. This is also the essence of a good retailer, and can be related to the efforts made by Galeries Lafayette in their Champs Elysées venture, where selling personnel is trained and equipped to create a personal bond first and foremost, or what Farfetch promotes with their “Store of the future” in Browns (London), using technology to allow sales staff to focus on customers instead of low value activities.

About retail: how can you avoid commoditization?

• By questioning what you do and how. Hotels are not anymore places where you only sleep. Business gets more focused (smaller, destination and experience-oriented) and many predict difficulties for larger chains privileging quantity over quality. This mirrors the department stores business, with some having opened loss-making locations in the past for the sake of growth (see John Lewis in Birmingham, Neiman Marcus in Hudson Yards, Manhattan, both closed today) while smaller, more focused retail destinations still do well.
• By helping others companies: design furniture Vitra is now using its knowledge of what makes a great office to provide consulting to other companies, helping them to rethink underused or unused post-Covid offices, give them a new purpose and help bring their staff back and happy. Interestingly, they did not mention the same potential service to be provided at the customer level (more and more interesting by his/her conditions of home office). Bang&Olufsen already provides this service by coming to the place and checking it before setting up its appliances and sound systems.
• By sharing knowledge over selling a product. Swiss luxury white goods manufacturer V-Zug does not pretend to sell a luxury product, but a luxury experience. How? By organizing cooking classes and food academies with French chefs in their “Zugorama” showroom, where customers can come, learn in real conditions and be convinced by the superior quality of their products.
• By sharing experience over selling a product. Swiss shoes manufacturer On Running decided to sell their new model by subscription only. It is not possible to fully own it, as the customer pays a monthly €29.9 rent, gets it replaced every 6 months by a new pair (On takes care of the recycling) and needs to give it back when the subscription is over. We have already seen such case in other industries where the customer does not own what he buys, like Tesla: when a car is bought, all options taken belong to Tesla, not the owner (allowing an Tesla upsale on said options even on second-hand resales by former owners). Can this be addressed by Department Stores? Is a subscription model sustainable? Recent examples from Pret à Manger in UK could be a good hint, which we will further elaborate in a coming analysis.

About sustainability: claiming to be sustainable is easier than being it. Why not communicating on the efforts made?

Sustainability is seen as obvious as electricity and wated in the hospitality business. However, hoteliers reckon it is difficult to implement when more than one location is operated (procedures, materials…). On their side, manufacturers reckon it is difficult to achieve without altering the quality of their products (especially in luxury and technical fields), this is why both sides proposed during their talks to look at different ways to address sustainability in a very immediate and effective manner:

• In routine operations: for hoteliers, a breakfast made only with local food is sustainable. Retailers & brands are massively looking at this option by teaming up with sustainable brands (“Go for Good” in Galeries Lafayette, “Rethink” in Manor), running however the risk of being accused to greenwash by transferring the responsibility of the sustainability claim on the brands sold,
• In challenging the way business is conducted: design furniture editor Vitra used to spend the same money for 5 days of presence at the Salone de Mobile on a seasonal basis, than an investment lasting 15-20 years on the Vitra Campus. After the Covid wake-up call, the money was channeled into digital, which helped them have a good season during pandemic, while significantly reducing ecological foot print and hassle. This is a trend we have seen as well in Fashion with virtual showrooms. Interestingly enough, in both cases this led to drastic choices when building the collection: create more commercially efficient products and avoid novelty for the sake of novelty. IADS members merchandising directors, in a talk we held on the 21st of September, mentioned that this new way of working, albeit not 100% ideal, especially in terms of touch & feel, allowed a significant gain of time and energy, to focus on customer’s actions.
• In being honest with customers: Vitra is not ready to replace cow leather with pineapple leather, for one simple reason: the latter will last 2 years, which is not the image the brand wants to give. This is the reason why they rather completely assume their material choices, but with a free 30 years full guarantee. For them, low replacement rate is also part of contributing to a more responsible consumption. Another example from Vitra is their plastic chairs: they know that plastic is not good for the planet but have not found a replacement. So they found a supplier producing the material from single use plastics: the plastic chair, being valorised by an efficient design, branding and storytelling, will last 50 years and paradoxically contribute to saving the environment. It takes some “guts” to admit that, yes, this is real leather, or yes, this is plastic. However, by insisting on the impact on the product longevity, it also makes the customer more responsible, and more connected, with the product he is buying in full knowledge.

As a conclusion, this series of conferences, which appeared at the beginning of the day quite heterogenous, made sense in the end by the common red thread which is the role of public space and how to use it collectively. This is an even more acute question now that we have all, in every country, gone through the same experience, and customers, in every market, have changed behaviour and expectations quite significantly.

More details on the 12 conferences in the document to download below.

full IADS report: The Chief Monocle Conference 2020

The Chief Summit website

Speaker line-up:

• Ruth Rogers of The River Café
• Emma Tucker of the Sunday Times
• Peter Maurer the President of the International Committee of the Red Cross
• Paul Geertman the CEO of Aedes Real Estate
• Alberto Bertoz the SVP of V-Zug
• Sharan Pascricha the CEO of Ennismore

among many others