Research report 2013/14. Studio Retail. English version by Strelka Institute for Media, Architecture and Design

ОБРАЗОВАТЕЛЬНАЯ ПРОГРАММА 2013/14: ПОВСЕДНЕВНОСТЬ Жители российских городов ездят на машинах по загруженным улицам, сидят перед компьютерами в конторах и офисах, встречаются в кафе с друзьями, покупают в магазинах вещи и продукты, а дома — воспитывают детей, делают ремонт и смотрят телевизор. Всё это привычные будни, огромный и сложный мир обыденного, на самом деле очень мало исследованный и слабо отрефлексированный. В 2013/14 году «Стрелка» выбрала темой своей образовательной программы «Повседневность», или Urban Routines. Из чего складывается обыденная жизнь города? Как наша новая реальность соотносится с прошлым и каких изменений можно ждать в будущем? Возможно ли, исследуя структуру обыденного, прийти к масштабным выводам и сделать на их основе инновационные проекты? Эти и другие вопросы находились в центре внимания пяти проектноисследовательских студий «Стрелки» — Жилье/Dwelling, Офисы/ Offices, Автомобили/Cars, Магазины/Retail и Связи/Links. В этой публикации представлены результаты работы студии «Магазины».

Электронный вариант публикации и результаты работы других студий доступны на issuu.com/strelkainstitute

EDUCATION PROGRAMME 2013/14: URBAN ROUTINES Every day city dwellers drive their cars through over-populated streets, sit in front of their office computers, meet friends at local cafes, buy goods and groceries in stores and shops, at home educate their children, renovate, watch TV. The very usual routine, a gigantic and complex world of the ordinary, is in fact quite under-researched and poorly analyzed. In 2013/14 Strelka chose Urban Routines as the theme of its education programme. What defines the daily life of a city? How does the past influence our present reality and what will the future entail? By researching the fabric of the ordinary, is it possible to arrive at ambitious outcomes and create on their basis innovative projects? These and other issues were the focal point of five of Strelkaâ&#x20AC;&#x2122;s research and design studios: Dwelling, Offices, Cars, Retail and Links. This publication presents research outcomes of studio Retail.

This and other studio publications are available for download atÂ issuu.com/strelkainstitute

ДИРЕКТОР Юрий Григорян РУКОВОДИТЕЛЬ ПРОЕКТА Эдуард Моро КООРДИНАТОР Мария Славнова СТУДЕНТЫ Екатерина Асинская, маркетолог, Россия; Даниэле Беллери, журналист, Италия; Алина Бибишева, градостроитель, Россия; Марта Коэ-Галеотти, социолог, США; Даниил Гавриш, архитектор, Россия; Юлиана Гусева, урбанист, Россия; Павел Ильичев, менеджер проектов, Россия; Алена Ковалева, филолог, Украина; Кирилл Лебедев, архитектор, Россия; Анна Маикова, маркетолог, Россия; Альбина Нургалеева, координатор проектов, Россия. ЭКСПЕРТЫ-КОНСУЛЬТАНТЫ Роналд Алтун, архитектор, Altoon Partners; Иван АртВандал, уличный художник, блоггер, граффитихантер; Ольга Балашова, теоретик искусства; Дмитрий Бурлов, ритейлэксперт, исполнительный директор, «Магазин Магазинов»; Евгений Бутман, ритейл-эксперт, Ideas4retail; Виктор Вахштайн, социолог; Джун Уилльямсон, архитектор, Городской колледж Нью-Йорка; Лизавета Герман, независимый куратор; Артем Гридин, дизайнер, «Гейм Инсайт»; Эллен ДанхэмДжоунз, архитектор, Городской колледж Нью-Йорка; Наталья Жеваго, основатель образовательной организации, «Культурный Проект»; Илья Завалеев, консультант в области строительства, Ernst & Young; Азат Имангалин, Smartloc; Маттиас Кархольм, архитектор, Университет Мальмё; Алевтина Кахидзе, художница; Василий Ключарев, нейроэкономист, Высшая школа экономики; Джулия Кристенсен, художник, Оберлин колледж; Алексей Левинсон, социолог, «Левада-центр»; Мария Ланько, независимый куратор; Юлия Мосолова, ритейл-эксперт, «Магазин Магазинов»; Тимур Натхов,

доцент, Высшая школа экономики; Марина Онищик, фотограф, Британская высшая школа дизайна; Янина Пруденко, теоретик медиаискусства; Кирилл Пузанов, кандидат географических наук; Григорий Ревзин, архитетурный критик; Денис Ромодин, историк архитектуры; Андрей Смирный, иллюстратор, Lookatme.ru; Денис Соколов, партнер, Cushman & Wakefield; Эдуард Сомов, Smartloc; Алекс Сухаревский, партнер, McKinsey & Co; Даг Стивенс, футуролог, Retail Prophet; Юлия Страшнова, руководель НПО «Социальная инфраструктура», ГУП «Научноисследовательский и проектный институт генерального плана города Москвы»; Томас Фрей, футуролог, Институт Да Винчи; Анатолий Хорошилов, искусствовед; Аристарх Чернышев, художник, Арт-группа «Электробутик»; Евгения Шамис, психолингвист, RuGenerations; Алексей Шульгин, художник, Арт-группа«Электробутик»; Ольга Щедракова, ритейлэксперт, редактор, Mall Magazine; Дэвид Эриксон, программный директор, Институт «Стрелка».

DIRECTOR Yury Grigoryan PROJECT LEADER Edouard Moreau RESEARCH COORDINATOR Maria Slavnova STUDENTS Katy Asinskaya, marketing expert, Russia; Daniele Belleri, journalist, Italy; Alina Bibisheva, urban planner, Russia; Martha Coe-Galeotti, urban sociologist, USA; Daniil Gavrish, architect, Russia; Yuliana Guseva, urbanist, Russia; Pavel Ilyichev, project manager, Russia; Olena Kovalyova, philologist, Ukraine; Kirill Lebedev, architect, Russia; Anna Maikova, marketing strategist, Russia; Albina Nurgaleeva, project coordinator, Russia. EXTERNAL EXPERTS Ronald Altoon, architect & CEO, Altoon Partners; Ivan ArtVandal, street artist, blogger, graffiti hunter; Olga Balashova, art theorist; Dmitry Burlov, retail expert, CEO Magazin Magazinov; Evgeny Butman, retail expert, Ideas4retail; Aristarkh Chernyshev, artist, Art Group Electroboutique; Ellen Dunham-Jones, architect, City College of New York; David Erixon, programming director, Strelka Institute; Thomas Frey, futurist, DaVinci Institute; Lizaveta German, independent curator; Artem Gridin, art director, Game Insight; Azat Imangalin, Smartloc; Alevtina Kakhidze, artist; Mattias Kärrholm, architect & urban planner, Malmö University; Anatoliy Khoroshylov, art historian; Vasily Klucharev, neuroeconomist, Higher School of Economics; Maria Lanko, independent curator; Alexey Levinson, sociologist, Levada-Center; Julia Mosolova, retail expert, Head of PR Magazin Magazinov; Timur Natkhov, assistant professor, Higher School of Economics; Alexei Novikov, economist, Thomson

Reuters; Marina Onishchik, photographer, British Higher School of Art & Design; Yanina Prudenko, theorist of media art; Kirill Puzanov, geographer; Grigory Revzin, architectural critic; Denis Romodin, architectural historian; Olga Schedrakova, retail expert, chief-in-editor Mall Magazine; Evgeniya Shamis, consultant, RuGenerations; Alexei Shulgin, artist, Art Group Electroboutique; Andrey Smirny, illustrator, Lookatme.ru; Denis Sokolov, partner, Cushman&Wakefield; Eduard Somov, Smartloc; Doug Stephens, futurist, Retail Prophet; Julia Strashnova, head of the social infrastructure department, the Moscow General Plan Research and Design Institute; Alex Sukharevsky, partner, McKinsey & Co; Victor Vakhstayn, sociologist; June Williamson, architect, City College of New York; Ilya Zavaleev, consultant, Ernst &Young; Julia Christensen, artist, Oberlin College; Natalia Zhevago, founder of the educational organization, Cultural Project.

ХВАТИТ ТОРГОВЛИ Современные города лишились большинства своих первоначальных функций: они перестали быть тщательно укрепленными и внимательно охраняемыми крепостями; они утратили свою неприкосновенность религиозных центров; они больше не являются мощными промышленными узлами. Даже фундаментальные роли городов как политических, административных и образовательных центров постепенно переносятся в виртуальную среду. Тем не менее, одна из функций сохраняется неизменной и по сей день: от начала цивилизации и до наших дней торговля остается одним из наиболее важных явлений, поддерживающих жизнь в городах одним из старейших и наиболее сложных феноменов. Примечательно, что торговля выполняет двойственную функцию, которая не проявляется с той же интенсивностью в других рутинах: она одновременно усиливает и нарушает паттерны повседневности. В определенном смысле торговля может выступать и создателем четкого порядка действий, и нарушителем существующего повседневного уклада, легко удовлетворяет как базовые запросы горожан на основные товары и услуги, так и отвечает более сложным требованиям уникальности, удовольствия и развлечения от процесса шопинга. После распада Советского Союза торговля стала первой социальноэкономической деятельностью в России, которая перешла из системы государственного управления в среду, регулируемую рынком. Она стала символом новой эры и новой жизни, а ее организация разрабатывалась с нуля посредством хаотичного поглощения и трансформации существующих коммерческих моделей, типов и методов, их смешения и адаптации к новой российской действительности. Из-за непредсказуемых перемен и невероятно быстрых темпов развития российского рынка, представление о текущем статусе и особенностях системы торговли в России и, в частности, в Москве, размыто и требует методичного осмысления и переоценки. Исследование, проведенное студией «Магазины», ставило перед собой цель составить портрет московской розничной торговли, сравнить его с мировыми тенденциями и моделями, понять скрытые структуры и характеристики, выявить существующие парадоксы, которые формируют нашу повседневность. Проекты студии сосредоточены на поиске связей и противоречий в макромасштабе (Кирилл Лебедев) и микро-масштабе (Алина Бибишева)

ENOUGH RETAIL By now, cities have lost most of their original functions: they have ceased to be meticulously fortified and carefully defended strongholds; they have waived their roles as religious citadels; they are no longer powerful industrial nuclei. Even the fundamental roles of cities as political and administrative hubs have been partially transferred to the virtual domain. However, one function has been preserved — trading has remained one of the most vital urban activities, sustaining the vibrancy of the cities from the onset of civilization up until the present day. Retail as an essential urban routine is one of the oldest and the most complex of phenomena. Notably, retail performs a dualistic function that does not feature with the same intensity in any other routine domain: urban retail experience simultaneously reinforces and unsettles the patterns of the quotidian. Retail can be perceived as a routine creator and a routine breaker, seamlessly offering an answer both to citizens' need for basic goods and services as well as to their demand for uniqueness, pleasure, and entertainment. After the fall of the Soviet Union, retail was the first socio-economic sphere in Russia to switch from state-control to a market-regulated condition. It was converted into the symbol of a new era and new life, and was fully developed from scratch, absorbing and transfiguring existing commercial models, types, and methods, mixing and adapting them to the Russian reality. Accordingly, the rapid pace of the retail revolution in Russia requires some reflection in order to comprehend and appreciate its current status and peculiarities. The goal of the Retail Studio’s research was to produce a snapshot of Moscow retail, to compare it with global trends and patterns, to understand hidden retail agendas, and to reveal certain paradoxes that shape our retail routine. The Studio’s projects focus on finding points of tension: between the macro- (Kirill Lebedev) and micro-scale (Alina Bibisheva) of retail in Moscow; between the Soviet past of Russian retail (Martha Coe-Galeotti) and its possible future (Daniele Belleri); between excessive superficial and intrusive manipulations that operate on consumers every single day (Yuliana Guseva) and attempts to limit consumption as a need or as a choice (Anna Maikova); between less obvious functions of retail in the city (Katy Asinskaya) and re-evaluation of dominant retail models (Pavel Ilyichev); between the way retail consumes time (Daniil Gavrish) and the patterns of consumers making their daily purchase choices (Albina Nurgaleeva); as well as the way retail is reflected in art, globally and locally (Olena Kovalyova).

торгового ландшафта Москвы; советском прошлом торговли (Марта Коу-Галеотти) и ее возможном будущем (Даниэле Беллери); вездесущих примитивных и передовых техниках манипуляций, которые воздействуют на потребителей каждый день (Юлиана Гусева) и попытках ограничить потребление в силу необходимости или в качестве личного выбора (Анна Маикова); неочевидных функциях торговли для города (Екатерина Асинская) и переоценке доминирующих розничных моделей (Павел Ильичев); поглощении торговлей времени покупателей (Даниил Гавриш) и закономерностях в поведении потребителей, которые совершают свои ежедневные покупки (Альбина Нургалеева); попытках понять, как торговля глобально и локально отражается в искусстве, и о чем нам это может рассказать (Алена Ковалева). Удивительно, но по утверждению городских властей, в Москве не хватает торгового пространства. Правительство Москвы уверено, что после более чем двадцати лет свободного рынка, Москве все еще не хватает по крайней мере такого же количества торговых площадей, сколько уже в ней существует. Более того, мэр Москвы Сергей Собянин неоднократно подчеркивал, что город нуждается в большем количестве некрупных доступных местных магазинов, но и сегодня в Москве приоритет все еще отдается строительству огромных торговых центров и супермаркетов. Внимательно изучив положение торговли в городе, оценив глобальную и локальную динамику рынка, проанализировав возможные пути улучшения, мы с удивлением обнаружили, что, с точки зрения количества, в столице более чем достаточно торгового пространства. Особенно в сравнении с Европой, которая традиционно считается образцом для подражания в развитии рынка торговли. Еще более важным является осознание того, что мы не можем думать о розничной торговле исключительно с позиции количества квадратных метров торгового пространства — нельзя сравнивать Москву с европейскими или американскими городами, слепо заимствуя существующие модели. Мы должны выработать собственное понимание того, что такое московская розничная торговля, учитывая количество, качество, типологию и разнообразие. Принимая во внимание западный опыт, анализируя удачи и неудачи, трансформируя и адаптируя модели, мы должны прийти к самостоятельному пониманию, что значит «достаточно» и каким оно должно быть именно здесь, в Москве. — Юрий Григорян, Эдуард Моро

Surprisingly, the city authorities have claimed that there is not enough retail space in the city of Moscow. They state that, after more than twenty years of the free market, Moscow is still lacking in retail, which they believe could even double the amount it now has. Moreover, the Mayor of Moscow, Sergei Sobyanin, stresses that the city needs more small accessible local stores, but it seems that the only structures that are being built are huge malls and supermarkets. By considering this issue closely, evaluating global and local dynamics, and searching for a Moscow-specific way to design a better retail sphere, we have discovered that there is already enough retail space in the capital in terms of quantity when compared to Western Europe, which is considered the role model for Moscow in retail development. What is even more important is the realization that we cannot think of retail only in terms of quantity of square footage. We cannot simply compare Moscow to European or American cities, blindly adopting the existing Western models. We have to elaborate our own comprehension of Moscow’s retail: in terms of quantity, quality, typology, and diversity. We have to think critically, locally, and temporally in order to cultivate our own insight as to what is enough retail and why it is enough. — Yury Grigoryan, Edouard Moreau

This book is designed for personal, non-commercial use. You must not use itÂ in any other way, and, except as permitted under applicable law, you must not copy, translate, publish, licence or sell the book without the consent ofÂ Strelka Institute for Media, Architecture and Design.

TITLE

RE TA I L A N D T H E C I T Y

S H O P P I N G H A B I TAT S

S H O P P I N G M A L L : from Quantity to Quality

116

June Williamson “Retrofitting shopping malls” interview by Pavel Ilyichev

120

ECOSYSTEM OF SPECIES

142

L I M I T I N G T H E U N L I M I T E D: Necessity or Choice?

164

Doug Stephens “Bettering of retail” interview by Anna Maikova

170

R O U T I N E P O RT R A I T S

186

Lorna Hall “We are at a tipping point” interview by Albina Nurgaleeva

190

T I M E I NVA D E R S

210

Mattais Kärrholm “Retailising space” interview by Daniil Gavrish

E N O U G H

R E T A I L

Eduard Moreau Kirill Lebedev Pavel Ilyichev

Alina Bibisheva Anna Maikova

Albina Nurgaleeva

Daniil Gavrish

TITLE

214

C O N S U M E R M A N I P U L AT I O N : Pressing Your Buy-Buttons

246

Dr. Vasily Klucharev “Neuromarketing: hope or hype?” interview by Yuliana Guseva

252

T H E G O O D S I D E O F E VI L

276

Yuliana Guseva

Katy Asinskaya

T imotheus Vermeulen and Robbin van den Akker “It’s not that people consume less, they consume very differently” interview by Katy Asinskaya

282

A RT I C U L AT I N G RE TA I L

318

Alevtina Kakhidze “To buy or not to buy?” interview by Olena Kovalyova

330

L A S T I N G N O S TA LG I A

338

Sharon Zukin “Shopping is a search for truth and beauty” interview by Martha Coe-Galeotti

346

TOWA RD S A RU S S I A N A U TO N O MY

362

Kalle Lasn “Fighting capitalism with small retail” interview by Daniele Belleri

386

Evgeny Butman “On the nature of limits” interview by Yuri Grigoryan and Maria Slavnova

Olena Kovalyova

Martha Coe-Galeotti, Katy Asinskaya

Daniele Belleri

E N O U G H

R E T A I L

A DV E RT I S E M E N T

The Good Side of Evil, p. 241

A DV E RT I S E M E N T

Towards a Russian Autonomy, p. 335

A DV E RT I S E M E N T

Ecosystem of Species, p. 109

A DV E RT I S E M E N T

Time Invaders, p. 179

Routine portraits, p. 159

A DV E RT I S E M E N T

“MOST PEOPLE D O N ’ T WA N T TO B E ANONYMOUS. C U S TO M E R S WA N T TO B E T R E AT E D A S I N D I V I D U A L S . . .” Andreas Weigend Amazon chief scientist

Consumer Manipulation: Pressing Your Buy-Buttons, p. 203

A DV E RT I S E M E N T

Shopping Malls: From Quantity to Quality, p. 69

A DV E RT I S E M E N T

Articulating Retail, p. 271

A DV E RT I S E M E N T

Limiting the Unlimited: Necessity or Choice?â&#x20AC;¨p. 131

R E TA I L & T H E C I T Y

RETAIL

Edouard Moreau

E N O U G H

R E T A I L

R E TA I L & T H E C I T Y

& THE CITY E N O U G H

R E T A I L

R E TA I L & T H E C I T Y

A CHOICE OF MODEL? Estimated Average Retail Square Meters per Capita

4.8

1.48

1.0

NEW-YORK 

MOSCOW 2

SINGAPORE 

(Manhattan)

? Does Moscow Already Have Enough Retail Square Metres?

Evaluating a city’s provision of retail is not such an easy task for a researcher. First and foremost, there is a crucial shortage of quantitative and qualitative data covering the whole shopping spectrum. Whilst data on shopping centres are widely available and well studied by retail consultants, street retail, which can represent up to 80% of retail offerings in cities such as London or Moscow, is too often disregarded as not economically strategic, or too small and too complex to research. Furthermore, informal retail, an important part of retail activities in

E N O U G H

R E T A I L

developing countries, is literally off the radar of local governments and retailers. Secondly, when assessing retail provision, one should look at the quality and variety on offer. Does a city need more or less shopping malls? More discounters or more mid-range shops? More local shops or more chains? More “modern formats”, such as hypermarkets or more traditional markets? Finally, the “invisible hand of the market” does not evenly distribute retail offerings, and important disparities exist within its spatial distribution between districts and between the center and the periphery. A profiling,

R E TA I L & T H E C I T Y

0.95

0.90

0.81

PARIS 

LONDON 

SAO PAULO 5

1 — Wall Street Journal, “Brooklyn Readies More Retail”, August 2, 2011 2 — Rosstat, 2012 3 — CapitaMall Trust Report to UnitHolders, 2011 4 — data compiled from “L’evolution des Commerces a Paris”, by APUR, 2011 5 — Global Cities Retail guide Cushman & Wakefield, 2013

neighbourhood by neighbourhood, street by street would be necessary to understand more precisely the state of retail provision. If retail is made by retailers who knows best what and where the demand is, and why should we ask ourselves the question of “is it quantitative enough”? The answer to that question lies in the choice of model. The average retail provision of US cities is approximately 4 square metres per person, whilst the European model tends towards 1 square metre per person or even less. Are Paris or London under-provided compared to New-York?

The historical nature of the urban fabric of European cities has naturally favoured small-scale retail development vs. large scale shopping malls and other big-boxes. Whist Moscow has traditionally had rich small scale street retail , focus has been put in recent years in the development of large scale shopping malls both in the center and in the periphery of the city. Already, Moscow has an estimated average retail density of 1.48 square metres of retail per person, ahead of Paris and London. Will Moscow tend towards the American retail model and continue the growth in retail square metres through giant malls, or will it mature into a hybrid model, shifting the focus to improving existing stock?

E N O U G H

R E T A I L

New shopping mall construction in 2013

100,000 sqm

Source: CBRE Research â&#x20AC;&#x201D; Cities with more than 100,000 sqm of new shopping centre space in 2013

E N O U G H

R E T A I L

2,800,000 sqm

2,000,000 sqm

1,200,000 sqm

400,000 sqm

Shanghai Chengdu Shenzhen Tianjin Istanbul Wuhan Moscow Beijing Nanjing Guangzhou Kuala Lumpur Hangzhou Shenyang Changqing Seoul Abu Dhabi Qingdao Dalian Kiev Cebu New Delhi St Petersburg Hyderabad Monterrey Johannesburg Bangkok Cape Town Hong Kong Ho Chi Minh City Yekaterinburg Bangalore Samara Ankara Hanoi Santiago Taipei Almaty Sao Paulo Mexico City Durban Jakarta Singapore Las Vegas Panama City Bucharest Stockholm Quezon City Calgary Sofia Muscat Vancouver Marseilles Rio de Janeiro Paris

R E TA I L & T H E C I T Y

“The amount of retail space in Moscow should be at least doubled — We must reach European levels of retail spaces” Moscow Mayor Sergei Sobyanin, 2011

E N O U G H

R E T A I L

R E TA I L & T H E C I T Y

U N D E R S TA N D I N G R E TA I L P R O V I S I O N Moscow, with an estimated 17,941,780 square meters of retail (all forms, including street retail but excluding “shadow” retail) for an official population of approximately 12 million people has surpassed Paris and London (but also Singapore and Sao Paulo) in terms of provision of square metres of retail per person. In this sense, Moscow has a ratio of 70/30 of street retail vs. shopping centres in the periphery, comparable to London. But with 0.4 m2 per person of shopping mall floor area in the periphery, in this respect, Moscow is twice as dense as London and Paris. In terms of spatial density (square metres per hectare), Moscow is six times denser than London both in terms of street retail and in terms of shopping malls.

MOSCOW

E N O U G H

R E T A I L

These quantitative comparisons between Moscow, London and Paris should be coupled with qualitative analysis, to get an accurate picture of retail provision. Qualitative analysis was, however, not undertaken in this study due to the lack of precise data for Moscow. There is a clear need to conduct “retail health checks”, district by district, to assess retail provision. London has established these health checks against a list of official parameters, within an overall retail strategy at the city level. A similar framework would greatly improve our understanding of the retail landscape and what the city government should support, or, on the contrary, regulate in terms of new construction or regeneration projects.

17,941,780 sqm

1,48 sqm / ppl

Center

sqm

total retail

2,546,500

street retail shop. malls dep. stores

2,081,900 403,900 60,700

82% 16% 0.2%

Periphery

sqm

total retail

15,395,280

street retail shop. malls

10,933,710 4,461,570

71% 29%

sqm / ppl

sqm / ha

3.6

385

0.1

sqm / ppl

sqm / ha

1.3

187

0.4

R E TA I L & T H E C I T Y

PA R I S

LONDON

6,328,205 sqm

0.95 sqm / ppl

Center

sqm

total retail

3,085,000

street retail shop. malls dep. stores

2,478,000 400,000 207,000

80% 13% 0.7%

Periphery

sqm

total retail

3,243,205

street retail shop. malls

1,457,205 1,786,000

45% 55%

7,472,185 sqm

sqm / ppl

sqm / ha

1.4

294

0.4

sqm / ppl

sqm / ha

0.7

0.2

0.9 sqm / ppl

Center

sqm

total retail

3,810,966

street retail shop. malls dep. stores

3,250,966 300,000 260,000

85% 0.8% 0.7%

Periphery

sqm

total retail

3,661,219

street retail shop. malls

2,561,219 1,100,000

70% 30%

sqm / ppl

sqm / ha

1.3

119

0.1

sqm / ppl

sqm / ha

0.8

0.2

Source: APUR — «L’evolution des Commerces a Paris» (2011) E N O U G H

R E T A I L

R E TA I L & T H E C I T Y

W H AT I S A “ M O D E R N F O R M AT ” ? Neighbourhood

Retail Parks & Others

Community

9.9%

14%

IN CO

ST R

17.

32.3%

21.6%

20.7%

ION

STO

21.5%

Regional

Super Regional

Penetration of Modern Trade, 2012 81 68

TU RK EY

US A

G ERMA NY

B RAZIL

Source: CBRE «Moscow Retail Property Market», 2013

E N O U G H

R E T A I L

INDIA

CHINA

RUSS IA

FRA NCE

“Modern Format” is a term commonly used by retail consultants to describe various forms of retail which have emerged over the last century, and as a standard for the sale of a variety of goods under one roof, with extensive customer service, and impeccably presented merchandise. Typically, “modern format” would refer to a supermarket as a large food store of at least 400 square metres in size, where the bulk of sales is under the self-service system. Within the world of retailers and consultants, the term “modern format” has been also used as a communication tool to promote large-scale hypermarkets, in opposition to traditional, small scale street retail. In Moscow, more than 70% of the new construction of modern formats are regional or superregional hypermarkets or malls, showing a clear trend. But how modern are these formats? In Europe and in the US, we can see the opposite trend, with neighbourhood, urban, small scale supermarkets being the new preferred format for new construction. Phil Clarke, CEO of UK’s leading supermarket chain Tesco, acknowledged this evolution in 2012: “In this new world, retail will not be about buying large swathes of new real estate, but about how we, as businesses, relate to our customers, their communities and the countries in which we operate. The space race is over.”1

R E TA I L & T H E C I T Y

M O D E R N O R O U T D AT E D ?

E N O U G H

R E T A I L

R E TA I L & T H E C I T Y

INDEPENDENT VS. CHAINS ?1 2001

2007

2014

2025?

95%

70%

55%

20%

Average in Europe, %

In 2014 approximately 55% of retail activities in Moscow are still operated by independent retailers2 A 10% shift towards national and international chain networks in Moscow would provide a loss for the local economy of approximately 90 billion roubles per year3

1 — www.moscow.ru 2 — www.grandars.ru 3 — Note: According to the Ministry of Economic Development, in 2012, retail trade accounted to 3,639 billion roubles. A research study in Portland (“Going Local: Quantifying the Economic Impacts of Buying from Locally Owned Businesses in Portland”, Maine Center for Economic Policy, December 2011) has shown that for 1 dollar spent in independent local retail businesses, 0.58 is going to the local economy compared to 0.33 for national and international chains. The estimation for Moscow was based on the assumption of a similar ratio.

E N O U G H

R E T A I L

R E TA I L & T H E C I T Y

P I C K Y O U R R E TA I L . TA K E A S TA N D

E N O U G H

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R E TA I L & T H E C I T Y

WORKING WITH THE “SHADOW”

56 %

44 % Shadow economy

Legitimate economy

1,484,192,160,000 $ GDP

1,888,971,840,000 $ GDP

Source: World Bank, A. T. Kearney, 2012, www.forbes.ru/ investitsii-column/tsennye-bumagi /84332-tenevaya-ekonomika-40-rossiiskogo-vvp-kak-etim-vospolzovatsy

An estimated 44% of Russia’s economy constituted by the “shadow sector”. Due to a lack of existing research on the subject, it is nearly impossible to estimate precisely the amount of “shadow retail” in Moscow. It is however clear to the visitor that Moscow’s streets are densely populated by this informal and often illegal micro-scale retail (see the chapter "Retail Ecosystems”). This form of retail, whilst not participating to the local economy through taxes nor being subject to any forms of regulations, has a certain number of positive qualities, such as participating in the street thereby making it more

E N O U G H

R E T A I L

vibrant, deeply roots with the local community, and providing crucial work opportunities to the under-privileged. On the other hand, Moscow is under-provided official markets, if compared to cities like Paris or London (10 times less approximately). There is a clear opportunity for the local government to start working with the informal sector and provide new physical platforms in the city which could host these activities and regulate them to improve the quality of the goods and services within the tight economic constraints under which these shadow retailers are operating.

R E TA I L & T H E C I T Y

UNDER SUPPLIED

PA R I S

3 / 100,000 ppl

LONDON

2 / 100,000 ppl

MOSCOW

0.4 / 100,000 ppl

E N O U G H

R E T A I L

R E TA I L & T H E C I T Y

ECONOMY 1

CONSUMPTION 1

$ @

Total Retail Sales (billion euros)

Online Retail Share (% of Total Retail Sales)

Shadow Economy (% of National GDP)

Average National Theft (% of Retail Sales)

Private Retail Expenditure (% of private spending )

M O SCOW

5.5

1.74

1,268

6 0.5%

PAR IS

12.1

1.4

11.7

3,594

10 0,3%

108

15.5

1.37

10.2

3,682

9 0.2%

13.4

1.59

8.55

4,437

8 0.2%

1.63

1.4

875

6 0.7%

5.1

0.95

2,640

4 0.2%

LO N D O N

NEW YO R K

ISTAN B U L

HO N G KO N G

1 — www.retailresearch.org 2 — A.T.Kearney — www.forbes.ru 3 — RIA News 2013; Quandl.com 2014 4 — www.numbeo.com 5 — www.expatistan.com 6 — www.amazon.com 7 — www.mystore411.com

E N O U G H

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Average Average National National Alcohol Disposable Consumption Income (liters) (dollars)

Average Meal at MacDonalds (dollars)

The above matrix compares different elements of consumption between six cities: Moscow, Paris, London, New York, Istanbul and Hong Kong. The total amount of retail sales shows that Moscow is still, despite more square metres, a small player compared to the super-retail capital cities of Paris, London and New York. This is of course linked to the amount of disposable income, the number of tourists, and the general level of consumption. It might be also linked to the high prominence of the shadow economy. The share of e-retail, a difficult parameter to estimate

R E TA I L & T H E C I T Y

COST OF GOODS / SERVICES 5

Domestic Beer in Supermarket (dollars)

One pair of jeans Monthly Ticket (ex: Levis 501) Public Transport (dollars) (dollars)

CAFE

Taxi Trip (basic fare for 8 km) (dollars)

Two Cinema Tickets (dollars)

One Cappucino in the Center (dollars)

Dinner for Two at Italian Restaurant (dollars)

Amazon Delivery Number Rate for a St. book of Starbucks per from the US 1M inhabitants (dollars) (dollars)

1.4 0.5%

128 10.1%

46 3.6%

15 1.2%

19 1.5%

5.6 0.4%

102 8%

28.4

2.6

1.9 0.1%

130 3.6%

89 2.5%

23 0.6%

28 0.8%

5.9 0.2%

86 2.4%

7.98

16.5

2.9 0.1%

103 2.8%

213 5.8%

23 0.6%

38 1.0%

4.7 0.1%

107 2.9%

7.98

28.5

2.8 0.1%

63 1.4%

113 2.5%

20 0.5%

27 0.6%

4.3 0.1%

118 2.7%

3.99

22.7

2.2 0.3%

67 7.7%

68 7.8%

8 0.9%

15 1.7%

3.9 0.4%

82 9.4%

7.98

5.7

1.5 0.1%

83 3.1%

63 2.4%

9 0.3%

21 0.8%

4.9 0.2%

149 5.6%

9.98

11.6

according to most studies, is still modest compared with Western capitals, in particular London (above 15% of retail spending). It is worth noting that Muscovites have the largest share of private spending on retail. Regarding the cost of goods, it is clear that Moscow performs well in terms of transport costs but under-performs in terms of food, clothes and entertainment. A dinner for two represents on average 8% of monthly disposable income, compared to 2% in Paris and London. A pair of jeans, with over 10% of monthly disposable income compares to approximately 3% in the same cities.

E N O U G H

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R E TA I L & T H E C I T Y

R E T A I L & T H E C I T Y. 9 R E A S O N S W HY I N T E G R AT I N G R E TA I L S T R AT E G I E S A N D C I T Y PLANNING IS ESSENTIAL Too often retail is considered as the sole realm of the private market. Too often regulations are seen as a burden for investments and economic growth. Too often retail strategies are limited to provide the maximum square meters to the highest bidders. Too often decision makers are embracing simple models with short term benefits. Too often, the laissez-faire is the rule.

Deeply rooted in our urban routine and public activities, retail and the urban environment are intricately linked with mutual effects, positive or negative. There is no city without retail and no retail without the city. Despite intricacies, retail planning and urban planning are working within silo professions, often adopting confrontational and simplistic approaches. One would represent only the interest of a private group, only concerned with returns on investment. The other would represent the interest of the general public distanced from the economic realities. Right against Left. Advocates of the free market against supporters of the regulating state. Keeping the two spheres separate is one of the biggest mistakes in current city management and urban planning practices.

E N O U G H

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#1 Retail Impacts Public Spaces...

Retail can be a major player of urban vibrancy or contribute to sterile mono-functional zones and wide areas of parking lots. Shops animate the surroundings and provide “eyes on the street” for safer environment.

#2 ... And Public Spaces Impact Retail

Location, Location, Location. Beyond evident accessibility parameters, the quality of the urban environment largely determines the success of a shop. Case studies in the UK have shown that well-planned improvements to public spaces can boost footfall up to 40% and retail sales of 10–25%.

#3 Retail Shapes the Pedestrian Experience

The ground floor of a building, occupied by shops, can be considered as the city plinth. It might cover only 10% of the building but it determines 90% of the building’s contribution to the experience of the environment. It ensures the essential permeability between public and private realm and has the power to transform the public realm from the space of flows into a social space. There is a growing recognition of the need to shift our attention from the traditional bird-eye view perspective of city planning to the pedestrian eye level, 5km/h pace and user-based experience.

#4 Retail Generates Traffic

Compact or distributed, car-based or public transport based, the various forms of retail can generate radically different traffic congestion issues for the city. More than shops, retail is also a distribution process. A study on Regent Street in London, one of the most important retail streets in Europe, has shown that deliveries represent up to 35% of the total traffic during peak hours. A better management initiative initiated by the public authorities and adopted by local retailers on this central street has reduced traffic by 80%.

R E TA I L & T H E C I T Y

#5 Retail is a Fierce Ecosystem with Endangered Species

In retail economics, the bigger means often the better. Large retail groups distort competition, get support from local authorities and ultimately eat up local small scale businesses. A study in the UK town of Fakenham found that town-centre food retailers experienced a 64% decline in market share following the opening of an out-oftown supermarket. The number of vacant shops rose by 33%. Encouraging street retail versus large out-of-town shopping malls through smart regulations is a growing necessity to ensure a diverse, bottom-up and distributed retail landscape.

#6 Retail Gives Back to Local Economy... Or Not

Shops are an important medium for fluid local economies, where values are exchanged and created. Shops can have extremely important long-term value creation within a street or a district. However, not all the various forms of retail contribute equally to the local economy. A study in Portland showed that every $100 spent at locally owned businesses contributes an additional $58 to the local economy. By comparison, $100 spent at a chain store yields just $33 in local economic impact.

#8 Retail as an Agent of Globalization or a Local Player

A city is a sum of layers and layers of historical uses, practices and interventions. Preserving, promoting and enhancing a district’s identity is one of the main strategies of contemporary urban planning. Retail can be a powerful support for local identity or a destructive agent of globalization and producer of generic spaces.

#9 Retail as a Major Catalyst of Change

Urban regeneration projects require important upfront investments and rely on fragile business models where benefits for the citizens can rarely be correctly estimated. Retail can be a powerful investment lever and foster changes on the ground through carefully regulated public-private partnerships. For example, Westfield Stratford, a new 1.45 billion UK pound investment into Europe’s now biggest shopping center, included a 250 million pound of infrastructure investment for the public (bridges, stations, etc.).

#7 Retail Between Public and Private Borders

Once strictly limited to shop and facade advertisement, retail is now increasingly present in the public realm, through pop-up installations, sponsored events, privatization of public spaces and invasive street advertisements. These spatial intrusions can have positive impacts such as summer extensions of cafe terraces or rooftop extensions, but can be intrusive, restrict access and impoverish public spaces.

E N O U G H

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R E TA I L & T H E C I T Y

WA R M E R C I T Y P L I N T H S Extract from «City at the Eye Level»

(2012, Eburon Academic Publishers, P.13–19) by Hans Karssenberg & Jeroen Laven

A P L I N T H I S T H E G R O U N D FLO O R O F A B U I L D I N G. It is a building’s most crucial part for the city at eye level. What do you as a pedestrian experience when you look around? Cityscape matters, especially through small shops with an open character. One can see people shop, sit, drink, eat, argue, try on clothes, show off, be together as bored and frustrated couples, or as happy as one can be with one another. Because of the plinths, we have access to people and their presentation of self.

E N O U G H

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R E TA I L & T H E C I T Y

It is not only the human comedy one can experience in these places. Seeing others is seeing oneself and thus becomes part of our ongoing identity project. Plinths not only create a distinctive social experience but also a unique physical one. For instance because of open plinths we are penetrated by the smell of products that are sold, such as fresh bread, vegetables, flowers, coffee, and food from all corners of the world. And we also have the sensation of touching tomatoes, apples, shoes, clothes, books and so on. Another typical aspect of the physical experience of plinths is locomotion. In a street with small shops and open façades one can wander out of a shop into the street and vice versa. T H I S G O E S WI T H T H E S E N S AT I O N O F C H O I C E, FRE E D O M , A N D I N D IVI D U A L I T Y. One can follow the attraction one feels when passing a store. And there is also the autonomy of the quick escape; it is just a few steps away. A small shop with an open façade makes one feel connected to the city, the street, where one can experience the freedom of diversity, breathe fresh air and feel the sunshine. P U B L I C L I FE I S A L S O A B O U T O B S E RVI N G O B J E C T S.

E N O U G H

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R E TA I L & T H E C I T Y

It is the joy of looking at products we desire — beautiful, delicious, funny, remarkable, exotic goods. Looking at products through the window of a plinth can also become a collective experience; we want to share our findings with our friends. We talk about the music we like, the movies we want to see, people advice us, sometime strangers. These places are the breeding grounds of small transient communities, which connect us to the city and make us feel at home. The fundamental quality which is added to urban public life by small shops with open façades is its permeability, the partial I N T E G R AT I O N O F P U B L I C ( S T RE E T ) A N D P RIVAT E ( S H O P ). Small shops with open façades not only create the context for the warm city, but allow for movement between the public and private. Public life makes it possible to traverse these borders and go from one experience into the other. This oscillation, this movement, creates an experience opposite of the cold, fixed, and static urban situation, where one feels stuck in non-involvement and estrangement.

E N O U G H

R E T A I L

R E TA I L & T H E C I T Y

This movement creates interaction, meaning, histories, and narratives through which we become attached to the city, its possibilities, and its transformations. Although we all realize their importance, good plinths are not in the least self- evident. The coming decades will ad more economic pressure to plinths, and local authorities and property owners will have to collaborate if they want good streets. To put it differently: attaining good plinths and A Â G O O D U RB A N E X P E RI E N C E RE Q U I RE S A N AC T IVE G OVE R N M E N T A N D A N AC T IVE M A RKE T. A strategy is needed in which governments, developers, designers, owners, and renters each play their own parts. And because each neighbourhood and each street is different, they each require aÂ different strategy.

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

Kirill Lebedev

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

The aim of this research was to classify and map all the sites comprising macro habitat ofÂ retail in Moscow. Retail provision and distribution was in focus, utilising overlaid population density maps and gravitation maps, identifying various formats and their catchment (influence) radius. Case study areas were selected to show anomalies in retail distribution.

E N O U G H

R E T A I L

1 SQM = 1 PERSON ENOUGH?

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

Moscow is city of retail. Its fabric is pierced with retail through and through. Notwithstanding its omnipresence, all shopping sites can be roughly divided into two major categories: macro and micro. The aim of this research was to classify and map all the sites comprising the macro habitat. In general, such sites can be distributed into four main groups: shopping centres, markets, kiosks, and street retail. Each group has its own gravitation zone and catchment area which were calculated and graphically illustrated on the map. After defining and mapping all macro elements, it is possible to classify and reflect upon the relationship between them. Moreover, one of the central aims of the research was to consider the question of whether there is enough retail in Moscow, and whether there are places in the city where there is not enough retail. Overall, the following work demonstrates that the degree of retail density in the capital is fairly high. However, as shown on the map of retail density, this trend is not homogeneous as clusters of retail are not spread evenly throughout the city. Finally, in the process of this research, several anomalous zones were identified. These zones were established by means of comparison of the retail density map and the map of population density. The features and characteristics of these sites are further investigated and described in the following chapter.

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

Shopping Centers Markets Kiosks Street Retail

Metro Stations

E N O U G H

R E T A I L

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

G R AV I TAT I O N M A P S The calculation of gravitation maps is based on retail catchment areas. This area calculates according to a radius of pedestrian and transport accessibility. Different agents (retail habitats) have different radii. Overlaying circles made according to catchment radii, we can produce gravitation maps of retail.

R = average speed x catchment area travel time S T R E E T R E TA I L

Retail Habitats and Their Respective Catchment Radii

MARKETS

Convenience centre 5–10 minutes by foot Neighbourhood centre 5–10 minutes by transport Community centre 10–20 minutes by transport Super community centre 20–30 minutes by transport Regional centre 30–40 minutes by transport Super regional centre 1.5 hours by transport Kiosk 5 minutes by foot Street retail 10 minutes by foot Market 20 minutes by transport

KIOSKS

E N O U G H

R E T A I L

E N O U G H

S H O P P I N G H A B I TAT S

SHOPPING CENTERS

MARKETS

PHARMACIES

MUSIC SHOPS

BROTHELS

HAIRCUT

R E T A I L

S H O P P I N G H A B I TAT S

KIOSKS

FOOD SHOPS

B A R S & R E S TA U R A N T S

BANKS

TOURIST OFFICES

BOOK SHOPS

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

Density of Retail

Low Retail — High Population

E N O U G H

R E T A I L

High Retail — Low Population

Metro Stations

S H O P P I N G H A B I TAT S

Density of Population

E N O U G H

R E T A I L

ANOMALIES Shopping Centers Street Retail Kiosks Markets Metro Stations

UNSEIZED

M A R K E T â&#x20AC;&#x2122; S D E AT H

E N O U G H

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S H O P P I N G H A B I TAT S

TOO BIG

M A L L S I N VA S I O N

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

TOO BIG

M A L L S I N VA S I O N

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

UNSEIZED

M A R K E T ’ S D E AT H

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

TOO BIG Rostokino district is situated in north-east Moscow. In the forties and fifties (fig. 3), aÂ number of residential neighbourhoods were constructed there. At the moment, eleven factories are located in Rostokino. Due to the industrial focus of this district, the population density of the area is very low. However, the construction of a new super regional shopping centre near the industrial zone has initiated a rapid increase in the number of local residents as well as in population density. Golden Babylon (fig. 1) is the largest megamall in Moscow, accommodating more than 450 tenants, offering the largest range of products from different brands, as well as three cinemas and a DinoPark (fig. 5). Furthermore, there is another big shopping mall located right in front of the Golden Babylon, called Metro. The presence of all these shopping malls has stimulated a major influx of people in the district, causing significant problems with transportation. 1

E N O U G H

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Shopping Center Pharmacies Food Shops CafĂŠs Banks Kiosks

Area: 1.6 km2 Population: 8,000 Average Population Density: 3,750 persons per km2 Average Retail Area: 190,000 m2

Average Retail Density: 26.6 sqm/ppl

S H O P P I N G H A B I TAT S

2 4

E N O U G H

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S H O P P I N G H A B I TAT S

UNSEIZED In the beginning of 1960, this area hosted a number of neighbourhoods of five to twelve storey buildings. Also, in the same period, several scientific institutions were constructed around the living quarters. Now, some of the old buildings have been converted into 18-20 storey apartment blocks. Surprisingly, there are not many points of retail in this area. The whole district is mostly supplied with products and services by street retail (namely, there are 17 food shops, one small agricultural market, three pharmacies, two banks and seven kiosks). It is interesting that agglomerations of retail in this area are concentrated on the ground floors of 14â&#x20AC;&#x201C;20 storey buildings (see fig. 1, fig.2, fig. 5). In this regard, this area is one of the few districts in Moscow that is not serviced by shopping centres of any type. This provides this district a unique opportunity to experiment with the formats and scale of retail, allowing it to explore a retail environment that is not based on shopping centres or any macro-scale elements of retail. 1

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Markets Pharmacies Food Shops Haircuts Banks Kiosks

Area: 2.2 km2 Population: 18,520 Average Population Density: 9,264 persons per km2 Average Retail Area: 8,000 m2

Average Retail Density: 0.4 sqm/ppl

S H O P P I N G H A B I TAT S

5 4

E N O U G H

R E T A I L

S H O P P I N G H A B I TAT S

M A L L I N VA S I O N The Chertanovo district was built in the late 1980s. It is one of the best examples of a Moscow microraion (see fig. 1). At the beginning of the 21st century, there were very few of retail sites in this area. This region was master-planned as a microraion, with a limited number of street retail spots, and some department stores. The whole neighbourhood is supplied with food and other goods by agricultural and electronics markets. In the period from 2004 to the present day, 14 shopping centres have been built in the area. Two of them, respectively named “Retail Park” (see fig. 5) and “Globus City” (see fig. 4) are particularly large, with more than 25,000m2 of retail space between them. There are also seven community centres in Chertanovo (see fig. 2), with more than 17,000m2 of retail space in total. Recently the old electronics market was converted into a shopping centre as well. Moreover, a spacious agricultural market will also be constructed before 2015. The Chertanovo area was marked as anomalous not only because of a relatively large percentage of retail density for a microraion, but also because of the large number of shopping centres located there. 1

E N O U G H

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Shopping Centers Markets Pharmacies Food Shops Haircuts Banks Kiosks

Area: 7.9 km2 Population: 111,967 Average Population Density: 17,183.7 persons per km2 Average Retail Area: 85,000 m2

Average Retail Density: 2.4 sqm/ppl

S H O P P I N G H A B I TAT S

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S H O P P I N G H A B I TAT S

D E AT H O F A M A R K E T Matveyevskoe district was built in the late 1960s, according to the design of Evgeniy Stam — a Soviet town planner. Its design features a combination of “horizontal” and “fan” types of building structures. According to the design, only two food stores were planned to be built in the area, leading to the appearance of the Matveyevsky market (see fig. 1). This market is the cheapest and most accessible way to purchase food and other goods in the district. More than 5,000 migrants work every day in the Matveyevsky market (see fig. 4). In July 2013, there was an incident in which a policeman was beaten by a migrant, and this was widely reported in the media. Due to this occurrence, the (incidentally illegal) market will be demolished soon. On the northern side of the district, there is a large, dilapidated building (see fig. 2). OriginalMarkets

ly, it was planned as a big sport complex, but then was redesigned as a shopping centre. For now, no one knows what will be done to this “monstrosity”. A small convenience centre, called “Tuk-Tuk”, is the only place (except for the market) to buy clothes and goods for children (see fig. 5). Also there is a supermarket and a cafe on the first floor of this centre. In the heart of the district, retail locations are rare, giving one a feeling that this district is not part of Moscow, but rather it is a representation of the Soviet Garden City. Accordingly, the inhabitants of Matveyevskoe don’t necessarily require additional retail sites, since the quality of the existing retail environment could be made better. In general, the district is very quiet and green, making it seem that the locals are unaware of the fact that they do not have enough retail.

Area: 1.9 km2 Population: 12,000 Average Population Density: 6,315 persons per km2 Average Retail Area: 6,000 m2

Pharmacies Food Shops Haircuts

Average Retail Density: 0.3 sqm/ppl

Banks Kiosks

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5 3

1 4

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SHOPPING ALL: From Quantit y to Qualit y

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In 2014–2015, Moscow will be saturated by new, superregional and regional shopping malls. With this trend, the Russian capital will overtake London in the total amount of retail space used by the malls. The US has already experienced that with high competition, some shopping malls have lost their attractiveness and are forced to adapt to new circumstances. Many of them simply died. In this research an analysis of the current situation in Moscow is presented, focusing on the most successful shopping malls and showing the problems in quality that they have. Today, location is not the main reason for choosing a mall, and quality is becoming more important, so those highly ranked malls will lose their attractiveness and will fight for their consumers.

Pavel Ilyichev

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A R E T H E Y R E A L LY A L L T H E S A M E ?

We Eat The Same Meal We Eat The Same Meal We Eat The Same

We Wear the Same Clothes We Wear the Same Clothes We Wear

We Enjoy the Same Entertainment We Enjoy the Same Entertainm

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Same Meal We Eat The Same Meal We Eat The Same Meal We Eat T

Wear the Same Clothes We Wear the Same Clothes We Wear the Sam

tainment We Enjoy the Same Entertainment We Enjoy the Same En

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L I F E A N D D E AT H O F S H O P P I N G M A L L S “The shopping mall is a building with a leased or sales area not less than 5,000 square metres, of high-quality construction which has a clear concept, reduced to a minimum loss of space. But the concept is quite effective for the potential consumers to navigate and move around, and also includes high quality and effective management of the facility.” Jones Lang LaSalle

Everything has a lifecycle. Appearance, growth, stabilization, stagnation, disappearance — this is the typical process of how things are organized in nature. Shopping malls are no exception. In fact, the lifecycle of a shopping mall might be compared with any other lifecycle. Its goal is to stimulate people into spending more money, and this is the only reason why a mall tries to be the best. Shopping halls, cafes, restaurants, entertainment — all of these typical elements motivate us to stay there for hours and consume as much as we can. Some of the malls have already taken advantage of this and have gotten an excellent “place under the sun”. But time is passing, and new species have appeared. According to the laws of nature the most maladapted die off. It seems that this moment is almost here. In contrast to wildlife, shopping malls have a chance to extend their lifecycle. Today’s developers and managers foresaw that, and look forward to making improvements to the mall. According to Ronald Altoon, the owner and chief executive of Altoon & Partners, a development company, the competition in the market requires that significant changes or at least small improvements in the concept of a shopping mall be made every 3–4 years. With growing competition, the possibility of being always up-to-date and fresh is a valuable privilege.

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This fact refers to a Moscow where the market of quality shopping malls with a unique concept and attractive entertainment is growing rapidly. Thus, the problems which the US shopping malls have already met — foot traffic decreases and the death of the least adapted malls — can happen in Russia as well. From that perspective, stakeholders should think more about how to struggle to overcome market competition and therefore attract more consumers. Lifecycles fluctuate. That means that with constant support, and adaptation of trade areas to the people’s needs and interests in times of stagnation will lead to successful performance for a long period. Absence or even underestimation of these modern realms may provoke difficulties with profitability and further negative circumstances. Moscow’s history of shopping sites can be divided into three main parts: the era of department stores, the era of univermags, and the era of the modern shopping mall. According to historical evaluation, the time of department stores and univermags were characterised by constant demand due to the limited number of stores and relevant locations. Generally department stores are located in the very city centre and big univermags were distributed around all of Moscow. They didn’t require a lot of attention to concept or design — the building itself and architecture were the main concepts. And long lifecycles without reconstruction or significant redevelopment means their constant high attractiveness for the citizens. The shopping mall era is, on the contrary, demonstrating a clear shrinkage of lifecycle caused mainly by growing competition. That fact forces retailers to rethink and look from another angle how to succeed in a new Moscow retail environment.

SHOPPING MALLS

Everything has a lifecycle. Appearance, growth, stabilization, stagnation, disappearance â&#x20AC;&#x201D; this is a typical process of how things are organized in nature. AndÂ shopping malls are not an exception

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H I S T O R I C A L D I S C Past O U RFuture SE Department Store Era

1850s–1950s During this time period, the first arcade stores were built. The original model was borrowed from France and Britain. They significantly differed from what was Detsky Miravailable before with a supermarket-type central customer check-out area with a strong retail function. Sometimes sales Moskva counters were integrated within each department. Despite their long history, most of Leipzhig them still exist and continue to trade.

Okhotny ryad Atrium Mega

Univermag Era Pervomaisky

Evropeisky

1950s–1990s Belgrad Built in the Soviet era for general public needs. Its functionality is quite similar to department stores, but is different in terms of architecture. SovietMoskovsky univermags are very well recognized for their authentic view and selling national products. The name could be translated as “universal supermarket”. The naming of the stores is generally related to different cities and capitals. For instance, Moskva, Leipzig, Beograd, etc.

Zolotoy Vavilon Rostokino Vegas Afimall City

Vnukovo Fashion House Belaya Dacha

Barvikha Luxury Village

Shopping Mall Era

1960

1990s–to present 1980 After 1970 the collapse of the Soviet Union, 1990 the growing Russian market has borrowed the Western model of shopping malls, which have emerged in many empty or hidden spaces in Moscow. Today malls are diversifying, which can be explained by growing saturation as well as strong competition. We can notice such newto-Russia retail formats as outlet villages, lifestyle centres, and so on. All of these mall typologies unite under one single characteristic — shopping as an inherent part of urban life. fully integrated into daily routines.

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2000

2010

2020

2030

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Department Store

Univermag

Shopping Malls

MALL

LIFESTYLE CENTER

OUTLET VILLAGE

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LIFECYCLES OF MOSCOW SHOPPING SITES Modern malls are designed to be reconstructed or restyled each 5â&#x20AC;&#x201C;6 Years

Eliseevsky

Voyentorg

GUM TSUM Department Stores Department Stores Univermags Shopping malls Malls Lifestyle Centres Outlet Villages

1950

Lifecycle one more reconstruction opening

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reconstruction or restyling

1880

1890

1900

1910

1920

1930

1940

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Past

Detsky Mir

Future

Okhotny ryad

Moskva

Atrium Mega

Leipzhig Pervomaisky

Evropeisky

Belgrad

Zolotoy Vavilon Rostokino Vegas

Moskovsky

Afimall City

Vnukovo Fashion House Belaya Dacha

Barvikha Luxury Village 1940

1950

1960

1970

1980

1990

2000

2010

2020

2030

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WHERE IS THE LIMIT? Giants Are Coming

Enough shopping malls? For citizens — maybe. For developers Moscow still is an unsaturated market and new quality retail sites appearing like mushrooms. The city will get new constructions with a total amount of 1,5 mln sqm what is higher when in London and in such rapidly growing markets as Beijing. Moscow mall area will be equal to 4,5 mln sqm which is approximately 400 football fields. After saturation with neighbourhood and community stores developers are tending to focus on huge projects. The transformation of retail into lifestyle and entertainment led focusing on giant shopping malls. According to existing data the average size of a mall has increased in 1,5 times from 38,000 sqm in 1991–2013 to 57,000 sqm in 2014–2015. Catchment area of superregional and regional malls will be redistributed. For example, with completion of Avia Park mall located in North-West of Moscow the one of the most successful malls, Metropolis, could lose its consumers in 2 times. These giants are very similar in their content and placement so we can call them malls-substitutes. If a general consumer who is living in approximately the same distance from two of them will decide to go shopping he or she will choose the one which is more pleasant (despite of the tenant mix and some subjective personal criteria). The same is happening with regional malls which are marked on the maps. The competition especially increasing in the West and South-West of Moscow where main giants will be appear. Substitute malls will need distinctions. It might be a unique entertainment part, “rare” shops, relax atmosphere and many other important parameters.

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It’s All About Quality

Global consulting companies as well as developers mostly looking on financial indicators such as turnover, profitability, football and others. But when the competition is growing the main criteria for comparison becomes quality. Only few of them seriously taking it into account in Moscow. Partner from Knight Frank real estate company says that by 2016 Moscow shopping malls will meet the problem of oversupply which will led to the closing of the most unadapted ones. Understanding that I decided to see what is the real value of the most visited malls from the quality perspective.

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The average size of Moscow mall will be increased in 1,5 times

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Sources: Colliers Internationa; Knight Frank

Source: Magazin Magazinov

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GIANTS ARE COMING GLA Dynamics

Moscow Malls = 400 x Football Fields

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M O S C O W M A L L S H E AT M A P 2014

Number of shoppingÂ malls (superregional and regional) in the catchment area !

! !

! ! !

! !

! ! !

! !

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2016

Number of shoppingÂ malls (superregional and regional) in the catchment area

! !

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SUPERREGIONAL MALLS 2014

Mega Khimki

RIO on Dmitrovskoye shosse

! !

Zolotoy Vavilon Rostokino

Metropolis

Afimall City

Gorod Lefortovo

Gorod on Ryazanka

Mega Tyoply Stan

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RIO Reutov

Vegas

Mega Belaya Dacha

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2016

Mega Khimki

RIO on Dmitrovskoye shosse

! !

Vegas City

Metropolis

AviaPark

! ! !

Zolotoy Vavilon Rostokino

Afimall CIty

Gorod Lefortovo

Vegas Kuntsevo

Gorod on Ryazanka

River Mall

Mega Tyoply Stan

RIO Reutov

Mega Belaya Dacha

Columbus

Vegas

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100

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REGIONAL MALLS 2014

Otrada

XL-3

Kapitoly Leningradsky

WayPark

Kaleidoskop

Schuka

Schyolkovo

! !

Troika

EvroPark

Filion

Evropeisky

Gagarinsky

Kapitoly Vernadsky

Megapolis

Goodzone

! RIO on Lenindradsky pr.

Atrium

Prince Plaza

Global City

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L-153

Oblaka

101

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2016

Otrada

Vesna !

! Kapitoly Leningradsky !

XL-3

WayPark

Kaleidoskop

Schuka

Schyolkovo

EvroPark

Kuntsevo Plaza

Filion

Evropeisky

Atrium

Gagarinsky

Kapitoly Vernadsky

Yugo-Zapad

Reutov Park

Mozaika

Megapolis

Goodzone

RIO on Leningradsky pr.

Nebo

Troika

Slavyanka

Polezhaevsky

L-153

RIO Kievsky

Prince Plaza

Global City

Oblaka

Butovo Mall

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S H O P P I N G M A L L PA R A D O X — L O V E V S H A T E

Exciting Emotional Accessible

Shopping Roots

We are living in a shopping mall era. Today the modern megapolis with its fast and dynamic way of life cannot remain without retail spaces allowing one to easily to get whatever is wanted in one place. Russia as an economically emerging country is booming with new shopping mall construction projects. With the collapse of the Soviet Union, business and international trade development have become the key drivers of their tremendous appearance. Despite the fact that as the Russian language had never had the term “mall”, retail centres and trade areas have been always existed in our country. The predecessors of the modern shopping mall, department stores, were famous throughout the USSR, the most renowned being TSUM and GUM — built in 1857 and 1893 respectively. The location of these within the city has always been the best — views of the Red Square and the Bolshoi Theatre was an extra advantage for attracting citizens of pre-revolutionary Russia. The value of location has become the one of the most important factors in its success.

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Paradox

The shopping mall is like McDonald’s — people criticize it but still tend to visit them repeatedly. “Chain stores contribute far less to the local economy than independent businesses”1, “The most important fact about our shopping malls is that we do not need most of what they sell”2, “Malls, surrounded by parking lots and located far from residential neighbourhoods once encouraged the expansion of car culture”3 — all of these criticisms showthe “dark side of malls”. Nevertheless, when we take a look at the real values of citizens who live in the city, these points lose their stringency. There are several advantages of shopping malls in comparison with street retail: convenience, time savings, and leisure. People are coming to the centre not only to buy products, clothes and other essential goods and services; they go to the big box stores in order to rest, and enjoy time with a whole family. The shopping mall wants to become the city and the city is leaning towards being a shopping mall. Cities are commercialized by retail, and life in the city is associated with the privatization, domestication, and commodification of public space. In

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Addictive Stressful Overcrowded

such a way the urban landscape is becoming fragmented. Retail space and shopping malls in particular is a part of a city and a contributing factor to the integration of people and the possibility of interaction. By 2016, Moscow will gain extra retail space, and will become the most “malled” European city overtaking London4. It allows for the claim that the Russian capital is saturated with mall space. On the one hand, this means that we will finally meet consumers demand. On the other hand, the strong competition between malls could create the problems with the amount of foot traffic, and as a consequence — with profitability for some of them.

Entertainment

The transformation of retail space into mixed spaces including entertainment and leisure has been happening during the last two decades in Moscow. Before that, department stores as well as Russian univermags were generally for purchasing goods only. In the late 1990s and early 2000s, when the first quality shopping malls were built, the understanding of shopping had started to change. Instead of corridors with shops on both sides

(arcade type) we have seen stores with entertainment, and so-called enlarged “public spaces”, so to speak, areas for socialization and relaxation in the atmosphere of shopping. The most popular entertainment component at that time were cinemas and bowling. The growing popularity of shopping in the malls among citizens required new approaches to their environment. The value of a unique concept and significant entertainment areas became a competitive advantage in the maturing market. What we can see today is that some shopping malls have transformed into entertainment centres with shops instead of retail with a small entertainment section. The most colourful examples are RIO with the biggest aquarium in Russia, and Vegas City with a covered amusement park. In fact, they are not only compensating the lack of recreation out of the mall. They getting twofold benefits — the recreational part of the venture generates happy consumers and foot traffic for the shopping mall, and it brings financially reliable consumers for the entertainment centres. Apart from that, the value of Moscow malls as a public space during the frosty winter and hot summer cannot be underestimated.

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E N T E R TA I N M E N T PA R A D I S E Unique attractions are organized to increase shopping Standardization of retail formats leads to the cookie-cutmall foot traffic. Usually they are managed by the landter format of shopping malls. Every shopping mall offers lords as there are no professional operators. Yet, unique standard options (2D cinemas, the usual attractions, types of entertainment are still rare for several reasons: game zones, or bowling) ,presents little in a way of entertainment appeal, and this, as a result, causes the location — Technical characteristics of the buildings can reof the shopping mall to become the major driving or “pull” strict certain types of unique entertainment factor for visitors. Entertainment standardization in Mos— Although unique entertainment impacts foot traffic, cow is following a development path very similar to that repeat attendance by the city’s population is low of European shopping malls. Therefore, Russian develop— Exclusive attractions are expensive to organize and ers are trying to diversify entertainment services. operate, and have low yields Some developers are betting on fresh interpreta— As unique appeal diminishes, there will be a need to tions of familiar tenant formats. For example, Filion is change, aggravated by the building technical characattracting customers with a new family amusement park, teristics. So, decisions regarding unique entertainHappylon, which was founded by the Kazakhstan-based ment in shopping malls are left to landlords Agat Group. It is the first theme park of its type in Russia. Agat Group operates individually-themed (magic, pirates, The major types of entertainment are still cinemas, gothic, or jungle) amusement parks, thereby making each bowling clubs, and amusement parks. The inclusion of one unique. As there is competition among shopping malls, devel- an entertainment component in a shopping mall tenant mix has become the rule for a successful shopping mall. opers are to come up with new amusement components But when they have similar attractions and entertainthat will allow them to find their market niche and attract ment, the need for something new is more apparent. more customer interest. The newly opened Vegas mall Apart from cinema, to survive in the competitive Russian offers a theme park with a Ferris wheel and rock climbing environment, shopping malls have started to offer unique area. Among foreign examples are a vertical wind tunnel and artificial ski slopes, like Ski Dubai, which is construct- entertainment components, with Vegas Park taking an advantage through its initiative.5 ed over the parking structure at Mall of the Emirates in Dubai. It features real snow and a 366 metre indoor ski In order to see what the differences are between the slope with five ski runs of varying degrees of difficulty, most visited Moscow shopping malls, we conducted reas well as toboggan runs, sledding hills, and a tubing run. search work based on fieldtrips and detailed analysis. The The attractions can even be non-profit, similar to the selected sites are malls with the highest footfall accordaquarium at the Dubai Mall. ing to Colliers International6 and Franchexpert7 ratings. Design can also serve as an attraction, i.e. fountains, decorations, and gardens, to name a few. For example, the Afimall City has a glass dome (with a total area of 10,000 metres square), and a fountain in the central atrium that sends a stream of water 23 meters into the air every few minutes.

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MALLS IN FOCUS

1. VEGAS

2. AFIMALL CITY

3. EVROPEISKY

4 . AT R I U M

5. MEGA KHIMKI

6. GAGARINSKY

7. G O R O D

8 . Z O L O T O Y VAV I L O N

9. METROPLIS

ROSTOKINO

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#20 E VA L U AT I N G THE BEST: 20 URBAN CRITERIA The first wave of Western shopping malls began to penetrate the market in the 1990s and early 2000s. The good news is that there was no competition and experience in developing such projects. It allowed for many new commercial companies to practice their skills in projects which were never constructed in the Soviet era. The bad news is that the best locations in the inner city and its environs were occupied in that time, and today’s professional developers can only imagine and dream about these lost locational opportunities. New construction projects tend to be located farther away from the city centre. What is interesting, despite their popularity and profitability, is that there are many differences and undeveloped elements which might be worthwhile for the people now, but definitely will make sense when new competitors-substitutes will be opened and attract with them a higher quality of experience. In order to clarify what the problem zones are of the most popular malls, the following research was conducted. It is based on the most visited Moscow malls according to Colliers International and Franchexpert. 9 malls are selected and 20 criteria for comparison are defined. There are three categories of the criteria: quality of integration, level of generosity, and respect to the customer. According to the results of the research, almost each of the top-rated shopping malls has problem zones by our criteria. Some of them are even below the average Moscow shopping mall in terms of the quality of experience which consumers tend to receive there. That image clearly shows that location played and is still playing one of the main roles in the success of a mall. Nevertheless, such cherry-picking will not exist for very long. Moscow is saturated with retail areas and competition is changing the previously highly profitable shopping malls into risky ventures.

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I N T E G R AT I O N N O T I S O L AT I O N ! Large shopping malls and other big boxes operate in isolation from the rest of the city they are typically built in large plots, are surrounded by car parking, and in an out-of-town location. This reinforces the car dependent culture and degrades the quality of public spaces around the shopping mall. There is a need to change the paradigm for big boxes — it should be integrated into a larger scale mixed-use development (retail-led regeneration), promoting compact, transit-oriented solutions integrated with public transport.

#1 Mix-It!

Rating: integration of mixed-uses (Low — Medium — High) A mixed-use development is one of the most important characteristics of contemporary large retail development. The benefits are numerous: a local base of clients, round-the-clock use, and necessary integration, which requires a higher quality of architecture and shared public spaces.

#2 Car Shortcuts

Rating: distance to highway (m) Whilst priority should be given to public transport accessibility, excellent car accessibility is crucial for smooth integration into the community, and it avoids traffic related issues.

#3 Metro Exit & Mall Entrance Rating: distance to metro station (m)

Transit-Oriented Development (TOD) prioritizes public transport accessibility and is usually centred around metro stations or the areas immediately around them. Such developments limit the environmental and social impacts of dispersed growth patterns and dramatically reduce the pressure on parking requirements and traffic related issues.

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#7 Keep It Underground

Rating: amount of underground car parking vs surface car parking (Low — Medium — High) Underground car parking or parking within elevated structures avoids expensive surface car parking and allows for compact development.

#8 Local Demand

Rating: residential and office density within a 500 m radius Whilst large malls serve a city-wide or even a regional purpose, local demand should be an important driver of mall development.

#4 Walk-in

Rating: quality and quantity of pedestrian friendly zones around the mall (Low — Medium — High) Quality public spaces and paths surrounding shopping malls encourage pedestrian accessibility and improve the integration of the mall within its immediate context.

#5 Outward-Not-Inward

Rating: amount of active frontage (percentage of total facade)

Active ground floor frontages are defined by the physical or visual permeability between the outside and inside of the mall. Active frontages create more vibrant outdoor public spaces and “open” the mall to the city.

#6 Compactness

Rating: % of building footprint vs plot area Compact development allows for “urban shopping malls”, integrated within the surrounding urban fabric.

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GENEROUS NOT GENERIC! The shopping mall is a part of the city fabric and requires that it take responsibility for the area which is nearby to it. That is why malls should compensate lost opportunities for the city with filling these gaps. To be generous instead of generic allows malls to not only be more attractive to consumers but it also saturates the environment with quality structures and areas.

#11

#9 Generous Public Spaces

Rating: % of outdoor area for public space Quality of outdoor public space by measuring the rest areas around the mall.

#12

#10 Limited Junk Spaces Rating: % of outdoor junk spaces around shopping mall

#12 Indoor Nature

Amount of outdoor parking space and technical areas as a part of shopping mall lease area.

#11 Inside-Outside Rating: % of natural light

Natural light makes a shopping mall more people-friendly, and creates better and positive customer experiences. Natural lights inside of the mall we define as glass roofs or domes, open air spaces, as well as glass walls.

Rating: greenery quality

Quality of indoor greenery, which can be divided into three categories: High — indoor natural greenery and flowers Medium — fake greenery such as trees, grass, flowers Low — no greenery at all

#13 Not-All-the-Same-Feeling Rating: local/global brands

Number of global brands vs. local/national brands. Ratio between Russian and foreign brands (limited to women’s clothing only).

#10 #14 Uniqueness

Rating: amount of “rare” shops (Low — Medium —High) Presence of “rare” shops, which are unique in the city or do not stock brand names High — more than 5 shops Medium — from 1 to 4 shops Low — no “rare” shops at all

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RESPECT NOT DEGRADE! Consumers and citizens in general could examine the shopping mall from two sides — outdoor and indoor. Despite its retail component a mall attracts and creates vibrancy within society through its visual and architectural characteristics. This important element is concentrated in this group with several evaluation criteria. Some are more objective, others seem to be subjective, but all together they show quite widely the image of the experience which people have during their journey inside of a mall.

#18 Not-All-the-Same Shopping #2 Rating: food court quality

The quality of food courts defined by its typology: islands, rows, open space, circle. It is more pleasant to have a private space in this place.

#15 Visual Respect

#19 Not-All-the-Same Shopping #3

Rating: architecture (High — Medium — Low) The appearance of a mall might positively or negatively affect city infrastructure. Quality of architectural volumes and façades of the mall is one of the key visible elements that changes the city.

#16 Cluttered Façade

Rating: the level of emptiness of the façade From outdoors, a shopping mall differs by its advertising on its façades. We included the quantity of advertisement on the façade or its absence as an ordinal evaluation criterion.

#17 Not-All-The-Same Shopping #1

Rating: rest spaces and their quality (Low — Medium —High)

Rating: food court quality

The quality of food courts defined by its typology: islands, rows, open space, circle. It is more pleasant to have a private space in this place.

#20 Consumer Respect

Rating: level of advertising inside (Low — Medium —High) Limited advertising indoors which significantly improves the “unconsumerized” experience and makes shopping more enjoyable.

#17

The quality of rest spaces varies from mall to mall. Most of the time, people go shopping for a long period of time and high quality rest areas are a great contribution to their experience.

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C U S T O M E R- C E N T R I C I T Y M AT R I X

INTEGRATION NOT ISOLATION GENEROUS NOT GENERIC

iu m At r 4.

10%

500

Public Transport Accessibility, m

2 960

Pedestrian Accessibility

10%

20%

35%

Outward-Not-Inward

15%

10%

15%

30%

80%

95%

90%

80%

100%

146 000

125 000

70 000

109 000

15%

20%

60%

20%

10%

Inside-Outside

70%

50%

10%

90%

Indoor Nature

High

Medium

High

Not-All-The-Same-Feeling

90%

80%

85%

High

Medium

Low

20%

10%

Not-All-About-Shopping #1

High

Low

Medium

Not-All-About-Shopping #2

Islands

Rows

Open space

Circle

Not-All-About-Shopping #3

Amusement park

Exhibitions

Club, bowling

Fitness, show

High

Low

Car accessibility, m

Compactness Underground Parking VS Car Parking Sea

Generous Public Spaces Junk Spaces

Uniqueness Visual Respect

RESPECT NOT DEGRADE

Ev ro pe i sk y

30%

Local Demand, ppl.

Cluttered façade

Consumer Respect

R E T A I L

Mixity

E N O U G H

AF IM

Ve ga s

AL LC i ty

Quality of a shopping mall is not significantly related to its success. Location is still the key success factor. But the competition is growing and today’s high performing malls might meet problems in the near future

111

ro po lis et M 9.

Zo Va loto vi y l Ro on st ok in o

Go ro d

M 5.

Ga ga r

in s

Kh im ki eg a

iu m At r 4.

vr op ei sk y

SHOPPING MALLS

10%

50%

5 940

350

4 700

1 600

20%

35%

30%

15%

30%

10%

80%

15%

30%

20%

15%

10%

30%

95%

90%

40%

95%

80%

50%

90%

100%

50%

100%

80%

100%

70 000

109 000

27 000

50 000

105 000

38 000

67 000

20%

60%

30%

15%

10%

15%

80%

10%

60%

20%

50%

10%

90%

30%

20%

30%

80%

Medium

High

Medium

Low

High

80%

85%

80%

70%

50%

80%

85%

High

Low

Medium

Low

Medium

Low

Medium

Low

High

20%

10%

40%

20%

80%

60%

Low

Medium

High

Low

Medium

Open space

Circle

Islands

Open space

Islands

Fitness, shows

Ice skating

5D Cinema

Dinoland

Bowling

Low

Medium

Low

High

lub, bowling Low

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SHOPPING MALLS

A N AT O MY O F T H E B E S T Westfield Stratford is a particular example which demonstrates how a shopping mall might be built with high quality and people-oriented. It is very well planned and detailed in order to satisfy all the specific requirements of demanding consumers. Westfield is the largest urban shopping center in Europe. It is more than a mall, it was designed as a vital piece of connectivity within the larger development of Stratford, fuelled by the 2012 Olympics. It was also a showcase of how public and private infrastructure projects can work together, integrating the mall with new Olympic Park and Stratford regional train station into one coherent development. The retail component supported the huge cost of the initial investment such as the new bridges connecting the pieces together.

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SHOPPING MALLS

MALLS: THE BIGGER THE BETTER Westfield Stratford is a particular example which demonstrates how a shopping mall might be built both of high quality and nonetheless as people-oriented. It is very well planned and detailed in order to satisfy all the specific requirements of demanding consumers. Westfield is the largest urban shopping centre in Europe. It is more than a mall, it was designed as a vital piece within the larger development of Stratford, fuelled by the 2012 Olympics. It was also a showcase of how public and private interests can work together on infrastructure projects, integrating the mall with new Olympic Park and Stratford regional train station into one coherent development. The retail component supported the huge cost of the initial investment such as the new bridges connecting the pieces together. The scale of the development was huge, and the complexity of the mixed-use P3 (public-private partnership) resulted in the creation of an independent Design Review Panel, chaired by internationally acclaimed architect Frank Duffy, which met more than 80 times during the design process. Westfield’s design also consciously respects the strict planning regulations of the larger Stratford development plan; for example, no building was allowed to be more than 110 metres long to ensure a good pedestrian permeability.

“There is more to creating and running a shopping centre than standing back and collecting the rent” John Burton

Director of the Development of Westfield UK

Even though the malls are comparable, a “C” location with an “A” mall is not the same as an “A” location with a “B” mall,” he says. “And location in the mall is quite possibly the most important factor — even more than the mall you are in. As long as you are visible and can catch the shopper’s eye, I think you’ll do well” — anonymous retailer from Entrepreneur.com states. Why is it so excellent? There are many reasons for that. The pedestrian bridge and bus hub are well-integrated into the city fabric so that people can easily access the building from other districts. Also, the train station allows visits from farther afield. The public entrance plaza and green pedestrian corridor creates an amazing

36,500 sqm

1.45 billion

of offices and hotels integrated in the scheme and built by the shopping center

UK pound investment, including 250 million pound of infrastructure investment for the public

185k sqm

of retail and leisure, 300 shops

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parking space for

35 sqm

of retail (Vegas: 1/17 and Evropeisky 1/25)

25%

of shops faces outdoor public spaces!

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“Location in the mall is quite possibly the most important factor — even more than the mall you are in. As long as you are visible and can catch the shopper’s eye, I think you’ll do well” Anonymous retailer, Entrepreneur.com

atmosphere for outdoor rest and relaxation. The active ground floor seduces people to go inside and it does not clutter the whole architecture. It is mixed-use, featuring a hotel, leisure, offices, and even a casino. Direct access via underground is another possibility. Westfield has enough space for parking, and it is all located underground, so its environs do not suffer from it. The Great Eastern Market makes a unique retail experience. Its light, transparent façade is free of advertising. All together it creates a pleasant experience for consumers from the very beginning until the very end. And this is what Moscow shopping mall developers should definitely take into account. A growing number of mall-substitutes has

unavoidably led to the loss of consumers. For instance, Aviapark mall will poach the consumers of Megapolis despite its quite high quality according to our evaluation. So quality and consumer experience in general becomes the only factor which could motivate people to choose a specific mall. The research has shown that there are many opportunities for improvement. Most of Moscow’s quality malls will be renovated in the near future. During this important period, despite the new image creation, the mall managers should also include consumer-centric components into their concept, and together those changes will certainly attract lost consumers back.

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June Williamson

RE T R O FI T T I N G SHOPPING MALLS Interview by Pavel Ilyichev

June Williamson is an archi-

tecture professor at The City College of New York/CUNY. She has taught and practiced in Boston, Salt Lake City, Atlanta, Los Angeles and now, New York City. She was an advisor for Build a Better Burb, an ideas design competition for the suburbs of Long Island, which is documented in her newest book “Designing Suburban Futures.” June is co-author, alongside with Ellen Dunham-Jones, of the book “Retrofitting Suburbia,” the winner of the 2009 PROSE Award for Architecture and Urban Planning from the Association of American Publishers, and her writing has been published in the book “Writing Urbanism: A Design Reader,” “Independent for Life,” and “The Diverse Suburb: History, Politics, Prospects” as well as the journals Places, the Harvard Design Magazine, Urban Land, the Journal of Urbanism, and Thresholds.

According to official statistics, 20 years ago the US reached its peak in shopping mall construction, and this led to the situations where some of them lost their consumers and became empty. Could you tell us more about that? One of the chapters in a book “Retrofitting Suburbia” that I cowrote with Ellen Dunham-Jones deals with shopping malls and we approached that project from a case study perspective. Recognizing that a number of these suburban development types in North America that started getting built after World War II and peripherated in the second half of the 20th century. And there are various reasons once you getting to the history about how they were financed, how a land became available, how suburban municipalities encouraged their construction, the emergence of the interstate highway system. The whole set of factors that shifted the commercial development from the traditional downtown to these peripheral suburban areas. We were observing that a number had failed for a various reasons. And a lot of this had to do with overbuilding. We just really work

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with many breaks on what you can build where or each development within different suburban municipality that didn’t coordinate with one another, so they were in competition with one another. In addition, the developers excluded out a little bit. And a tax system in this country, I don’t know how it works in Moscow, encouraged as well — that people who were developers could basically depreciate their investments over short period of time. So that encouraged building structures that were expected the last long time. Because you could take your profit as long as you paid tenants for the first 20 years, and then it’s someone else’s problem. Again, I don’t know whether that model can be adapted in your country but that certainly what led to overbuilding. Basically developers built more than the market could bear with the expectation that a percentage of their properties would fail. They just built new ones somewhere else. I think one of our messages, and I think this is the message of the Congress for the New Urbanism as well, is that there is no one single solution. We looked at retrofitting and all these case studies and we observed three different strategies being used: RETROFITTING BY REDEVELOPMENT. Those are mixed-use town centres, examples where most of the buildings were torn down. There are some successful ones with an ideal location for taking a large lot and grid it out into several blocks to add housing, offices, still having retail but instead of retail buildings, they have retail on the ground floors with apartments and office space above. REINHABITATION. We call it rehabilitation, but it’s more like adaptive reuse. Julia Christensen is a good example, with “Big Box Reuse” book fitting the category. There is one example in Tennessee that has become the health services for that area. So what used to be a little shop now are clinics. RE-GREENING. Sometimes we are using a combination of strategies. Re-greening means basically demolishing and returning the site to open space. There is one famous well-known mall project in Columbus, Ohio. And there are downtown malls that mimic a suburban mall: a three storey, windowless big box. It’s been torn down and what used to be the mall is now a new park. What lessons from your research could you share in order to be more sustainable? I think that not building malls because they’re not needed is one way for existing ones to survive. Apart from this, I think it has to do with the specialization of developers. You probably are observing this in Russia as well. It’s highly refined in the United States, so if you develop shopping malls — you only develop shopping malls. So if you go in a bid process for some other use there, you are not interested because

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your specialization is in shopping malls. So the mixed-use development is more complicated and they require developers to refine their skills, to be more place-based, and to partner with other developers. In addition, I think the most leverage for that will come from the local planners and stakeholders who know the place, who will be there after developers move on to the next project. In this way, you need to think in a long-term perspective, and you need to be ready to adapt to new circumstances and some new challenges? Yes. You need to anticipate potential failures and what plan B is, plan C. What I think is a smart planning, smart architecture.

“You need to anticipate potential failure and what plan B is, plan C… What I think is a smart planning, smart architecture”

What is your vision of the future of malls within a city? I have to admit — I hate going to malls already, myself. I just go to research. There has been a shift in this country and the International Council of Shopping Centres is all over it, repositioning older mall properties located in relatively affluent areas, and making more money with lifestyle centres. So a lifestyle centre will have a higher percentage of restaurants, it will have entertainment, films, it will be open in the evening, it will have cafés — instead of being enclosed it will be outdoors with sidewalks, and benches, and trees. It will be a place where people go and get ice cream, and often the retailers there are tend to be high-end — so places to get perfume or look at jewellery-boutiques rather than chain stores. What does retail today tell us of our contemporary world? In terms of the future of retail, I think it is undergoing pretty significant shifts and development models are going to be changed dramatically. And I think that it, in some ways, offers a lot of opportunities to shift buildings from commercial uses to other uses: for more housing, for other kinds of charity facilities, senior centres, and parks as I mentioned. On the other hand, we have a lot of experimentation ahead of us, so we may have more “white elephants”. So maybe the subject is more a building experiment. ♦

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ECOSYSTEM

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SPECIES

What is informal? Then what is illegal? The question is: Where does the thin line separating the “light” and the “shadow” in economy lie? What is the social and urban value of informal economy? Should we perceive informal sector as part of our everyday life, rather than deny and fight with it? Should the state make an attempt to integrate the shadow economy into the national economic system, making it work for a common good?

Alina Bibisheva

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SELLERS An Urban Ecosystem

temporary

capital

services

goods

shopping centres C1 C2 C3 C4 C5

peddlers

neighborhood community supercommunity regional superregional

T25 T26 T27 T28

kiosk T1 T2 T3 T4 T5 T6 T7

tobacco/alochol press flowers fish/seefood milk/ice cream bread fruits/vegetables

in offices on a road along the street door to door charity T29 T30 T31 T32 T33

street C6 corridor conseptual non conceptual C7 spontaneous

speculators T34 public property resellers T35 purchase for resale T36 tickets T37 scarce goods

fair

C8 C9 C10 C11

T8 T9 T10 T11

market

market fruits/vegetables fish/seafood meat milk

C12 C13 C14 C15 C16 C17

donated profit church disease animals enviroment

drinks food flowers clothes

electronics clothes flowers domestic furniture construction

vedor machine T12 T13 T14 T15 T16

drinks food flowers electronics cosmetics

leeches T38 T39 T40 T41 T42

public spaces educational institutions pub transport stops governmental institutions embassies

market T17 T18 T19 T20 T21

electronics clothes flowers domestic/furniture construction

cart T22 drinks T23 food T24 flowers

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stolen goods B12 precious metals B10 electronics B11 transport

black market B9 B10 B11 B12

drugs weapon organs gemstones

Hierarchy:

Moscow kingdom

kingdom virtual

services

phylum

goods

kiosk T43 T44 T45 T46 T47 T48 T49

telecom domestic service theatre tickets transportation exchange photo/copy insurance

T59 T60 T61 T62

payment terminal T50 banking T51 transportation T52 telecom

banking transportation telecom advertisment

forecaster T70 T71 T72 T73 T74 T75

horoscope psychic fortune tellers soothsayer clairvoyant medium

V1 V2 V3 V4

mail web-site bank account viruses

T63 T64 T65 T66

insurance fines photo/copy recepies

disabled with children/ pregnant elders with animals religious honest

T76 ambulance T77 privat driver T78 sober driver

abuse of power T67 fake documents T68 kickback T69 bribe

virtual black market

services black market killer intim kidnaping medical services

V5 V6 V7 V8

helper

B9 B10 B11

cyberterrorism pornography weapon

show the road stand in a queue carry luggage renovation repair/installation brother

music video books software

prohibited to use

informal taxi

T79 T80 T81 T82 T83 T84

B9 B10 B11 B12

unlicensed

gazel

beggers T53 T54 T55 T56 T57 T58

online store

hacking

distributors

class

V9 V10 V11 V12 V13

radar bagger anti camera stickers report/dissertation flasher

V14 V15 V16 V17 V17

electronics cosmetics grocery books clothes

V18 V19 V20 V21 V22

banking travel media education telecom

non certified V23 electronics V24 cosmetics V25 fake clothes order standing moving/ nomads family formal informal illegal genus market species V2 radar C -capital T - temporary V - virtual

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SHADY MOSCOW Is informal always illegal? Not necessarily. The shadow economy can be either informal or illegal. The question is: where does the thin line separating the “light” and the “shadow” in the economy lie? Economics conceals a great deal of unexplored and perplexing phenomena, but it is rather difficult to come across an equally striking example as the shadow economy. It seems that the pace and scale of the dissemination of the “shady” force and the degree of comprehension of this topic follow a pattern of negative correlation. In other words, they are incomparable. It should be noted that the shadow economy is commonly divided into informal and illegal practices. At first glance, these concepts may appear to be identical, but in actuality, they represent different processes and activities. In most cases, informal economic activities are permitted by law, but they are frequently disguised as legal or minimized in their volume in order to evade the payment of taxes and social financial contributions, and to dodge regulations on labour protection and the implementation of sanitary norms along with a multitude of other regulations, payments, and rules. Naturally, this leads to the violation of the norms established by various branches of law, ranging from tax to administrative and labour laws, amongst others. The informal economy can be found in virtually all sectors of the economy, including retail, and is based on informal relationships between producer and consumer. In the majority of the cases, this type of “shady” economy is facilitated by individual entrepreneurs or privately owned enterprises that are not formally registered. Often, informal activities serve as a basis for secondary employment, and are being executed by non-professionals. There is an abundance of the examples of informal economy: for instance, it could be the production and realization of agricultural output, or the selling of the goods in the merchandise and mixed-purpose markets, the construction of individual housing, private transportation, the provision of household repair services, private hairdressing, and so on. Informal economic activity is typical for developing countries. In Russia, it is particularly widely spread in the domain of trade: the most common

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example is the so-called “shuttle-trading”, or realization of products by a natural person (as opposed to a legal person, which may be a private or public organization) in the spheres of agriculture, construction, and other industries.

According to the SSC (Goskomstat), the veritable share of the shadow economy in Russia’s GDP is less that 20%1 However, independent consulting agencies indicate a figure of 44%2 In turn, illegal economic activities imply a deliberate violation of law, denoting that they represent the types of provision of goods or services which are expressly prohibited by existing legislation and, in particular, the criminal code. Currently, such activities include, for example, distribution of narcotics, the selling of weapons which bypasses regulations, prostitution, smuggling, trafficking of people and human organs, selling of stolen property, and so forth. However, with the amendment of the laws, what is considered illegal can also change. For instance, with the adoption of the resolution on the selling of arms to individuals, certain part of this business has ceased to be considered illegal as it was transformed into a part of the formal sector of the economy.

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Economic Paradoxes

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It is an arduous task to clearly identify the negative impact of the informal and the illegal components of the economy on society. When considering this issue, A. Portes has proposed that there is a paradox within the realm of the informal economy, demonstrating inconsistencies in the determination of its impact on the state and society in general3. The paradox by Portes suggests that the aspect of informality draws the economy towards the state of the free market, liberating it from governmental influence. However, the closer it gets to its “natural” condition, the more the effectiveness of its functioning depends on social bonds established between the players. Since the informal economy does not recognize legal protection from fraud and there is no possibility to seek justice in court, relationships are built upon trust within the community. The main principle that ensures obedience is represented by the ability of elite players to assign to or deny other players a certain status. This tenet was the basis of blat — a term which appeared during the Soviet period to indicate the utilization of informal agreements, exchanges of services or connections which secured and guaranteed the functioning of informal relations in Soviet Union. Furthermore, the weaker the power of the state, the more the rules of the game become uncertain and the more opportunities are acquired by the players. Longterm investments discontinue being profitable and the preference falls upon, for example, the assignation and collection of rent or various methods of fast money-making. Thus, rather than resulting in the triumph of capitalism, the weakening of the state leads to what can be defined as T. Hobbs’ problem of social order4. A holy place is never empty — hence, the regulations and control of the state are substituted by protection racket schemes, and instead of one integrated free market there appears a multitude of independent local markets, suppressing overall competition. Therefore, for the proliferation of competition, there has to be an empowered state, capable of setting and enforcing the rules. But on the other hand, a strong state is predisposed to bureaucratization, control, and the imposition of rules that, according to the economist de Soto Polar, are the sole instigators of the rise and prosperity of the shadow economy5. Clearly, the state does not directly initiate informal activities, but stringent regulations and blind prohibitions result in the appear-

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ance of a mutated species of previously legal economic actors, repressed by the strict control of the state. Thus, when the shadow economy and its transformations are not carefully supervised and governed, the state encounters new types of informal and illegal players, insensitive to existing regulations and prepared for the tightening of the rules of the game.

“The more we organize society, the more it resists our attempts to organize it”6 R. Adams

The shadow economy tends to expand in times of crisis and of particularly rapid and acute shifts in social relations and political systems. It is not surprising that the rapid growth of the shadow economy in Russia occurred in the early 1990s. The transformation of the Russian economy during the last two decades was accompanied by the emergence and ubiquitous dispersion of various types of activities that comprise the sphere of the informal economy. Several aspects of this trend are particularly curious. Despite the fact that the scale of the informal economy is practically immeasurable, through a series of field studies it was possible to extract data that attested the existence and dynamics of these economic activities. In the following chapter, I will briefly outline the results of the research in the form of a typology, illustrating the diversity of informal retail in the city of Moscow (see p. 117–124). To create a typology of Moscow’s informal sector of retail, a method of scientific taxonomy was used. Originally, this method was employed in biology for the identification of biological organisms on the basis of shared characteristics, followed by the naming of the organisms and their groups. The following typology was

ECOSYSTEM OF SPECIES

constructed according to a hierarchical principle. Different levels of the hierarchy have their own name (from highest to lowest): kingdom, phylum, class, order, family, genus, and species. All species were organized in a typology basing on a representative type of seller. The main task was to identify and display the smallest (lowest on the hierarchy) species that have not been studied statistically and cannot be attached to a particular defined habitat or assigned a specific turnover. Moreover, formal types of economic players operating in the economic domain were marked on par with informal and illegal species. As such, the classification attempted to include all types of species in the sphere of retail inhabiting Moscow: from elderly women who sell produce on the streets of the city or an ambulance that functions as a taxi in urgent situations, to megamalls and banks. The kingdom is divided into three phylums by the type of location: capital, temporary, and virtual. In the early stages of the research, it was determined that the market of capital retail is a much more comprehensive and easily measurable topic, as compared with the shadow economy, and that it has been well-studied. For example, the proportion of the area of the shopping centers in Moscow in relation to street retail are 80% and 20% respectively7. Therefore, the market of goods and services in the temporary and virtual sectors represent a most intriguing and unexplored subject. An important criterion for the organization of the typology were the features primarily representative of the market of goods and services present in Moscow. With respect to temporary retail, even its formal aspects are only partially understood. The typology proposes two orders of street trading: the first order concerns the situation when a trader wanders around the city, offering goods and services while not owning a permanent trading place (nomadic order); the second order refers to a trader who does have a specific site to conduct his business (standing order). It is important to note that temporary retail incorporates both orders, while for capital retail, only the standing order is applicable, and for virtual retail — only the nomadic order. A great number of informal types of sellers trade due to the fact that “shady” economic activities promptly respond to even an insignificant increase in demand, striving to satisfy it. For example, private transportation, household repair, as well as private tailoring along

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with other services, are often provided at below market prices by individuals without registration. Low prices are achieved through the risky process of tax evasion, the employment of unskilled and unqualified labour, and the absence of a rental contract, as in the case of spontaneous street trade. However, the demand for such products and services emblematizes a defining factor in the existence of shadow economic activities.

Methods of Regulation and Control: Existing and Suggested

So how to transfer illegal and informal trade from behind the shadows? Concerning the shadow economy, several methods should be applied simultaneously. On the one hand, it is necessary to increase the operational effectiveness of law enforcement agencies, such as the tax administration, and to establish a stable provision of public goods, ranging from policing and protection of property to the observation of the clauses of contracts, and the overall strengthening and development of the economy. On the other hand, the state should launch a program of legal and shadow capital integration. Currently, the legalization of shadow capital channelled through the legal sector of economy is, perhaps, the sole source of large-scale investment in the national economy, comprising a substantial increment of state revenues. What types of policies can the state implement to change this “shady” situation? Originally, it was the government itself that pushed entrepreneurs into the shadow, and now it is high time to provide them with an opportunity to step into the “light”. It should be noted that unaccounted income and the failure to perform prescribed duties serve as the foundation of the shadow economy, triggering the rise of crime. Therefore, it is vital to make cash turnover and tax evasion economically disadvantageous and legally punishable. At the same time, punitive measures towards individual “shady” entrepreneurs should be avoided, since it would lead to a tremendous, irrevocable financial loss, reverberating in the lives of millions of Russian citizens. Rather, the state should attempt to integrate the shadow economy into the national economic system, making it work towards a common cause. The next chapter will touch upon the characteristics of the informal economy typical for Moscow, and will give several examples of the types of informal trade, such as public property resellers, professional queuers, speculators, peddlers, leeches, and helpers.

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T34 Price: 150 ₷/bunch Class: service Where to buy: public transport stops, churches, public spaces

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Public Property Resellers It’s hard to find a street retail type that would exceed in scale the flower business. A typical sight for the Muscovite, florists can be found everywhere — flower offers differ from omnipresent kiosks advertising “Flowers 24 hours”, to luxury flower boutiques that are able to afford the rent in the best Moscow locations. Interestingly enough, this massive flower business is not always able to meet the local specifics, tastes, and spontaneous demand. Adding to this market, the multitude of public holidays and celebrations fertilizes new and innovative ways of selling flowers. In April, streets and squares around churches turn into willow bazaars, with sellers becoming more plentiful each year. The average price for a bunch of willow prior to Palm Sunday goes up from 100 to 300 roubles. Willow is not the only victim of local festivals and rituals: lilac, tulips, may-lilies as well as fir-trees during New Year and Christmas time and other flora growing in the city and its suburbs follow the fortune of being illegally picked and traded on the streets of Moscow.

ECOSYSTEM OF SPECIES

T24 Price: big flag — 150 ₷ small flag — 100 ₷ flag with Putin or Medvedev — 50 ₷ forage-cap — 300 ₷ Class: goods Where to buy: roads, crossroads, public transport stops

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Peddlers — on the Road Every resident of Moscow, without even being a car driver, knows about traffic jams. Given the fact that the average driver in Moscow spends about 127 hours a year in traffic jams8, it is not surprising that street merchandise reacted with various offers for drivers that are stuck in their cars. So-called peddlers move slowly between the rows, unobtrusively offering their goods. The stock is quite narrow: flowers, car mobile phone chargers, phone databases, fake watches, air fresheners, and other car accessories. Also, in times of Victory Day celebrations or football competitions, peddlers can be found by selling military insignia or flags. The name “peddler” — came from a small merchant — a peddler because of his box, in which he delivered his small haberdashery as a draper in the villages. Trading success was provided by distance from shops and willingness to accept in payment not only money, but in different objects. It is interesting to mention that the current peddlers on the road rose out of another uncomplicated service: cleaning windscreens. The cleaning boys rushed with the sponges to every car stopping at the crossing. Whether you wanted your windscreen to be cleaned or not, their work was to be paid.

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T35 Price: from 30 ₷/trip Class: service Where to get: Moscow Metro

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Speculators — Preferential Metro Tickets Sellers In the USSR, trade arbitrage (defined as purchase of goods with the aim of sale with profit without added value) defined “a speculation” depending on volume as an administrative or criminal offense. In fact many types of trade can be called a speculation in modern Russia due to the economic lexicon, where speculation is defined as receiving income from the difference between buying and selling prices. While they are perfectly legal at present, the negative connotation remained. In the Moscow market there many forms of speculation from widespread resale of concert and theatre tickets to micro speculations on metro tickets. Local hucksters turned rush hours into a gold rush: they offer to buy a single ride ticket for 30 roubles around the queues for ticket machines (with the regular price at 40 roubles). The underlying economics is simple: the huckster gets hold of a monthly ticket, which can be used an unlimited number of times with the interval of 7 minutes. The best way is to get this ticket from the privileged categories such as pensioners and students, but one can also buy an unlimited ticket at metro ticket office.9

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ECOSYSTEM OF SPECIES

T69 Price: Moscow registration 74,000 ₷ Phd diploma 620,000 ₷ Phd Candidate 400,000 ₷ University diploma 30,000 ₷ Driving license 22,000 ₷ Military ID 100,000 ₷ Class: service Where to get: Moscow Governmental institutions

Abuse of Power — Fake Documents Bureaucracy in Russia has caused many types of shady trade to emerge. However, the fake document market is the most direct form evolving from the complexity, intransparency of bureaucratic procedures on one hand and corruption-prone officials on the other. Police experts and the producers of these documents themselves have divided the fake document market into three segments. The first, and most profitable is passport forgery, as well as the forgery of immigration and registration documents. Secondly, the sale of fake documents or obtaining illegal assistance in registering genuine documents and certificates, such as medical certificates, car documents and military tickets. This segment it is the most stable (the demand for it will always exist). And the third sector of such services are educational documents: the clientele is quite narrow but also characterised as stable. Several years ago, the main source for acquiring fake documents were subways and metro stations where vendors lined with cardboard signs declaring “Diplomas”, “Passport”, “Certificates”. Advertisements in newspapers also provided a wide range of educational documents. Today, the main channel for the dissemination of fake documents has become the Internet. The demand for bureaucratic papers will exist until the state apparatus would simplify the procedure and reduce the need for such documents, but until then there will demand and a market.10

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T80 Price: from 250 ₷/hour Class: service Where to get: hospitals, churches, visa centres, the pension fund, the Federal Migration Service, Ministry of Justice, the Traffic Police office

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Tramitador — Place in a Queue Russian people, like no one else, have learned the culture of queuing. In the years of deficit in the USSR, certain goods were hard to get. Meeting a person on the streets of Moscow with toilet paper rolls hanging around their neck would not surprise anyone, but it would only cause the question “where did you get that?” — sales of such goods were limited per person. The rule was: if there is a queue, it’s worth getting into it, no matter what’s on sale. Those times are long gone, but the attitude to queuing remains. Russian people like to and know how to queue. For example the length of the open air queue to see the Gifts of the Magi in the Christ the Saviour Cathedral in January 2014 was from 5 to 13 hours. Still not everyone is comfortable with standing in line for so long, and their demands have been met by local entrepreneurs. A person called “Tramitador” takes a place in a queue, which is then offered for sale. When Tramitador reaches the certain point of the queue, she calls the buyer to come and stand in his spot. If the buyer is not ready to arrive soon, Tramitador would allow those behind her to pass by while waiting for the buyer. When the queue spot buyer has arrived, he is the next in the queue. This worker is paid a reasonable amount in cash at the spot.

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T38 Price: from dress 500 ₷ skirt 300 ₷

Class: goods Where to get: public transport stops, churches, public spaces

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Leeches — Public Spaces In late 2010, a large-scale war against the non-stationary objects of trade was initiated. These objects include kiosks, stalls, and hawkers in the perekhods . But surprisingly it did not improve order on the streets and did not provide free passage for pedestrians, as it was meant to be. And this led to the occupation of the former furnished places to spontaneous trade. So-called leeches that attach to public spaces, but do not provide the function of law and order and respect for the purity inherent in long-term residents of perekhods. Such short-time stay of former host and new informal kiosk enthusiasts frees businesses from liability and makes them extreme mobile, and immune for the system. Ranked Among the species occur such as flower sellers, a small assortment of clothing, various accessories: socks, watches, wallets, gloves, magnifying glasses , knives , books , badges , souvenirs, scarves , bags, cell phone cases , candy, batteries , diplomas, and tights card.

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T66 Class: service Working hours: 8:00–18:00 Monday–Saturday Services: fines, receipts, insurance Rental price: no Where to get: Moscow Governmental Institutions

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Leeches — Governmental Institutions The history of service is attached to the workings of governmental organisations in Moscow, and is not, of course, new. The deficit of commercial services offered inside governmental buildings leads to spontaneous clusters of goods and services, which are not always comfortable and legitimate. According to the law, Budget institutions in some cases can provide paid services or conduct other income-generating activities. But to conduct such activity is permitted only when it helps to achieve the objectives for which the institution was created. And in some cases, legislation expressly forbids it. At the moment, the major state institutions, that require a large number of ancillary services, such as GIBDD (State Road Traffic Safety Inspection) and FMS (Federal Migration Service ), along with embassies, become catalysts for a variety of non-stationary forms of services, from photocopying, producing letterheads, filling out questionnaires, document photos, insurance, payment of fines and receipts. Without such services, especially in institutions far from the center or in residential areas simply impossible. Fair to mention that for the consumer it does not matter who and how provides services, the existence itself matters.

ECOSYSTEM OF SPECIES

Here is what entrepreneurs themselves tell about their relationship with the traffic police and district council: — We are often visited by the authorities from the district council. We fight an invisible war with the police and district council. While our service is in demand, we are not being allowed to work, they are fighting with us. Earlier there were shopping stands, but now they are banned by law due to the kiosk placement scheme, so we have switched to microbuses. At some point we were sitting in the microbuses along the road and waiting for the passengers, but the city put up a sign “stopping and parking are prohibited”. And when we moved to the adjacent unadorned territory, they decided to make a law there, which prevents us from parking our microbuses there. — Would you agree to provide your services on the territory of the traffic police, if it was proposed to you? On a condition of a lease, of course. — Sure, we would agree. In the suburbs it is possible, but in Moscow any commercial activity related to the traffic police is prohibited. — And do you currently pay rent? — No, we don’t pay anything.

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— What solutions do you offer? — We offer to maintain the area and do everything according to the standards. This falls beyond the competencies and responsibility of the council. And the prefecture does not give permission to change anything. At some point, we even had a shooting over this issue because the council was taking away our tents with tow trucks, and one of the owners took it so close to his heart that he shot a tow truck driver in the neck from with a stun gun, and the victim even had to go to the hospital, and had surgery. They are just trying to simply shut us down and they are doing it illegally instead of finding a proper solution. There is a direct command from the top to remove us and keep it that way. We are being kicked out all the time, they break our advertising boards. Sometimes they pick our “Gazelles” up with a tow truck and just drop them off not at an impound lot, but at some random location, without composing a protocol. In general, we are at a real war. And it is quite difficult to move into a building, it’s pretty far. Imagine we move, then someone on the “Gazelle” will be trading right at the entrance of the building, and then no one would come up to us. So now we are waiting to see what else they will come up with against us.

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KIOSK CASE STUDY By dictionary definition, the word “kiosk” is a retail construction without an enterable trade floor due to its small size, thus able to fit once one person — a seller. Technically a kiosk is nothing but a metal frame container with mountable panels. The main difference of the kiosk and its advantage over stationery shops is the low cost because there is no need to do expensive ground and basement work. Often kiosks are called “laryok” and these two words used as synonyms. Word “laryok” comes from the old Russian word “lar”, meaning a large wooden chest for storing dry food. Therefore it became customary to call small retail selling stationery, magazines, newspapers, souvenirs and other non-food items “kiosks” and those selling food — “laryok”. Kiosks have become so common nowadays that is difficult to name all ghd types of goods that they sell from tickets and newspapers to all types of food, and cigarettes to alcoholic and non alcoholic beverages. Due to ease of construction and little space requirements, they are found virtually everywhere, even on construction sites and underpasses. One can see kiosks near schools, factories, public transport stops (often embedded into the stop infrastructure), exhibitions, sports facilities, parks, and at parking lots. Often kiosks illegally occupy the space (paying no rent) and obtain electricity from the street lamps (paying no bills) for as long as they can until ordered for removal by city administration, then the kiosk moves to another such place.

Sobyanin vs Kiosk

In 1990s, after the collapse of the Soviet Union, there was a boom of small entrepreneurship in retail and kiosks spread instantly, selling virtually everything. In many cases selling was illegal, as kiosks evaded taxes, goods were counterfeit and pirated (CD discs, alcohol, watches, and cosmetics) — thus creating quick and thick profits for the owners. This early success give the kiosks such wide spread across the country.

Sobyanin’s Era

It is not surprising that in 2010, with the appointment of mayor Sobyanin to replace Luzhkov, major changes in the attitude and approach towards the management of small-scale non-stationary trade took place. Let us try to reconstruct the chronology of the events that have occurred with the kiosks in Moscow subsequent to the election of a new mayor up to present day.

2010 Fact. In November 2010, when the new mayor Sergei Sobyanin was carrying out the revision of the roads and utility works that were being performed for the winter season, he stopped next to the metro station “Ulitsa 1905 Goda”. The mayor was outraged with the number of kiosks, “preventing the smooth passage of pedestrians, and blocking the monument for the participants of the December uprising.” This signified the onset of a largescale removal of the illegal kiosks that had hindered the passage of vehicles and pedestrians.12

14,000 kiosks 10,000 kiosks

8,500 kiosks

Тew territorial scheme of Moscow Retail

St. of 1905 year revision. 2 heads of council Massive war on dismissed kiosks 2010

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21’Oct Sergey Sobyanin became mayor of Moscow

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30’Oct

Nov

Release of standard kiosk project by “Moscomarchitektura” 2011

Jan

Feb

Auction for rent of kiosks Jun–Aug

2012

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Consequence. The fight of Sobyanin with the kiosks and stalls has greatly benefited street retail. By the first half of November, the number of applications for the rental of premises that were classified as street retail in the residential districts of Moscow has nearly doubled, while the rents in these areas have grown by an average of 5%.13 Within the next two years, the number of stalls and kiosks in Moscow has decreased by 40% — from 14,000 to 8,500.

Moscow rental prices: Kiosk win Perekhod, per m2 per month — 22,000 ₽ GUM,rental price per m2 per month — 5,000 ₽ 15 16

2011 Fact. As instructed by the city mayor Sergei Sobyanin, Moskomarchitektura (the city regulatory body) developed standard types of movable kiosks, which, through their design would be as easy to assemble like a Lego set. The new designs were presented in three themes, each for its own city zone: “Modern”, “Classic”, and “Freestyle”. As emphasized by the authors in Moskomarchitektura “such a differentiated approach would allow the most natural fit of the retail objects in to their city surroundings”.14 A month later, the new location plan for the small retail in Moscow was developed by Moskomarchitektura and the state-owned design bureau, the “Chief Architectural Planning Division” of Moscow. “Location plans are developed based on the inputs from city prefectures. The goal is to develop proposals for the systematization of placing the small retail points within the city”.17 Consequence. At the time Sergei Sobyanin first became the mayor of Moscow, retail chains held about 40% of the total retail market (up from 4–5% in 2000). The owners and leaders of small retail (kiosks, pop-up shops) are convinced that the aim of undergoing the proposed

+add 3,000 9,000 kiosks Ban for sale of alcohol on the area less than 50 m2 2013 1’Jan

Rent price increased in 11.6 times 11’May

8,000 kiosks Acting Mayor of Moscow 5’Jun

Ban the sale of cigarettes in non-stationary trading facilities

Newly elected Mayor of Moscow 12’Sep

11,000 kiosks

2014

1’Jun

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“During the audit, kiosks, complicating the traffic situation in the city and preventing pedestrian flow, will be eliminated”22 Mayor of Moscow, Sergey Sobyanin

2013. Before the war against kiosks Novoslobodskaya St. and Veskovsky lane intersection

2014. After the war against kiosks Novoslobodskaya St. and Veskovsky lane intersection

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2013. Before the war against kiosks Perekhod at Novoslobodskaya St.

2014. After the war against kiosks Perekhod at Novoslobodskaya St.

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changes is to move towards profit redistribution benefiting the large retail chains. Representatives of some of those chains also support this point of view. “Putting it in other words — Sergei Sobyanin is working on consolidation of the market” — said the managing partner of the Management Development Group (including retail chains “Gastronomchik” and “Prodeko”) Dmitry Potapenko.18

2013 Fact. The year 2013 began with the passing of the law that banned the sale of alcohol, including beer in stores that are smaller than 50 square metres that is — in all tents, stalls, and kiosks. Consequence. According to estimates, roughly 40% of the kiosks’ revenue was yielded through the selling of beer. Thus, the ban on the sale of intoxicating drinks whose alcohol concentration exceeds 5% has automatically led to the closure of a quarter of Russian kiosks. Fact. In February, the government decided to raise the rent of the kiosks located in pedestrian underpasses, increasing it by a factor of approximately 11.6 times. According to the calculations of the Main Control Directorate of the City of Moscow (Glavkontrol), this will increase city revenues from these rents from the current rate of 160 million to 2 billion roubles. Moreover, these arrangements were supposed to eliminate subletters as the mediators in the rental process, since they were considered by the government as overcharging for the total rental price, while no income was reaching the city budget.19 Consequence. The traders fear that they will not be able to meet the new fee,s and promise either to close down the business or to raise the prices of the goods. The significant reduction in the number of retail places in the underpasses has also led to the escalation of crime. “In 2013 alone, the number of crimes committed in the underground passages of Moscow has grown by 36%. Typically, it includes theft, robbery, and burglary”, stated the Deputy Head of Research Affairs of Russia in Moscow, Olesya Aleshina. And if in 2012 180 crimes were recorded as committed in the underpasses of the capital, last year, the number increased to 241.20

2014 Fact. From June 1, 2014 the sale of cigarettes in non-stationary trading facilities will become prohibited — such as kiosks and stands without a trading floor.21

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Work With — not Against

What is the purpose of the retail war and what are its consequences? What does the government attempt to achieve by employing such ruthless and unselective extermination tactics? Not many will benefit from the reduction in provision of goods and services on the streets of Moscow — clearly, the redistribution of the market is to mostly profitable for major retail networks. At the same time, the surviving entrepreneurs working in the underground passes and street kiosks on Moscow streets are deprived of civil rights: their short-term contracts with landlords can be broken at any moment. Even the approved scheme of placement of small retail facilities does not guarantee the stability of the location throughout the year. Notwithstanding the diminishing number of the kiosks in the city, the remaining kiosks still play an important social role in the life of the capital — namely, kiosks are responsible for regulating the order and cleanliness of their location, thus filling in the gap that the state cannot or does not want to fill, for example side services provided in Traffic Police offices such as photocopies or insurance. Naturally, the primary role of the kiosks is to provide Moscow with goods and services. In certain places such as Matveyevskoe district, with its lack of retail offerings, kiosks are certainly necessary because they are the only places that provide the local residents an opportunity to make a purchase without them making a tediously long journey to a big shopping mall or a supermarket. But in some places, they indeed represent an inconvenience and contribute to unsanitary conditions. The city should learn how to approach and work with small-scale, frequently informal, trade instead of fighting with it by passing new prohibitions and restrictions. By destroying the system of provision of the citizens with necessary goods and services, the state dooms itself to degradation. Instead, entrepreneurs could be approached as city sensors, playing the role of the “finger on a city pulse”. Using their start-up power and absence of bureaucratic obligations, they can offer rapid reaction on demand and offer the freshest and fastest goods and services. Also, kiosk entrepreneurs take some social responsibilities such as street security, order and of course budget income for these categories. The city in turn, can offer a new patronage platform that allows small businesses to transfer into the legal part of the trading system and provide rights protection and the creation of jobs.

Consequence. The ban on selling tobacco products is the next and possibly final blow to kiosk retailers.

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LIMITING THE U N L I M I T E D:

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Necessity or Choice Production and consumption of goods have evolved into the unlimited process. Muscovites have never had such a broad access to all kinds of retail facilities and a variety of products. While all citizens are continuously encouraged to consume more and more, almost 2 million Muscovites are struggling to survive on the minimum subsistence level. In a sense, they are trying to limit the unlimited on a daily basis, striving to find a balance between sufficiency and survival. How do Moscow government and retailers respond to the issue of supplying the underprivileged ones? What can potentially be done with it?

Anna Maikova

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Limiting the Unlimited

Food is one of the most basic human needs. In pre-agricultural times, it was unlikely that a single family or a tribe could gather enough food to make any further consumption undesirable, so there was little need for the evolution of a trait to limit consumption. Nowadays, the patterns of over-consumption are becoming more intense as people move up the social ladder. The production and consumption of goods have evolved into an unlimited process. Urban dwellers have never had such access to a broad variety of products; their purchasing power has never been so high. In fact, the citizens of Moscow can buy food and products anywhere and anytime, since many shops are open 24/7, and online retail is gradually becoming more significant. The entire national economy relies on increases in consumption. Whereas most citizens are encouraged daily to consume more and more, for the two million Muscovites who live on minimum wage, “limiting the unlimited” is a critical state between sufficiency and survival. This research is focused on the issue of the inequality of consumption, as well as on people who choose to limit their consumption, either for the sake of necessity or by choice.

Rich Moscow Among the Wasteland

“Moscow isn’t Russia”, describes the uneven state of affairs between the rich capital, Moscow, and the rest of the country, which grows weaker through grinding poverty. This is an image eagerly reproduced by the Western media, which at times presents the rest of Russia outside Moscow and St. Petersburg as a wasteland languishing in Third World style destitution. It is also commonly implied that Moscow is growing fast in prosperity, while the rest of the country lags behind. At first glance, the statistics seem to confirm this, with salaries in Moscow for 2014 at almost double the Russian average. Income disparities are even greater with the average income in Moscow being 2.5 times greater

than in Russia as a whole. Moscow accounts for about 20% of the Russian GDP, while representing only about 8% of its population.1 The price of a minimum consumer basket, which is a fixed assortment of goods and services, in Moscow is approximately equal to the OECD average, but it is higher than the rest of Russia by a factor of about 1.4.2 This means that 1 rouble in Moscow has the same purchasing power as 70 kopeks in the provinces. Not surprisingly, Moscow’s level of inequality is the greatest in Russia. Moscow’s Gini index is 52 (a measure of statistical dispersion intended to represent the income distribution of a nation’s residents), and is about 10 points above the Gini index for Russia as a whole.3 So the median resident of Moscow received 35% of the income of the typical Russian. A disparity of this modest scale is fairly large, but not completely atypical by the standards of developed nations. According to Rosstat, since 2000, real incomes increased by a factor of 2.5, and the number of poor in the country declined from 42 million to 18 million.4

Talking About Poverty

There are various international classifications of poverty. According to the World Bank, truly poor people have an income of less than one dollar (US) per day; there are not too many of them left in Russia. The number of those whose daily income is less than two dollars per day is 3.9% of the Russian population. According to the Institute of Sociology of the Russian Academy of Sciences, in 2013, three quarters of the poor bought cars and computers, and significantly increased their calorie intake.5 Interestingly, the issue of obesity becomes a problem of the poor, because they excessively consume calories (more than 2100 kcal a day). This raises several issues about the quality of food and the health effects of common types of diet amongst the poor. The perception of inflated Moscow prices and the lack of comparisons of real prices and income in Moscow

Moscow’s level of inequality is the greatest in Russia. Moscow’s Gini index is 52 (a measure of statistical dispersion intended to represent the income distribution of a nation’s residents) and is about 10 points above the Gini index for Russia as a whole Gini Index in European Union is 32

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Distribution of Moscow Population Based on Monthly Income

Monthly Income, ₶

Consumption curve

52 000* sufficiency line of average income

10 000**

Source: Author

15% underclass

poverty line of minimum subsistence level

Moscow population, % ** Moscow government report, 2013 ** Minimum subsistence level, spring 2014

with the regional and intra-regional levels, leads to the reproduction of the “Moscow is not Russia” paradigm. Of course, this is not to say that Moscow is not on the top of country-wide socio-economic and consumption indicators (meat consumption, internet coverage, etc.), but it is worth mentioning that the gap has been slowly narrowing over the past decade, as both incomes and prices in the Russian interior slowly approach Moscow levels, according to Rosstat.

Becoming Poor, Staying Poor

The Institute of Sociology of the Russian Academy of Sciences defines two main categories of the poor in Russia: those who became poor due to sudden misfortune, such as the loss of the main breadwinner, or a debilitating disease, and the systematically poor, which exists across generations (alcoholism issues are also included here).6 Although the government spends 40 billion roubles on social welfare (in absolute terms it could be compared with German spending), 80% of the poor do not get any social support as fiscal benefits. Overall, the social politics of the state may be expressed as “paying real money — fiscal benefits to as small a number of needy people as possible”. Russian people are at high risk of becoming poor: less than 50% of jobs in the economic structure are for skilled labour, therefore, wages are low (20% of salaries are less than the subsistence level). The government itself dictates that there could not possibly be less than 15% of people in this category.

A Dangerous Inequality?

Differences in the chances of success in life are largely determined by factors that are independent from an individual. Those factors are mainly the parents’ income and level of education, nationality, race, gender, and place of birth (urban or rural). Inequality of opportunities is a measure of the dependence of the individual (income, education level) on factors beyond their control. Only 8% of Russian people who themselves have, and at least one parent has, higher education, and who grew up in an urban area. Therefore, no more than 10% of society are predisposed to material well-being. The main consequences of high inequality are low economic growth, poor access to quality food, healthcare, and education. Additionally, there is a low level of trust in society which increases the cost of doing business, preventing the development of business and entrepreneurship. As micro-level economic stratification leads to unequal starting conditions, it also reduces the efficiency of resource allocation and results in wasted human potential. The inequality of opportunities is reproduced from generation to generation, and it seems the social ladder is gradually becoming more difficult to climb in Russia since the 2000s. Overall, the high rate of inequality in Moscow prevents economic development. The sensor for inequality is the routine, the daily life of Muscovites. Focusing on daily needs and consumption for survival is an important step for understanding the underprivileged consumers and the choices they make.

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THE MINIMUM CONSUMER BASKET: AN ECONOMIC TOOL ... The minimum consumer basket has been established as a fixed list of items used specifically to track the progress of inflation in the market. It is mostly an economic standard, which shows that with relatively little money you can build a decent enough, from a medical perspective, diet to sustain yourself. . However, it is the poor who have to follow this concept most closely, since subsidies and pensions are indexed to the real price of the minimum basket, and they are extremely vulnerable to the changes in the prices of essential goods from the minimum basket.

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Minimum Basket in kg a Year

290 115 60

13 kg 22

210

According to the Law #32 “The consumer basket in Moscow”, dated June 19, 2013, the minimum consumer basket is a necessity for human health, and for a minimum standard of living: a set of food, non-food products & services. The consumer basket is mentioned in connection with the calculation of the subsistence level. The subsistence minimum is a monetary assessment of the

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consumer basket, and people are officially considered poor, when the level of income per person in the family is below the subsistence level. The subsistence minimum is established in each region of Russia. If in any region the minimum subsistence level is less than the federal level, then, by law, it must be provided to those that need it with additional funds from the state budget.

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. . . O R A N E V E R Y D AY R E A L I T Y ?

Daily Minimum Basket

0.01 g

60 g

160 g

0.04 g

0.5 pcs

160 g

300 g

300 g 350 g 800 g 50 g

Title

Volume of consumption by adult person Year, kg

Day, g

Wheat products (bread and pasta inÂ terms of flour)

130

350

Potatoes

108

300

Vegetables and melons

115

300

Fresh fruits

160

Sugar and confectionery products in sugar

22.26

Meat

58.7

160

Fish products

19.0

Milk and dairy products

290.8

800

Eggs, pcs.

210

0.5

egetable oil, margarine V and other fats

13.32

0.04 (less than 1 tea spoon)

Other products (salt, tea, spices)

4.9

0.01

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HOW DO PEOPLE SPEND MONEY ON FOOD? Consumer expenses are usually divided into 2 parts: Mandatory

Discretionary

The required expenditures include food and products, without which human activity is difficult or impossible. When a person is not able to consistently meet oneâ&#x20AC;&#x2122;s mandatory expenses in sufficient income, he or she does not proceed to the next level of discretionary consumption.

Reaching mandatory level of income, a person includes into their consumption fewer necessary goods and services, but more eating out, alcohol, entertainment, home appliances, etc.

What is where?

Oatmeal Milk products Meat Vegetables Snacks Rice

Mayonnaise

Salt Chicken

Rice Margarine

Tea

Tomato Apple

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Olive oil Bottled water

Ice-cream

Juice

Spreadable butter

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Alcohol

Is meat steak mandatory or discretionary?

Sugar

Potato

Is a restaurant meal once aÂ month mandatory or discretionary?

Fresh bread

Take-away coffee

Croissant

Chocolate

Banana

Eating out Brown sugar Bottle of wine Smoked cheese

Beer

Is fresh fruit mandatory or discretionary?

Seafood

Fast food Yoghurt

Who decides that?

Coke

Pineapple

Confectionery Strawberry

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FLIRTING WITH THE LIMITS

“The desire of food is limited in every man by the narrow capacity of the human stomach” Adam Smith

The Wealth of Nations, Book I, chapter XI

According to the Federal Law №336 of 02.12.2013, a minimum wage equals 5,554 ₷ in Russia overall and 12,600 ₷ in Moscow.

Minimum wage

12,600 ₽ – Minimum subsistence level, 100%

Minimum subsistence level (100%) in Moscow is the valuation of: the consumer basket (50%), utility fees (25%) and non-food products and services (25%). The cost of minimum basket in April, 2014 equals approximately 5,000 ₷ thus, the average minimum subsistence level is equal to 10,000 ₷. The law does not take into account the price of renting, it assumes that every citizen has 18 sq.m. of living space.

Minimum consumer basket 50%

Utility fees 25%

5,000 ₽

25%

Money left Discretionary

According to the Art. 133 of Labour Code of the Russian Federation, the minimum wage can not be lower than the subsistence minimum. Even though minimum wage in Russia does not reflect the realities of the market and looks like a formality, the large gap between the average and minimum wages creates preconditions for maintaining a high level of poverty in the country.

2,500 ₽

Non-food products

2,500 ₽ 2,600 ₽

What you can the citizen do with the remaining 2,600₶ or €50 in Moscow? According to the portals Expatistan.com, Numbeo.com and personal research, there is a list of products/ services that one can enjoy in Moscow: Combo Meal at McDonald’s 250 ₷ Meal for 2 at a restaurant, 3-course 3,000 ₷ Daily menu in the business district 400 ₷ 1 bottle of red table wine, good quality 450 ₷ Cappuccino in downtown 250 ₷ 0.5 l of domestic beer in the supermarket 50 ₷

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THE LARGEST ACTUAL FOOD EXPENDITURES O F M O S C O W P O P U L AT I O N : Structure of Consumer Food Expenses by Type The largest food expenditures of Russian population: 1) meat products (26.02%) 2) alcoholic beverages (14.56%) 3) fruits and vegetables (9.79%).

The smallest part of the consumer food basket is spent on: 1) ice cream (0.49%) 2) flour (0.59%) 3) jams and honey (0.62%)

Rating of Consumer Spending by Type, Russia, 2013

Baskets Comparison. Average and Official Minimal Consumer Baskets

Name

2013, %

The whole consumer basket

100.00

Minimum consumer basket

Meat products

26.02

Source: Moscow Government Law #32

Alcohol drinks

14.56

Vegetables

9.79

Milk and diary

6.71

Fish products

5.10

Bread ans wheat

4.77

Oil and fats

3.02

Cheese

2.72

Tea, coffee

2.62

Cereals and macaroni

2.00

Salt, sauces, spices

1.81

Sugar

1.29

Eggs

1.27

Preserves

1.08

Fruit juices

0.97

Non-alcohol drinks

0.70

Honey and jams

0.62

Flour

0.59

Ice-cream

0.49

Items in green box are not included into the minimum basket

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Milk and diary 27.08%

Meat products 22.85%

Vegetables

Average consumer basket Source: Rosstat;TEBIZ Group, consulting agency

Meat products 30.00%

Alcohol 17.00%

Vegetables 11.00%

16.43%

Milk and diary Bread and wheat 14.14%

Fruit 7.59%

Fish products 5.89%

Eggs Oil and fats Sugar Others

11.00%

Others 10.00%

Bread and wheat 8.00%

Fish products 6.00%

Oil and fats 4.00% Sugar Eggs

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A C T U A L R E TA I L P R I C E O F M I N I M U M C O N S U M E R B A S K E T, A S O F 2 0 1 4 , M O S C O W

11 870

6958

6417

5806 5670

SOCIAL STORE

Retailer

Product category

5000

Tea, salt, spices

Eggs

Oil and fats

Milk and dairy

Fish Meat products

Sugar

Vegetables

Fruits

Potato

Flour and wheat products

The Ministry of Agriculture of the Russian Federation and the online portal for the Russian consumers yapotrebitel.ru separately conduct an estimation of the consumer basket price among Moscow retailers (the biggest chain stores of different price categories) on a monthly basis. As for the April 2014, the price of the minimum basket in discounter “Pyaterochka” equals 5670 ₷ (160 $), whereas the cost of it in the chain store “Azbuka Vkusa” is estimated as 11,870 ₷. Source: www.yapotrebitel.ru/product-price

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THE SOCIAL STORE IS NOT A SOLUTION What is a Social Store?

A social store is a regular grocery store that participates in a program instigated by the Moscow Department for Social Security. Such stores sell food and essential goods at a reduced price to certain beneficiaries — resource-poor citizens who hold a special “blue” social card. The card is issued by the District Office of Social Security to those who can bring proof that their income is lower than the current subsistence level. In exchange for cooperating with the Department, social stores get a special rental rate (about 1,800 ₷ per square metre.). The Department of Social Security regularly announces the recommended price list for a particular basket of goods, and these products are 10% cheaper for the beneficiaries.

Who Receives the Discount in Social Stores? The right to receive a discount in social stores is given to citizens whose aggregated income is below the subsistence level. Since the majority of beneficiaries are the elderly, and people with limited mobility, the program organisers have to evenly distribute the stores among different districts. According to the governmental portal www.data.mos.ru, there are about 400 social stores in Moscow, mainly in the outskirts of the city, while there are few stores in the city centre.

What Are the Benefits for Entrepreneurs?

Large retailers, such as Dixy, who buy products at low wholesale prices due to their scale, can afford to have a wider range of goods sold at discount prices, while still receiving the program’s special rental rate. However, it is doubtful that an individual social store will ever become particularly lucrative. At least they can enjoy great popularity among customers, and word-of-mouth publicity may help their other branches, in the case of Dixy.

Social Store is One of the Solutions, but It Does not Solve the Main Issues.

Although social stores are supposed to have a list of products from the minimum consumer basket, and sell them for a recommended price, many of the stores do not actually display or sell all the listed products. In addition, even if

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the stores have those products, the discount itself is not tangible, and the quality of the products is rather questionable. For example, in the social store on Dmitrovskoe Avenue, the regular price for bread is 25 ₷, whereas with the social discount for the price is 24,21 ₷, which is only 79 kopeks cheaper. The workers of the store mentioned that there used to be more people subscribed to the program coming in, but nowadays the number of such people is decreasing. Looking at the facade of the store, regular people would never guess that this store is actually a social store. This can only be discovered if you look closer at the price tags or at a small poster near the cash desk. So not all the people who find themselves in a difficult financial situation are actually aware of the established program.

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INEQUALITY EFFECTS QUALITY International Index of Food Quality

In January 2014, the international confederation OXFAM, which works to find solutions to poverty and injustice, created an index of the availability, quality, and cost of food in 125 countries. Along with Mexico, Chile, and the Maldives, Russia was rated #42: although there are generally no food shortages, the quality of food in Russia is still poor. The Netherlands was the leading country in the list, and the last in the rankings was the Republic of Chad, which is located in sub-Saharan Africa.

In order to compose the index, experts analysed four key indicators: 1) A ccess to food (measured through the degree of malnutrition and amount of underweight children) 2) Level of food prices and their volatility 3) Quality of food products 4) Impact of food on public health The quality of food in Russia is far ahead of India and South Africa, and the level of food availability in the Russian market is much higher than in many other countries of the former Soviet Union. In Russia, food prices are rising, but not as fast as in Kazakhstan and Belarus (both CIS countries). According to RIA-Analytics, Russia was one of the few European countries where domestic food prices have not been rising dramatically in the past few years. At the recent forum, “Russian Agroholdings 2013”, participants claimed that such comparisons should have also taken into account geographical factors: the size of Russia cannot be reconciled with the index for many developed countries due to significantly different geographies and population distribution. Hence, there is unevenness in the production, consumption, quality and prices of food that should be compared with the indices in Canada, Argentina, and Australia. Thus, it is easier and faster to saturate the food market of the Netherlands, the area of which is less than Moscow region. Furthermore,the population density in the Netherlands is higher than Russian markets.

Poverty Effects People’s Health

Low income populations tend to not go to stores with higher quality food, because prices are often too high for them to bear. When available, healthy food is frequently more expensive, whereas products made of refined grains,

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and with added sugars and fats are generally inexpensive and readily available in discount stores. In order to buy sufficient food, households with limited resources often try to stretch their food budgets by purchasing cheap, energy-dense food that typically has lower nutritional quality. Due to the overconsumption of these low quality calories, higher rates of obesity can also occur. According to of the Nutrition Institute of the Russian Academy of Medical Sciences, more than 25% of the Russian population is obese, and 55% are overweight. Unhealthy diets and low physical inactivity are the main risk factors for obesity, atherosclerosis, and cardiovascular diseases. When available, healthy and fresh food is often of poorer quality and appearance in discount and social stores, which furthermore diminishes the appeal of these items to buyers. Those who are eating less, or even skipping meals to stretch food budgets may overeat when food becomes available, resulting in frequent feast-famine cycles that also can contribute to weight gain. Cycles of food restriction can lead to metabolic changes that promote fat storage. Low income families, their children in particular, may face high levels of stress due to the financial and emotional pressures of social inequality, caused by factors such as food insecurity, low wage work, lack of access to health care, inadequate transportation, and poor housing amongst other things. Stress may lead to weight gain through stress-induced hormonal and metabolic changes, as well as inducing unhealthy eating behaviours. Stress also may trigger anxiety and depression. Moreover, low income youth and adults are exposed to disproportionately more marketing and advertising for obesity-promoting products (such as fast food), thereby encouraging the consumption of unhealthy food and discouraging physical activity. Such advertising has a particularly strong influence on the preferences, diets, and purchases of children, who are the targets of many marketing efforts. The modern system of control in the field of consumer rights and nutritional surveys works only after incidents happen, and it is much harder to implement changes. The Russian Federal Service of Surveillance for the Protection of Consumer Rights and Human Well-Being usually begins inspections only after incidents occur, and is not taking any preventive measures.

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Social Store VS. Globus Gurme

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DO NOT MAKE SOCIAL STORES. MAKE EVERY STORE SOCIAL!

There are only 450 social grocery stores in the Russian capital, compared with 581 Pyaterochka stores, one of Moscow’s chain discount grocery stores. The famous “Eliseyevsky Magazin” on Tverskaya Street is one of 64 social stores located in the Central Administrative District. It was opened in 1901, and is considered to be the oldest food store in the city. The store has always been famous for its interior design, and large variety of quality food products. By participating in the Moscow Department of Social Security’s social store program, the store provides discounts for 450 needy people in the district. However, having more than 800 square meters of retail space, the store can actually provide quality food to even larger number of people in need. Giving the fact that even the famous, high-quality Eliseyevsky store participates in the social store program, why can’t every store be social? People in need never cross the threshold of stores that seem expensive, because they know that high prices will disproportionately affect their budget. If every store in the city is social, the underprivileged will not be deprived of quality food. The city should encourage chain and independent retailers to support the supply of affordable and quality goods for the population of Moscow, especially for the two million, who struggle to live on minimum wage alone.

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Eliseevsky Magazin on Tverskaya street

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COST PER CALORIE 6.5 calories in Pyaterochka store = 1 calorie in Azbuka Vkusa Basket #1 from “Pyaterochka” Store (close to the current minimum basket) Food item

Calories per 1 kg

Quantity, kg/pcs.

White bread

2,650

0.4

Macaroni

Price paid, ₷

Calorie value, kcal

9.9

1,060

3,500

0.4

1,400

Milk (3,2% fat)

600

1.0

600

Milk product (Curd)

750

0.2

150

70 per egg

10.0

700

Eggs (chicken) Vegetables (Potatoes)

300

1.0

300

Vegetables (Onion)

420

0.1

2.9

Fresh fruit (Apples)

470

1.0

34.9

470

1,800

0.35

630

Fish products (canned squid)

1,060

0.3

149

318

Fish products (crab flavour fish sticks)

1,380

0.1

138

900

1.0

900

3,800

0.5

1,900

1000

0.1

109

100

709,7

8,708

Meat product (Sausages)

Vegetable oil Sugar Packages coffee Cost per calorie is 0.08 ₷

Basket #2 from “Azbuka vkusa” Store (closer to the updated healthy basket) Food item

Calories per 1 kg

Wholegrain bread

Quantity, kg/pcs.

Price paid, ₷

Calorie value, kcal

2,200

0.3

660

2130

0.4

228

852

350

0.2

24 per egg

480

Vegetables (Tomatoes)

300

0.3

180

Vegetables (Garlic)

490

0.1

Fresh fruit (Oranges)

470

1.0

250

470

Fresh fruit (Pineapple)

450

2.0

370

900

Fresh fruit (Melon)

360

0.8

240

288

Meat product (Lean beef)

1,830

0.5

360

915

Fish products (dorado)

1,600

0.5

380

800

450

1.0

800

450

4,000

0.1

Whole-grain macaroni Milk product (Low-Fat Yoghurt) Quail eggs

Olive oil Ginger cookies Cost per calorie is 0.52 ₷

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200

400

3,351

6,424

159

Basket 2

Basket 1

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U P D AT E D B A S K E T While the minimum basket provides a considerable flexibility to the policymakers, this established methodology is criticized for arbitrariness. In general, experts and bureaucrats at the top decide what and how much people need, assuming that all people have exactly the same needs, which is questionable. In reality, people value various needs differently. So, essentially a paternalistic approach is

indifferent to individuals’ preferences. Ideally, the minimum consumer basket should be assessed at the individual level in terms of what people want/ need. Using a general consumption-based approach, it fails to connect poverty with people’s values and aspirations towards general well-being. However, we can update the basket by using the nutritious diet’s facts and adding healthy products to the basket.

Traditional Minimum Basket

Updated Healthy Basket

Traditional wheat and grain products (fast carbohydrates): white bread and flour, pasta and white rice

Whole-grain products (slow carbohydrates): whole-wheat pasta, bread and flour, brown rice

Vegetables with high starch content (e.g. potatoes)

Greens (e.g. parsley, coriander, spinach)

Fresh fruits (mostly apples)

Food rich in antioxidants and vitamins, such as ginger, saffron, blueberry

Added sugars (granulated sugar, syrups, jams)

Brown sugar and natural sugar substitutes: stevia, honey, dried fruits

Pork and processed meat (bacon, sausages, ham, pepperoni)

Lean meat (beef mostly), skinless chicken and turkey

Fish products

Fish and seafood (no shrimps)

Milk and dairy products (whole milk, cheese, sour cream)

Low-fat alternatives, such as skimmed milk and reduced-fat cheese

Pastry (cookies, pies, snacks, doughnuts)

Cookies and bars containing slow carbohydrates: grains, such as oatmeal, less sugar and fat.

Eggs

Add quail eggs

Added sugars (granulated sugar, syrups, jams)

Brown sugar and natural sugar substitutes: stevia, honey, dried fruits

White salt

Himalayan and iodised salt, flavouring food with garlic, herbs, and spices.

Margarine and combined fats

Oils with mono- and polyunsaturated fat, such as olive, coconut, hemp, etc.

Other products

Nuts, beans, soy products, such as tofu.

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No GMO Gluten-free Organic Animal- and eco-friendly Transfat-free No Saturated Fat No combined fats Low-fat Fair-trade Sugar-free No MSG

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At present, the share of consumer spending in Russia is larger per capita compared with the Western world simply because Russian salaries are smaller. Russia has only recently started to experience consumerism: to take bank loans, to get acquainted with Western clothing brands, to buy cars, to travel abroad. Therefore, the concept of “buying things doesn’t make you happier” and slowing down consumption is part of a completely different narrative. Coming to this conclusion is a process of evolution, values, and saturation with what one wants. Russia seems to be just starting this process.

The main driving force of retail is produced not by the rich, but rather by the mass market. Corporations have learned to extract a few coins from the poor. Not a counting for the fact that they will stop, the anti-consumerist movement is appearing in Russia. Its impact, however, is insignificant, partly because the level of trust in society is low, and the ground is not yet fertile for opposition to consumption. One could wonder how these tactics might evolve when Russia reaches the post-consumerism stage, and if it ever will.

S M A R T S T R AT E G I E S 10 Ways to Reach Anti-Consumerist Bliss

BUY NOTHING

The followers of this movement employ a range of alternative living strategies based on limited participation in the conventional economy and the minimal consumption of resources. A representative tactic of BUY NOTHING would be Freeganism, the practice of reclaiming and eating food that has been discarded. Although this is not an option for most Muscovites, as the city gradually joined the global market, and money is the most socially acceptable method of obtaining goods, some artists and students engage in alternative, non-money activities.

BUY LESS

Minimal quantity, better quality. The tactic is in the resisting the raging flood of consumer products by buying only durable goods and consumables, preferably which have little or no packaging; living without a fridge forces people to eat only fresh food. Perhaps by buying less they do not automatically make society better, but least they fight to get a less polluted one.

I F Y O U H AV E S O M E T H I N G. . . S H A R E I T

The first generation of the sharing economy started with the establishment of the American peer-to-peer retailer Ebay, where consumers themselves became retailers. Nowadays, this ethos is represented in Russian services such as Avito.ru and Molotok.ru. The next generation of collaborative consumption came with services such as Airbnb.com, a vacation rental service, and the various car-sharing services. Although they have not gained mass popularity yet, because of the low level of trust in society, there are some examples of local carand ride-sharing services (podorozhniki.ru, blablacar.ru, and so on).

IF YOU DO NOT USE… GIVE

One man’s trash is another man’s treasure. Redistribution markets are gaining popularity: used goods are given to those who need them. The followers of this movement are moving away from being passive consumers to being creators, highly enabled collaborators, and givers. The tactics of this movement are either selling an item for a nominal fee, or giving the items away for free. Russian websites include darudar.ru.

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SIMPLIFY YOUR LIFE

The strategy of simplifying one’s life is to spend more time on creating a better quality of life rather than material wealth. People are giving up the “good life” to pursue a great one. The overall philosophy of the movement is to choose simplicity over unhappiness.

B UY FA I R

This consists of buying fair trade products, which ensures that farmers producing the commodities are paid fair wages for their work. This is still very new to Russia. The participants in the system are mostly foreign brands. http://www.theguardian.com/global-development/poverty-matters/2014/feb/24/fairtrade-20much-achieved-much-to-be-done

DESIRE LESS

The followers of these tactics ask themselves: “Do I really need it?” It consists of avoiding shopping malls, advertised products, and the feeling of being manipulated. The integration of leisure and shopping is insidious, with the indoor shopping mall representing nothing less than the commercialization of social interaction. http://www.health.com/health/article/0, ,20410098,00.html

BUY LOCAL

Supporters of locally owned businesses and services in places dominated by externally owned big corporations. They want to build a community where money spent on local businesses stay within it as opposed to going out of the community. They buy locally grown, seasonal and organic produce, opposing the food which is grown by big industrial farms using intensive inputs of pesticides, fertilizers and energy without consideration for the land, air, water and the environment. https://www.flickr.com/photos/28686960@N06/4969766245

E AT S LO W F O O D

An alternative to fast and industrial foods, the slow food movement strives to preserve traditional and regional cuisine, and encourages farming of plants, grains, and livestock characteristic of the local ecosystem. This philosophy is brought to life through the events and activities organized by convivium — a local chapter of Slow Food movement. There are 18 Russian Slow Food convivia, and three of them are located in Moscow. Through shared meals and tastings, visits to local farms, conferences, festivals, and taste education courses for children and adults, they are promoting farmers’ markets and supporting local and international slow food campaigns.

PAY I T F O R W A R D

The strategy of redefining economic outlooks to value social and environmental costs in everyday decisions and consumer choices.“We are what we eat, and we are responsible for Planet Earth”. Since both obesity and climate change have become major public concerns, there is an increasing interest in defining how citizens ought to behave as consumers and how retailers and producers should facilitate responsible behaviour.

There is a need to design and implement better ways of running a unique Russian post-consumer economy, where we will most likely find ourselves after we have gone through the stages of consumerism. Russia might not follow the path of the West in hyperconsumerism and the reaction against it, so perhaps there is a ground for emerging unique Russian way to reframe the emerging tension.

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Doug Stephens

B E T T E RI N G RE TA I L Interview by Anna Maikova

Doug Stephens is one of the

world’s foremost retail industry futurists. His intellectual work has influenced many of North America’s best known retailers, agencies, and brands, including Walmart, Home Depot, Disney, Microsoft, WestJet, Citibank, Razorfish, and Intel. In 2013, Doug was voted one of retail’s top global influencers by Vend.com. Doug spent over 20 years in the retail industry, holding senior international roles including the leadership of one of New York City’s most historic retail chains. Doug is the author of the ground-breaking book, The Retail Revival: Re-Imagining Business for the New Age of Consumerism. He is also the consumer technology contributor on the acclaimed international television series App Central, as well as the retail contributor for CBC Radio. Doug also co-hosts the popular web series, The Future in Store, and sits on the advisory board of the Dx3 Digital Conference. We had a great conversation about the future of retail.

How will people consume in the future? Can we draw a portrait of the future global consumer? In absolute terms as a global society we will continue to consume more and more; on a personal level, we are going to consume things differently. If we are talking about developed economies, such as in North America, Europe, and Australia, consumers are becoming more conscious and considerate about the things that they are buying. There is definitely a trend towards the shedding of buying — people are not buying as many things as they did before. If we are talking about developing countries and emerging economies like Russia, these economies are going through a boom that is not unlike the boom that the West went through in the early half of 1900s, when the economy was just exploding, and people were buying more and more things all the time. Whether or not as a global society we are going to consume less or more, what is definitely happening is that our purchasing habits are changing.

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DOUG STEPHENS

As for as I know, alternative models of shopping are emerging, such as responsible shopping, the slow food movement, the sharing economy, and so forth, all fostered by an emerging awareness of the limits of consumption. Russia is still going through that economic boom you mentioned, and seems to embrace consumerism without much question; will Russia move towards a post-consumerist era in the near future? It is foolish to assume that every nation needs to repeat history in order to get to the future. The circumstances that we live in today, the degree to which we are connected as a society, the degree to which we are able to learn from one another across borders and share ideas, concepts, and information is dramatically different than it was in 1950s in North America. It would be naive to say that emerging nations are not going to learn from the mistakes of developed nations. Will the Russian economy have a more enlightened era of consumerism? I suspect it probably will. We are also dealing with very different awareness of resource constraints today, than we were 50 years ago when everything seemed completely abandoned. China is already taking steps to mitigate the damage of its growth of the consumer economy and its population explosion. We are definitely going to experience a more enlightened era of consumption than we did in North America. Indeed, retail seems to be an ever-expanding and pervasive force thanks to new technologies. Do you think retail is bound to always grow? The nature of retail is changing dramatically. In the past, physical stores have been the distribution mechanism. The idea of media was to drive consumers to physical stores. As we become more and more digital, as mobile commerce becomes more pervasive, all forms of media are becoming stores: I can buy directly from a magazine, Twitter, Facebook. Does that mean that eventually we won’t need stores? Shopping is a social activity, and we enjoy having physical experiences that Web cannot replicate. There is a shifting purpose of stores: physical stores become more like media, and media are becoming more like physical stores. What that means in terms of growth of retail? We definitely can see the growth of retail, but shrinking of physical retail. It was very short time ago, when in North America retailers were not worried about e-commerce because of its small percentage of market share. The same thing is happening right now in social commerce through Twitter and Facebook. We don’t worry about it, because at this point it is one tenth of one percent of all retail. This figure is growing at a 100% rate per year. It is not going to take a long time before social commerce accounts for a significant portion of total retail. E-commerce has 8–10% of the retail market in North America, but is growing a 12–15% a year. Within 10 years, it is conceivable that it may be 30–40% of all retail.

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Right. Retail is not only the time spent in store but increasingly the time spent online comparing, sharing, rating, discussing, etc. In some areas in Europe there are places “free from Wi-Fi” as a symbolic protest against that time invasion. Will we all spend more time on retail in the future? There is a term, “the Internet of Things”, which states that right now in the world we have five billion connected devices and can expect to have 50 billion. In the future, there will be surfaces in our houses like the touch screen bathroom mirror, connected cars, home appliances, and clothing that will connect both with us and between each other. A lot of the things that we are thinking about now as consumers, such as our supply of laundry detergent, will be looked after by technologies — refrigerators will do the weekly grocery order. We have to deal with a lot of mundane purchases that technologies will do in the future. If we have more time, will we be working more? We apparently spend more time on recreation than we did back in the 1950s. If technologies give us back time as we don’t need to wash the dishes by hand anymore, we will travel, learn things, and do charitable work. You mentioned that the Internet of Things will radically change consumption. Another technology that might also change modes of production entirely is 3D printing. How will it change the market? These technologies are going to be game-changing in the future. There was a huge initial hype about 3D-printing. When you think about the small things around our houses that could be potentially printed using plastic, the technology would be fantastic. Right now it is a very time-consuming and expensive process because of the materials. It has a tremendous potential to have a 3D-printer at home as we have a microwave oven. Another technology that I am watching is augmented reality, when you can view a digital data over the physical world. If you check Dutch company LAYAR and Google Glass, where you can see all the things that are overlaid on our real field of vision. When we look at the street, we can receive digital information, we can see the restaurant reviews, schedule a lunch, and potentially transact with a store without going inside. That technology is going to lead to a completely different level of consumption. If we can take this data and overlay it onto the physical world, we can transport the store wherever you want. There is an online grocery store in China called Yihaodian that created a thousand virtual grocery stores across China last year. One of the stores was placed directly in front of a Carrefour location and one was even located in the Forbidden City. Nobody owns digital reality; any every brand can go and set up a store in a virtual retail space. No one can stop them.

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Does it mean that only a few people can potentially enjoy new retail features? There is going to be a technological gap between classes. Google has just released a certain amount of units of Google Glass for $1,500 (US). Are we moving to the world where only the rich can afford privacy? If in fact privacy means that I have to buy tools to encrypt my data in a Cloud to ensure that I can live in a relevant degree of privacy, then we are building a world where poor people cannot afford privacy. Is not privacy a basic right like freedom? Will these technologies be reserved for people who can’t afford it? Will this technological gap be reinforced by the growing inequalities within countries which can be seen in a very acute form in Russia? North America has always had a pride of being the birth place of the middle class. As we move forward, the middle class as we knew it from 1980 was not more than a fad. In the last 30 years, if you look at the incomes of top 20% earners vs. the bottom 20%, the top 20% went from being the 7 times greater than the bottom in 1980 to being 14 times greater by 2005 — the dramatic polarization of income is more than it has ever been. How does that change consumer behaviour? A lot of major American department stores, such as JC Penney and Sears, which were shopping destinations for the middle class for 40 years, are absolutely decimated now. There is a tremendous growth of the luxury end and of the discounters. Everything in the middle has been completely obliterated. The problem in North America is that there is not a middle class that consumes less, there is less middle class to consume. This situation is happening in cities like San Francisco with its massive tech investments. There is a lot of incredibly rich people, who are pushing the poor out of the city, because the poor can no longer afford to live in the city. It is causing a lot of tension and violence. That city is known for economic disparity. Unless something is done about it, it could lead to revolution. Perhaps one solution to this growing consumer gap is the rise of the general awareness of the benefits of limiting consumption. Can we buy only what we need? Is there any point where people get enough retail? Is it possible to saturate the market? For sure. You begin to run into channel conflict and product redundancy. The rule of thumb is that this occurs when multiple retailers in the market are selling the same things. When there is a unique product or unique way to sell and experience it; that is healthy growth. When you start to have the same retailers selling the same things, it is unhealthy for the market and market price. It is what is happening in North America, there is a tremendous proliferation of products and huge competition among the channels, and what’s happening is that everyone begins to undercut prices, and this tends to be not very healthy for the retail economy in general. It depends on how Russian retail develops and on the degree to which government allows the entrance of foreign retailers.

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Most of the shopping malls in Russia are very popular and considered as a territory of freedom: clean, warm, and bright places which have become destinations for entertainment and leisure as well as shopping. In your opinion, how will shopping malls evolve?

“The problem in North America is that there is not a middle class that consumes less, there is less middle class to consume. Unless something is done about it, it could lead to revolution”

The shopping mall is North America is dying because we don’t need as much retail footage as we have now. In the US there are 4.3 square metres of retail per person. Americans have not built any new shopping malls in 10 years. In fact, they are closing many of them, because retailers are beginning to acknowledge that we need them to distribute experiences. Russian consumers are still in the stage of getting a feeling what capitalism feels like — this access to goods and democratization of shopping is responsible for the growth of shopping centres. You will probably benefit from the American experience of retail shops. In Canada we have about 2 square metres of retail per person, and I think we are at the right level. Right now we have a lot of US retailers coming to Canada to open stores, and Canadians are in danger of over-retailing. The amount of retail space considered as sufficient depends on the culture. In Europe it is dramatically less, because they tend to favour smaller shops. In Sweden, they have about 0.5 square metres per person, but they seem to have everything they need.

Retail as the business of shopping has a negative image, sometimes even an evil one, but we are all voluntary and most of the time happy daily consumers. Beyond the clichés of consumerism, what are the fundamental values of retail? It has the potential to be both: good and evil. Retail becomes evil when society becomes intoxicated by consumption; it leads to bad behaviours — we pay less attention to the quality of products, we care less about where the things were made, and the working conditions under which they were made. Ultimately, we wind up in a situation where retail that does not contribute back to society. Now we are becoming more considerate about what we buy; consumers are more aware of services like worker rights — we are trying to find the ways in which retail has the potential to give a lot back to society. When retail runs rampant, it has the potential to do some nasty things. If we are making highly conscious decisions as consumers, we are contributing to the bettering of retail. If we are willing to sell our souls to Walmart, because all we care about is getting the things that we need inexpensively, then we are doing injustice and creating the problem. ♦

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Who is a Moscow consumer: how much does he earn, where and what does he buy? What is the distinction of consumption habits between generations? What is the Muscovitesâ&#x20AC;&#x2122; demand for retail? This research focuses on a portrait of the Moscow grocery store consumer, since grocery shopping is an everyday ritual for most Muscovites, regardless their social status, income and age.

Albina Nurgaleeva

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THE MOSCOW CONSUMER: PORTRAITS, HABITS, DEMANDS “The most important achievement of the last 20 years — is the unprecedented jump from a deficit economy to a consumer society” Alexander Auzan24

Moscow is one of the world leaders in retail turnover, along with London and Paris. According to Knight Frank, in the next three years, the floor area of shopping centrecentres in Moscow will increase by 45%, meaning that the Russian metropolis will have the most retail space among all European capitals.3 Retailers will compete for the Muscovite consumer even more. Therefore, as retail plays an important role in the city development, so too could сonsumers behaviour and demand affect the urban environment favorably. Who is a Moscow shopper: how much does she earn, where and how does she buy, what are the generational distinctions of the consumption habits of Muscovites, and what is the Muscovites’ demand for retail? The focus of this research is to create a the portrait of the grocery store consumer, as it is an essential part of the daily routine for most Muscovites, regardless of their social status, income, or age. Observations of the buyers and their behaviourbehaviour shows us key trends in daily routine consumption. For example, people of a certain age usually buy roughly the same set of products, even the same brands in stores, whether in a premium or discount shop. Not surprisingly, poorer people choose discounters for affordable prices, while upper middle class Muscovites are willing to pay more for a higher level of service. Young Muscovites consider buying products an unpleasant chore (yet they go for groceries several times a week), in contrast to older people for whom going to the grocery store is a process of socialization. Discussing main problems of buying food in Moscow, citizens emphasized a lack of convenience stores, shortages of fresh and natural products at a reasonable price (especially for those who live in the city centrecentre), and bad service in general.

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This report represents a synthesis of a number of sources: — official statistics and expert evaluations; — analysis, reports, and other published materials; — my own observations in premium (where the average bill is 942 ₷6) and discount (with an average bill of 453 ₷6) supermarkets in two parts of Moscow (in the areas of Lubyanka and Kuntsevo); — survey data (n= 60 people, aged 22–45 years, working in academic fields).

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How Much Do Muscovites Spend? 70% of revenue is spending in retail 19 000 ₷ Average Muscovite spends on groceries every month 708 ₷ is average bill in a grocery store

Where Do Muscovites Go Shopping? Supermarkets, and hypermarkets, chain stores

58%

Neighbourhood stores Shopping centers Discounters Small wholesale shops Local markets Online

How Often Do Muscovites Go shopping?

21% 18% 14% 11% 5% 3%

Several times a week

51% Every day (35 to 44 — 38%)

32% Once a week (60+ — 18%)

13% Less than once

Source: Moscow Department of Trade Service; ROMIR Monitoring; Levada Centre, Cushman & Wakefields

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How Much Do Muscovites Earn and How Do They Spend?

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According to StartUp, a firm of marketing analysts, the greatest interest of Moscow retailers today is the socalled middle class, who determine “consumer demand for consumer goods.” Premium and mass market brands are competing for this class of consumers. It turns out that these shoppers can have a real impact on the development of the retail trade in Moscow, as retailers cater primarily to their demands. There is no consensus about who can be classified as middle class, as well as its share of the population in both Russia and Moscow. The reason is that there are no clear criteria of what it is to be middle class in Russia. Maxim Reshetnikov, the Head of Economic Policy and Development stated that 10% (1.2 million) of

Bank manager 1C Programmer Average official Taxi-driver Experienced Accountant Sales Manager Design engineer Construction site supervisor Personal driver Architect Surveyor Graphic designer STSI lieut Maths teacher Mail teller Nurse Assessor Seller-cashier at the grocery store Young Marketing Specialist Seller-cashier in McDonald’s Dishwasher Young Teacher in University, Department of Foreign Languages Researcher with a degree (in the budget facility) Concierge

120,000 ₶ 83,000 ₶ 81,600 ₶ 60,000 ₶ 60,000 ₶ 55,000 ₶ 53,000 ₶ 53,000 ₶ 52,000 ₶ 52,000 ₶ 50,000 ₶ 47,000 ₶ 42,000 ₶ 40,000 ₶ 34,000 ₶ 30,000 ₶ 30,000 ₶ 29,000 ₶ 25,000 ₶ 20,000 ₶ 20,000 ₶ 17,000 ₶ 15,000 ₶ 6,000 ₶

Source: rabota.yandex.ru

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Muscovites can be classified as well-off, or upper class, having an income above 96,000 ₷ per month per person. More than half of Muscovites (7.2 million people) have an income of over 25,300 ₷ per month, and this category was described as the upper middle class. And finally, a third (3.6 million people) of Muscovites have an income of less than 25,300 ₷ per month, and can be labelled lower middle class.13 It is interesting that people who are below the poverty line are not identified in this report as a separate category, meanwhile, according to sociologist Nataliya Tikhonova14, more than 10% of Muscovites can be considered poor: their income is below the poverty line (less than 12,452 ₷ per month for people of working-age population; 8,000 ₷ and less for seniors; less than 10,000 ₷ for children).

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I Official Statistics

”Quality of life in Russia will be comparable to that in Europe at about the time when we spend on food as much as the Europeans“ Sergey Galitsky

10%

Well-off class > 96,000 ₽/month per person

60%

Upper middle class an income of over 25,300 ₽

30%

Lower middle class < 25,000 ₽

founder of “Magnit” grocery supermarkets chain / Forbes, April 201415

II Complex Approach (any of three criteria) 35% 2

32%. 1

”I think Moscow is obviously a wealthier city with more advanced consumers, for whom having more is a competition. Obviously Moscow would be #1 with something like 50% of the luxury market if you think about the high-end. That’s the Muscovite consumer“ Alex Sukharevsky

partner at McKinsey, Russia20

25%

1. Financial Status (25%) ▪ Monthly income is 60,000 ₶ per family member, including children ▪ An apartment, which has a room for each family member ▪ A car (foreign made) not older than 7 years savings, which can give six months living without changing lifestyle

2. Career and occupation status (32%) ▪ Most adult members of family have higher education ▪ One of the member of family is an executivemanager/high-skill professional/entrepreneur

3. Self-identity, evaluated above average (35%) ▪ Evaluated above average their welfare (1 — very poor, 9 — the richest)

▪ Evaluated above average their personal power (1 — the disenfranchised, 9 — with the greatest power)

Source: Economic Policy and Development Department of Moscow; Алина Пишняк, “Институт Гуманитарного Развития Мегаполиса, 2013”

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Generation Determines Habits

Although income determines what and how much a person can afford to buy, consumer habits are affected by different characteristics: age, education, and cultural values amongst other factors. The theory of generations (Howe and Strauss, 1991) seems relevant in terms of segmentation by social demographics. American scientists have identified a pattern that people who belong to one generation have similar core values which influence their behaviour throughout life, and it is not associated with age-related controversy. Evgeniya Shamis25 (adapting this theory in Russia) gives an example of the so-called phenomenon of “eat a plate until its empty”: “It occurs when a grandmother tends to feed her grandchildren well and say, ‘the last piece is the most important’. So it is one of the values of generation which survived hunger and wartime — frugality, preservation of life”. According to the theory, the following generations live and work in Moscow now: Winners, the Silent Generation, Baby boomers, “Latchkey kids” or Generation X, Millennials or Generation Y, and Generation Z.

When We Were Born Definelty Makes a Difference Demographic Pyramid of Moscow

X latchkey kids baby boomers

1,918,980

Y milleniums

1,237,598

silents 1,483,132

winners

1,236,904 2,009,210

1,632,395

Z digital natives 779,475

1,279,547

742,959

31,000

1900–1923

1923–1943

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1943–1633

1963–1984

1985–2000

2000+

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VISITING THE GROCERY STORE A S A PA R T O F E V E RY D AY E X P E R I E N C E

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THE WINNERS AND THE SILENTS (AGED 71+) 14% (1.5 mln)1

If we consider people over 70 years in the context of generational theory (1.5 million Muscovites, or ~ 14%1) the spending habits common to all of them are traditionalism, price sensitivity (this is due to historical factors as well as the fact that now these people are living on a small pension), trusting the media (radio, newspapers), and keeping up with the Joneses. These customers are likely to be found in the morning and afternoon in a discount supermarket. In premium supermarkets, older pensioners are very rare (at the time of observation for this study I have not seen a single one). A typical purchase set of the Winners and the Silents include: local vegetables (potatoes, onions, carrots), cereals, milk, sausage, apples and bananas, and sweets — fruit jelly, marshmallows, cookies. Also, according to the sellers, old Muscovites are the most capricious customers. They spend a long time in the shop, meticulously choosing food (20–30 minutes).

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BABY BOOMERS (AGED 51–70) 23% (2.9 mln)1

Born after the war, having began professional careers in the days of Cold War (2.9 million, or ~23%1), and therefore used to spending hours waiting in the queues, this generation are nevertheless still young enough in order to assess the diversity of shopping. However, baby boomers perceive grocery store shopping as an inevitable routine, and they are mainly visitors of district discount-supermarkets and traditional food-markets. This category includes both working people and pensioners, and a significant part of the baby boomers are in the former category. Older people in this category can be found in most discount stores in the afternoon (grandmother with grandchildren) and early evening (6:00), while younger baby boomers come into the store after work, at around 7:00. Their average shopping basket includes cheese, meat, sausage, vegetables, dairy products, and canned foods. What is interesting is that baby boomers would never walk past a queue, and they’d always check what’s being sold. These people are the main buyers of sausage and bread (regardless of the status of the store). They also pay attention to sales and products with special price tags.

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“ L AT C H K E Y K I D S” O R G E N E R AT I O N X ( A G E D 3 0 – 5 0 ) 30% (3.9 mln)

“Latchkey kids” make up a third of the population of Moscow (3.9 million1). Having witnessed long queues, shortages, and the wild capitalism of the early nineties, the Latchkey generation nevertheless lived most of their life in the consumerist society as seen in the West. The first major shopping centres, which appeared little more than 10 years ago in Moscow, focused on these customers, and adjusted somewhat to their needs: a lack of entertainment, the demand for brands, and at the same time “omnivorous” family shopping trips. Among the values of this generation is the possibility of choice and pragmatism. People of this age are the main target audience of premium supermarkets. Observations showed that on weekdays (after work) the main influx of people of this age in stores like “Pyaterochka” was between 7–8 pm, and in the “Azbuka Vkusa” — a couple of hours later, while on the weekend this was mostly after lunch. Men of this generation can be seen at the grocery store as often as women, but men prefer to avoid queues and generally spend less time at the grocery store. Moreover, we can find men among buyers in premium stores even more than women. When selecting products, one of two women look into the composition of products. Consumers of this age were the most financially secure of Muscovites (migrants from Central Asia are an exception). In a poll, the Muscovites of this age (white-collar jobs, average income) said that the important things for them at the grocery store are the service, a selection of fresh food, close proximity to home, and a reasonable balance of price and quality.

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Elena, 37, fine-art teacher Family members:2 adults and a child Monthly budget for food and daily goods: 10,000–15,000 ₷ — I choose to shop closer to home. I am trying to not buy food with synthetic ingredients. I would love to have at my neighbourhood a corner store such as LavkaLavka, but a bit cheaper. Timur, 35 years old, psychologist Family members:2 adults Monthly budget for food and daily goods: over 20,000 ₷ — Saving time is more important than saving money for me. So, I prefer short distance to the home, quick service, and shops open 24 hours. Olga, 34 years old Family members:2 adults Monthly budget for food and daily goods: over 20,000 ₷ — We buy everything in the supermarket near home. My principle is: always remember how much money is left on my credit card so as not to embarrass myself at the checkout. Dasha, 30, a marketing strategist Family members: 2 adults and a child Monthly budget for food and daily goods: over 20,000 ₷ — My store selection criteria: quality of products, availability of particular products (Chinese tea, a certain brand of barbecue sausages, my favourite body scrub, etc.), and additional cool things for my child (toy-trolley etc.). When I need to buy something (not food or daily goods), at first I do research on the Internet, and then go to a particular store or order it delivered to my home. Alexander, 31, sound engineer Family members: 2 adults Monthly budget for food and daily goods: 15,000–20,000 ₷ — Price and quality, well-stocked aisles, a lack of queues, and proximity to my house are important. Nadezhda, 36 years old, event coordinator Family members: 2 adults Monthly budget for food and daily goods: 15,000–20,000 ₷ — Ideal food store in Moscow? I would mix Auchan with a vegetable market, and would like to have it close to home. I have a rule: do not buy what I am not certain, and to make a list before shopping to avoid being distracted by the unnecessary.

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M I L L E N N I A L S O R G E N E R AT I O N Y ( 1 4 – 2 9 ) 20% (2.5 mln)

The majority of marketing research focuses on the study of this segment of the retail audience today. Today’s 20-year-olds grew up at the turn of the millennium. Accustomed to the fact that the world is global and limitless, they are “prosumers”: more sophisticated buyers than any other generation. The Euro RSCG Worldwide report, “Millennials: The Challerger Generation”,8 says that the stereotype of passive youth is outdated: “Born into a post-communist, one-model world, Millennials believe in incremental change driven by individuals rather than ideology-based revolution”.8 Millennials prefer to influence the world around not only through Facebook, but by declaring their principles through shopping behaviour. For example, they see brands not only as producers of goods, but also as carriers of certain missions (eco-friendly reputation, etc.). This generation grew up on “synthetic” goods; this is the first generation of Russians for whom the purchase of water for cooking is familiar from childhood. Overall millennials spend very little time in grocery stores — their process of selecting a purchase is fast: just take from the shelf what is necessary, pay, and leave. The set of products in the average Gen-Y basket include yoghurts, snacks, cola, beer, water, cheese, cereals, greens, and fruits. This generation is eating less bread than others, and pays attention to packaging design. The majority of Gen-Y respondents stressed that in Moscow they lack small farmers’ markets and small grocery stores with fresh food in their neighbourhoods.

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Dilya, 24, social media analyst Family members: 2 adults Monthly budget for food and daily goods: 10,000–15,000 ₷ — I always try to buy products in recyclable packaging (paying attention to marking). The best shopping is in Europe, people there are smiling and doing small-talk. Svetlana, 28, student Family members: 2 adults and 2 children Monthly budget for food and daily goods: 15,000–20,000 ₷ — We buy groceries at the supermarket near the house, and choose the shop by the variety of products. My buying rules: do not buy books if I have any unread in the house, do not buy harmful products, and try not to buy plastic bags. Iana, 27, architect Family members: 1 adult Monthly budget for food and daily goods: up to 5,000 ₷ — For me what is important are choice, expiration date, and price. In Moscow the products are generally very bad. My purchasing motto is: if you stand in the dressing room for half an hour — do not buy. Alexander, 27 years old, ad copywriter Family members: 1 adult Monthly budget for food and daily goods: up to 10,000 ₷ — I’ve heard a lot about all sorts of “E” and harmful preservatives, but in practice I do not use this knowledge. The ideal grocery store for me in a perfect world is something like LavkaLavka, but near my home, with the ability to see the products with my own eyes. Marina, 26, a travel agent Family members: 1 adult Monthly budget for food and daily goods: up to 20,000 ₷ — Convenience of the location, working hours, and fresh food are very important. My ideal is a food market with fresh local food close to home. Nic, 25 I want some local bakeries in my neighbourhood. Just to go down the elevator in the morning for a couple of croissants and a fresh baguette.

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W H AT D O E S T H E M O S C O W C O N S U M E R WA N T ? Something fresh Located nearby For a reasonable price

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The single biggest conclusion from my study is that over 70% respondents feel the lack of a neighborhood grocery store. Might be here is time to focus on small retail, which was pushed out by big box stores? This is not unique to Moscow, there are in Europe movements to move from giant hypermarkets to community scaled stores. So, the challenge here in Moscow is to give the business community an opportunity for retail diversification. There are a lot of issues there: distribution, local production, and small enterprise facilities. How it will develop in Russia and its capital in particular is under question. “Undoubtedly, this is a promising direction for retail megacities. . . But so far the concept of corner store as a technological network project has not been implemented yet”, — says Maxim Klyagin, an analyst at Finam Managment.5 Traditionally, the first floors of residential buildings are the place for small shops (bakery, grocery, meat, and dairy). In Moscow, this format exists but is generally still underdeveloped due to a number of reasons: the scale of microraions, high rental cost and this, as a result, reshapes the format of business there (for example, a bank office instead of a grocery shop). Obviously, this transition is easier for a few dominat chains, as it happens in Europe (Little Waitrose, M&S Simply Food, TESCO, 7/11, Albert Heijn). Some local chains (Azbuka Vkusa, X5 Retail Group) have already started this process in Moscow.5 The second model might be developed by smallscale entrepreneurs, with government support, by regulating for diversity of retail and rental prices for municipal facilities, through differentiated tax rates, and making facilities for local [temporary] food markets. These shops should be social enterprises rather than profit-driven companies. If not just retailers but also government really listen to customers, it might be that the nearest future grocery consumption routine for Muscovites will involve going to a local store for fresh produce and making regular online bulk purchases. These will be places in our neighborhoods where we can get a week’s worth of groceries, and not overpay for the privilege.

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“Here we run into the state of commercial real estate. Street retail is currently in bad condition, it does not grow, evolve, it is expensive and inconvenient. Small neighborhood stores have little chances. And they are the ones, in my opinion, government should care for the most”26 Evgeny Butman

founder of Ideas4Retail company

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Lorna Hall

“ WE A R E AT A TIPPING POINT” Interview by Albina Nurgaleeva

Lorna Hall. Head of Market Intelligence at WGSN. Lorna is a business analyst and journalist with 17 years' experience of researching and commentating on the fashion retail market. Before joining WGSN in 2009, she was the executive editor of the UK's fashion trade magazine Drapers. As the Head of Market Intelligence at WGSN, Lorna is responsible for a team of experts who keep the industry informed on best practices and innovation across all forms of retail including online and offline strategies, store design, marketing, and visual merchandising. Lorna is a regular commentator on the industry via international media and she speaks at and chairs international apparel conferences and seminars.

Consumer Behaviour Psychology has been a hot topic for retail and advertisement for the past few decades and data seems now to be emerging as the new currency. The retail industry is increasingly using these data to manipulate us in increasingly complex and intrusive manners as science and technologies progress — is there an ethical limit to this data mining or are we destined to buy what we don’t need? The consumer is getting savvier about the issues around data mining. We are already seeing people start to look at ways to adjust settings on their devices so that their internet browsing and history is more secure. The first wave of this has been coming through a lot in social networks as the likes of Twitter and Facebook look to monetize their users and justify their valuations to the market and consumers react by tweaking their settings to zone out unwanted targeting. But consumers moving to protect their data are still very much in the minority however as they start to see companies doing more tracking of their behaviour some will look to defend their privacy. Others will take a view on the value of the trade-off of rights to privacy against convenience, improved service and potential rewards and discounts that allowing retailers and brands more access to their data brings.

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What’s interesting is the type of backlash to any breaches of security around data. At US retailer Target revenues in the first set of financial results “softened meaningfully” after it admitted that 40 million payment card records were stolen, along with 70 million other records with customer information such as addresses and telephone numbers from its database. Customers lost trust and stopped buying and the repercussions for that loss of trust are ongoing with loss of reputation, possible law suits etc. This is a wake up call to retailers globally that although many customers may be happy to share their data — if you are perceived as not protecting that data, the fall-out from a breach is likely to be an immediate hit to the bottom line plus ongoing damage to the brand, damage that can be long lasting, recurring and hard to dispel. Government Regulation around data is likely to move too slowly and it will be the consumer that drives individual businesses to take a stance on data and set standards / agreements between themselves and the customer. Many urban planners and experts are advocating for the more human, small-scale and local shopping of urban mixed-use environments. On the ground, particularly in a developing cities like Moscow, the reality is different and big box stores and mega-malls are still developing rapidly. E-retail is also a growing alternatives to traditional shopping. In a Darwinian environment such as retail, are high-street shops doomed? They are not doomed but their role will, inevitably, change particularly in mature markets where online enabled shopping is likely to continue to grow. We are already seeing retailers and particularly brands reassess the role of the store and it’s job within an organization. In some markets thoughts are moving to the store becoming less about being a purchase point and more about being a service and experience centre — somewhere to pick up goods already purchased, learn more about those goods in a physical environment or just hang out and share new experiences with like-minded people. Elsewhere we are seeing the move to smaller formats within growing urban centres. It is important to understand that the impact of this on trading models will not necessarily replicate across multiple markets and although retail will, inevitably, continue to grow the demographics, lifestyles, climates and cultures of individual markets will continue to dictate the pace of change that it brings and how it evolves which will impact in unique ways on bricks and mortar stores.

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Retail is fundamentally a private activity and an apparent territory of freedom. Whilst it's clear that the free-for-all model is not satisfying, regulations are still weak in a city like Moscow. What is the role of cities in regulating retail?

“The most successful ‘regulation’ of retail seems to be coming out of the private sector rather than government or city administrations”

It is interesting to see that the most successful “regulation” (re-organization) of retail seems to be coming out of the private sector rather than government or city administrations. By this I mean that the best mall operators and landlords have realized that in order to ensure their assets remain high class and deliver high returns they need to respond to market changes and create environments and areas which have sustainable appeal for shoppers. So we are seeing cultural and consumer hubs starting to develop where you put more experiences alongside retail that go beyond F&B and traditional retail and leisure combinations. The emergence, also, of an acceptance of shorter leases from landlords to enable a more agile curation of the retail mix and adjacencies is important here. City planners/regulators should have a long term and short term vision for retail, one that takes into account demographics, and champions’ city lifestyle, culture and character and it should be clear enough and regulated enough to provide a vision for retailers and brands looking to invest in their region.

Alternative models of shopping are emerging such as localism, responsible shopping, slow food movements, the sharing economy, and so forth, all fostered by a general awareness of the limit of over–consumption. Are we already in a post-consumerist world? What we are seeing is a shift to a more considered approach to consumption, one that is placing an increasing value on services and experience over “stuff.” We are still consuming / buying but putting more of our cash into the former and less into the latter — this particularly applies to a time poor consumer in developed mature markets looking for solutions to lifestyle issues / choices. Retail, and trade in general, is a fundamental activity of a city — a raison d'être. However it is also one which is also the fastest evolving, constantly adapting to the permutations of our society — what does retail today tell us of our contemporary world? That it is transient and mobile, that we are all constantly searching for relevance in an era of too much information, that we are at a tipping point in the way we consume technology and things, that we crave real experience, that we will pay a premium for something that we can trust and rely on which provides solutions and solves problems in a world where we feel constantly overwhelmed. ♦

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What place does retail take in urban routine? People want to shop anytime, anywhere, quickly and easily. Retail more and more involves customers in the process of shopping, capturing all areas of their daily life. As a result, the consumer spends more time and money. What is the real scale of such retail invasion? We have to know it.

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“In parallel with their ceaseless consumption of time people would ceaselessly reproduce time that they mentally adjusted.” Haruki Murakami

“Sometimes people don’t want to hear the truth because they don’t want their illusions destroyed.” Friedrich Nietzsche

“Many consumers are more worried about making a bad decision and wasting their valuable time than they are about wasting money. Knowing the ways in which different people view time and how much they have to spend can help LBE owners earn valuable customer minutes.” Randy White

“Mass consumption, advertising, and mass art are a corporate Frankenstein; while they reinforce the system, they also undermine it.” Ellen Willis

“Time is what we want most, but what we use worst.” William Penn

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Invasion as a way to get profit “Price is what you pay, value is what you get.” Warren Buﬀett

Time is money not only for shoppers, but also for retailers. The more time the consumer spends on shopping, the more money the retailer gets. Consumer involvement becomes one of the main goals of retailers. Nowadays the purchasing process for the consumer extends from getting acquainted with the product to other activities after the actual purchase. Catching consumers’ attention and directing it is a strategy of both short-term and long-term profit that is directly linked with the time spent by the consumer. Invading the consumers’ time is a direct way of getting profit for the retailers.1 One of the purposes of retail business is the creating of value for the customer. On the market, customers are looking for not only a product, but for a tool to solve their problems. In the long term perspective, retailers want to shift from a single transaction to a stable relationship with the consumer based on mutual trust. This trend encourages retailers to use new technologies that exceed the consumer’s expectations. In the end, the customer becomes the user.

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65%. In Moscow, at the beginning of 2012, the working population is there almost 7.5 million people out of 11.5 million official residents. To compare this number with London, there are 5.2 million workers there out of 8.3 million people5. Generation Y (14–29 years old) and Generation X (30–50 years old) are the most preferable audience for the retailers.

Who retailers hunt for?

Most of them are financially independent, active, loyal to impulsive and expensive purchases, especially for children or relatives. According to the research by SOCPOL in 2011, the working population of Russia is about.

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How is time for shopping shifting?

The daily routine of a citizen consists mainly of work, sleep, and spare time for rest and personal affairs (including care for other people, household chores, meals, sport). The main time slot for shopping is people’s spare time. The way people spend it is changing throughout time: shopping time is steadily increasing since the working time isdecreasing in many parts of the world. For example, in the 1940s, the work week in the U.S. , Europe, and USSR lasted approximately 60–70 hours. The average citizen worked for 10 hours and rested for 6–7 hours a day. In 2011, the average length of the working day in Russia was 8.6 hours according to the OECD. Rest and personal affairs are then 7.8 hours. In the EU this index is an average of 5.8 hours a day to 35 hours a week. The forecast for the year 2040, which was made by from the New Economics Foundation,6 shows the reduction of the working week to 21 hours (4.2 hours per day). According to this research, a “normal” working week of 21 hours could help to address a range of urgent, interlinked problems: overwork, unemployment, over-consumption, high carbon emissions, low well-being, entrenched inequalities, and the lack of time to live sustainably, care for each other, and simply to enjoy life. Twenty-one hours is close to the average time that people of working age in Britain spend in paid work and just a little more than the average time spent in unpaid work. Experiments with shorter working hours suggest that they can be popular where conditions are stable and pay is favourable, and that a new standard of 21 hours could be consistent with the dynamics of a decarbonised economy. There is nothing natural or inevitable about what is considered “normal” today. Time, like work, has become commodified — a recent legacy of industrial capitalism. Yet the logic of industrial time is out of step with today’s conditions, where instant communications and mobile technologies bring new risks and pressures, as well as new opportunities. The challenge is to break the power of the old industrial clock without adding new pressures, and to free up time to live sustainable lives. It means that people will have 11.5 hours of spare time. Another significant difference in the current situation is that more and more customers make purchases during the night.

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Convenience store as the start of night-time shopping

The first convenience store was opened in 1962 by “7-Eleven”. It was an experiment in Austin, Texas. Nowadays New York City has 146 convenience stores. In Moscow, there are 156 neighbourhood stores and shopping centres, and additionally three shopping malls operate around the clock.7 14.5% of Muscovites prefer to make nightly purchases. The Moscow trade network is increasing the number of convenience stores, trying to please their audience of workaholics who are not able to buy food and goods during the day time. The Russian capital is the best place to develop night businesses because here daytime is densely punctuated with night life: people are confused about when to sleep and when to work.8 On average 20% of the total profit stores make occurs between 20 to 02 AM hours.9 In most European countries, there are late-night shops only at gas stations. Most stores in Paris and London work from 10 to 7, 6 days a week. In Europe, there is almost no day-night shopping thanks for two reasons. Firstly, there is legislative regulation of sale hours, in which some countries ban night work or create high taxes for other work around the clock . The second reason is high rates of pay for staff in the evening and through the night, which is tightly controlled by the unions.10 Convenience retailing is largely a British and Irish phenomena but consumers in continental Europe are ready for it, although store formats are still at the trial stage. Those were the key findings of Matthias Queck, research director at Planet Retail. Presenting during the

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Insight NACS Future of Convenience event in London in 2011, Queck explored the “rocky road to continental convenience”. According to Planet Retail, the top convenience markets are Ireland (15.62%), the UK (12.75%) and Finland (12.45%); followed by Switzerland (4.92%), Norway (4.47%) and Denmark (4.4%). By store numbers, the largest markets are the UK, France, Germany, Spain, and Poland. The UK, Switzerland and Poland are the leading markets in terms of growth. In contrast, continental Europe lacks expertise and infrastructure, with few producers of fresh convenience foods. Discounters and independent bakery chains also present a competitive threat. Legislation, including restricted trading hours and a ban on Sunday shopping, is another hindrance. On the plus side, there is growing urbanisation and more space for convenience stores. The consumer trends are positive too, with price consciousness, an ageing population, changing eating and shopping habits, and faster lifestyles. The time is ripe. Today you can be engaged in shopping anytime during the day, anywhere, for example even at work. 44% of employees are engaged in online shopping and search or compare products. On average employees spend 16 of 40 workings hours per week on their personal affairs. 90% of employees prefer to dilute routine workday chats, socializing with friends and colleagues. 57% regularly read news sites. But only 16% of them admit that they are distracted by extraneous things at work.11

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WHERE MUSCOVITES PREFER SHOPPING A N D H O W LO N G D O E S I T TA K E ? Data from “Romir Research Holding”12

Shopping every day

Purchases in neighbourhood stores, chain stores

Purchases for a week in neighbourhood stores, chain stores

Muscovites prefer neighbourhood stores as the main place for regular shopping

Purchase in online store

Muscovites prefer bazaar as the main place for regular shopping

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Weekend shopping regional mall

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Shopping at the bazaar

Muscovites prefer malls as the main place for regular shopping

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How much time do customers spend on retail?

In emerging markets around the world, the spending power of consumers is rapidly changing the retail industry, both globally and locally. Multinational retailers seeking new sources of growth are watching the mass markets of Brazil, China, and India, whose large populations and strong economic growth have made them nearly irresistible. As consumers have greater disposable income, they increasingly spend their money on items beyond the basic necessities. One of the first categories to feel this change is apparel. Shoppers in the emerging markets of China, India, and Brazil are clearly more enthusiastic in their shopping experiences than their counterparts in more mature markets. It seems the burgeoning middle-classes are enjoying the opportunities that their increasing disposable income and expanding retail choices present them. The differences are seen in levels of satisfaction with their shopping experience. Retailers in emerging markets are trying to find ways to address this apathy to re-engage customers and tackle tough issues around loyalty when so much choice is available. Shopping enthusiasm is most strongly felt in emerging markets. Todayâ&#x20AC;&#x2122;s shoppers have sophisticated needs, and are driven by the motivation to satisfy themselves as they seek richer shopping experiences. Our research has not only validated the equal importance placed on satisfying each of these needs, it has shown that shoppers want to have experiences rich in Dreaming, Exploring and Locating across categories. Shoppers want to be inspired to dream, whether they are shopping for Saturday eveningâ&#x20AC;&#x2122;s dinner, or something fabulous to wear on that first date. While shoppers have clearly evolved in their behaviours, it is clear that retailers are failing to keep pace. There is a significant Expectation Gap between what shoppers want from their shopping experiences, and what they are experiencing in reality. In examining shoppers who value using multiple channels (both in-store and online), we can see that retailers are failing to deliver most in the area of Dreaming, followed by Exploring, and then Locating.

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Happy shoppers

When a customer is not just satisfied, but emotionally happy with the shopping process, he is deeply involved in it. Sellers often artificially stretch the pastime of purchases and complicate the obtaining of certain goods, but in the end it does not lead to an increase in sales. Nothing engages shoppers more than getting through the store quickly. For this reason, easy shopping has to be the priority. Improving the speed and ease of shopping has been clearly proven to increase sales, both through improved category conversion (fewer lost sales), and through more incremental purchasing. In addition, the shopper who has been able to complete their trip quickly and easily is likely to return again and again, thereby increasing retailer loyalty and lifetime customer value. This pattern is echoed by the differences seen in levels of satisfaction with shopping experiences. Those who are in the emerging markets describe themselves much more Overjoyed or Happy with their experiences than those who are in mature markets. Retailers in these markets ought to find ways to address this apathy if they are going to re-engage customers and tackle tough issues around loyalty when so much choice is available. To focus on making shoppers happy, we must first acknowl-

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edge the experiences that do the opposite. We like to think of shopping as a positive experience, centred on finding solutions to satisfy wants and needs. The reality is very different. Shoppers spend their time de-selecting large numbers of products so that they can focus on the ones that they are actually interested in, and rejecting things isn’t fun. Searching is essentially a negative experience and a shopper only experiences positive emotion when he or she sees a relevant product. This brings us to our main premise: to make shoppers happier we need to make it easier for them to find and buy what they want to buy. “Make it easier for shoppers…”, sounds simple enough. But the fact is that most people consider their grocery shopping a chore, and every one of us can name some categories we don’t like to shop for. Shopping is not a destination; it is a diversion that we are forced to take on the way to living our lives. To make it easy for shoppers, we must suspend our own agenda for a while and appreciate that most of them would like to spend less, not more, time in the store. “To make shoppers happier we need to make it easier for them to find and buy what they want to buy.” Barry Lemmon, Global Head “Retail & Shopper.”

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Omni-channel shopping as a way to involve

The most important change of the last decade, society has become highly communicative. The buying process has become omni-channel shopping. It means that consumers are enable to receive whichever goods wherever, whenever. It effects involvement in the purchasing process and fully penetrates into all spheres of daily routine. Multichannel shopping covers all stages: awareness of the need, information search, pre-purchase appraisal, purchase, reviews, and discussion after. Omni-Channel retailing is the evolution of multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels, i.e. mobile internet devices, computers, brick-and-mortar, television, radio, direct mail, catalogue and so on. The more channels used at any stage, the higher the probability of purchase. Retailers are meeting new customer demands by deploying specialized supply chain strategy software. The main tool in this is the smartphone. More and more buyers use mobile devices to compare prices and find the best deal.

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The Executive Director of the Network Walmart, Mike Duke, said “a new era of price transparency coming, and believe that this event threatens to turn the business model of the largest retail chains in America.” According to IDC Retail Insights, already about 45% of customers with smartphones use them to get information about the product and make price comparisons. For example, the store Best Buy, in partnership with “The Find” serves personalized advertising to consumers when they are on Walmart site. So, if the buyer on Walmart asks “The Find” service to compare prices for some items, they will receive an offer for a similar product in Best Buy. All this stimulates the emergence of new applications that turn smartphones into a “trade weapon”, and simultaneously increases the popularity of the existing applications. For example, the application “The Find” was downloaded 400,000 times in four weeks.15 More and more shoppers are shopping online, lured by websites and smartphone apps that make it easier than ever to navigate abundant choices and locate the best deals. With a finger stroke, they can research products, compare prices, and ultimately make a purchase: on the go, or from the comfort of their sofa. Transactions no longer happen only at the till. Global e-commerce is es-

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timated to reach almost $1.4 trillion by 2015, a five-year Compound Annual Growth Rate of 13.5%. Practices like “show-rooming” — exploring in-store with one retailer but buying online with another — will continue to take more business away from physical stores unless retailers re-think what their store experiences should bring to the party. They need more seamless retail experiences that can only be developed from a truly shopper-centric starting point. The key to unlocking more complex journeys is in understanding the evolved mind states shoppers are looking to satisfy. As for the situation on the Russian market, the leader is Yandex STORE with their mobile app to compare prices and find the right product along with more information about it. More than 14,500 stores deliver the latest information about the availability and pricing of goods to Yandex.Market (on February 27, 2014 57,431,546 goods, divided into 17 categories from 14,614 stores). The app has a daily audience of more than 1.9 million people monthly in Moscow — more than 20 million people across Russia.16 The idea of a resource — professional advice on a variety of product categories. There are plenty of services focused on attracting attention and raising the profile of a product or store. For example, for obtaining 2,000 customers conversions, the seller pays about $400. The approximate time visitors spent on the site is 10 minutes.

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Invasion of time by advertisement “Marketing is no longer about stuff that you make, but about the stories you tell.” Seth Godin

A man recognizes need when his desired state does not coincide with reality (appearance, health , etc.). Advertising is such a tool which can help him understand this. It catches the attention of consumers every day. Russians spend 220 minutes in front of the TV-set per day.17 33 minutes per day is the average time spent viewing television ads by the Russian audience aged 18–49 years. The total duration of TV advertising in accordance with the “Federal Advertising Law” should not exceed 9 minutes per hour. In European countries and America this value differs by 1–2 minutes. But in Russia, there is a common belief that all items that are advertised, do not actually have the advertised properties. In the minds of most consumers, advertisement is not a way of obtaining objective information, but is the way of putting pressure on people. An average citizen spends more than 1 hour reading advertisements. 3,500–5,000 messages per day are seen by ordinary citizens. These are inscriptions, names that producers and sellers leave on goods, city objects, billboards. A human eye catches such messages and the human brain needs 1.25 seconds to perceive basic information.18 The human brain is occupied by advertisement on average 73–104 minutes at the background level. Only 7–10 of these messages are read as conscious analysis. It’s less than 1%.18. So today, when people are tired of the hype, retailers should search for alternative ways of advertising.

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Search and choice

Time spent searching for information and pricing of goods takes more than a week for 33% of consumers A person interested in a product is looking for new information using remembered information or external sources. People primarily refer to themselves, their experiences, and their memory. They can refer to the seller’s viewpoint as well, and to the opinions of their friends and family. It takes more than a day to make a decision for 67% of shoppers. 29% of customers decide in a one day period.19 According to Rover Review19, consumers are willing to make a significant investment in time when the reward reaped is finding the right product at the right price. The consumer research dynamic is still dominated by the search to find the right product quickly Efficiency and time saving are core values of online shopping. That’s why companies such as Amazon and Yandex Market become important “one-stop” destinations for finding products and comparing prices Looking for and comparing basic goods in store takes more time than consumers want to spend. A shop with plenty of choice can become a maze. Consumer Research has become a popular tool to reveal what shoppers really look at in-aisle. It is, a tool to promote specific goods, and to make customers stay longer. Consumer activity research allows us to see what shoppers are visually drawn to as they walk down the aisle to a particular category or product group.

90% of the time shoppers spend in store is on navigation and only 10% of the time is used to fill the basket and make the purchase.14 All too often, product packaging is designed in isolation. What happens when you put that same item in amongst 50,000 other products in a large supermarket? Firstly and most importantly, shoppers will approach the packet not by walking towards it, but by walking down an aisle with it hidden to their left or right. This transforms the visual appearance of the product. All of a sudden the design might not work in quite the same ways as originally intended. Fear not, there is a solution. Retailers can discover what shoppers look at as they walk down the aisle to your brand or individual SKU, hidden in amongst all those other competing product lines. Discover what customers and their competitors’ visual triggers are, and optimise your pack design to stand out in store as a direct result. In a recent FMCG visual stand out study, SBXL20 identified an incredibly powerful means by which to achieve disproportionately powerful visual stand out compared with the competing brands. In trials of a new design of layout plans, they increased the percentage of passing shoppers that looked at the sponsor brand from 17% to a much more respectable 43%.

Time of searching and comparing durable goods before purchase

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Entertainment in artificial environment

Entertainment content. It is the main way to attract people and keep them in a mall while competing with other shops. A common trend in Russia and around the world is to include large entertainment areas in shopping streets or malls with regular programs. In Moscow, for many years there has been a steady increase of the quantity of malls and shopping centres. Boring content complemented the boring entertainment found in them. This pushed owners to integrate more and more large-scale and entertainment components. In a similar way entertainment influences the amount shoppers purchase. “MAGAZIN MAGAZINOV” conducted research in several large malls in a number of different cities of Russia on the way in which entertainment effects shopping, and presented these results at the international real estate exhibition REX 2014. The average bill grows by 20%. With additional entertainment and other events, customers spend 20–120 minutes in malls on average.19 Therefore sellers stimulate not only purchasing, but also visits to the shopping centre, prolonging their stay up to 20% more than without entertainment. Such involvements help gain loyal customers, which are currently in high demand, as permanent, regular customers are a reliable guarantee of a certain volume of sales. Using these tools, sellers are always working to improve the relationship between the customer and the product, and to ensure a positive attitude towards the company, brand or product. The concepts of children’s rooms and slot machines are unprofitable and obsolete. The Russian reality is that they are idle and do not attract shoppers anymore.19 Children’s rooms are all of the same type and boring. Slot machines do not permit the mixing of different age groups, and can even lead to conflict situations. In addition, they do not compete well with modern games. New projects on the Russian market exceeded extant projects of previous years in scale, complexity and the overall cost of investments. “HOUSE OF FEAR”, “FANTASY CITY”, “FIXES”, and “KIDBURG” are all projects which converted shopping centres to leisure centres, and these have become anchor tenants.

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They are not only large; interaction with customers is built on the principles of entertainment and learning experiences for children and for adults. A variety of workshops and screenings are offered for visitors. Anyway, all these projects are copying counterparts from the U.S. , Japan, and Australia. But in Russia there is a different history. There were hobby clubs in the Houses of Culture, which existed in every city and settlement of the Soviet Union. The main difference is that they were everywhere, without a commercial component, and were part of the public education program; classes were held there regularly. In a similar way the entertainment component influences consumer spending on other purchases. Another way to look at the changing shopping landscape is from the perspective of time and its value to people today. Feeling time-pressured, consumers want to get the most bang for their buck when it comes to spending their time on almost anything. Time has a much greater value to society than it did in the past. For many consumers, their time is more valuable to them than their money. So if we’re going shopping, we’d rather not make it a chore. Retail place-making is more complicated than just building retail spaces, leasing them, and managing the common areas with special events such as Santa Claus and fashion shows. Entertainment venues such as bowling alleys, family entertainment centres (FECs), aquariums, family pizza buffet-entertainment centres, children’s edutainment centres, adult entertainment concepts, children’s play areas, and even sports venues and dedicated space for rotating museum-quality exhibits are becoming the new anchors for both lifestyle centres and enclosed malls. Cinemas alone are no longer enough; there needs to be a variety of entertainment options yet there is a very limited number of chain entertainment tenants to choose from. Today, retail is in the entertainment, dining, and destination leisure business as much as it is in the shopping business. The successful malls and shopping centres of the 21st Century will be run by placemakers, not landlords. You sometimes go because it’s just a great place to be. As planners say, retail streets and malls must engender a “sense of place.”

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Buy your time â&#x20AC;&#x153;All the economy finally comes to the time saving.â&#x20AC;? Karl Marks

There are a lot of ways to save time, and manage it more effectively. Smartphone applications have become an impartial coach. They give summary analytics and an accurate picture of how to spend time. In the end it helps citizens become more productive every day. Apps make it possible

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to view and organise time for today, tomorrow, years in the future or past, to scroll the timeline or pick a date and jump to it, to link it to GPS coordinates, write paths and calculate time, to show detailed reports wherein physical space or websites were browsed, to show how much time spent in different categories, how productive the user was, and whether he achieved his goals. The user can set goals to keep him on track and improve his productivity, as well as giving him the ability to view his progress on a dashboard, in a weekly email report, and in the goals report.

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Apartment cleaning service. General cleaning and maintenance. Daily, households spend 1.1 hours on cleaning. Monetarily, this is 3,000 ₷. The price for a month will start from 10,000 ₷.

Companies provide professional car service at convenient times. On average, residents of Moscow spend more than an hour a day on road trips. The minimum service order is 4 hours for 4,000 ₷. The price for a month will start from 25,000 ₷.

Child- or Elder-care. In a day, usually 1.2 hours is spent on this, and the price of this time is 1,000 ₷. The price for a month starts from 15,700 ₷.

Shopping service, where goods are purchased from a list from a variety of stores with 24/7 home delivery. The price for this service is 300–1,000 ₷.

“Buy my time”. A service that helps you to sell or to buy a meeting with another person. People just sell their time on a market. Similarly, for example, when you get a job, you are also selling your own time, only wholesale. And on this site you sell your time at retail, and you can choose whom to sell it to or not.

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Mattias Kärrholm

" RE TA I L I S I N G S PAC E "

Interview by Daniil Gavrish

Mattias Kärrholm is an Associate Professor in Architecture at the Department of Urban Studies, Malmö University College, and at the Department of Architecture & the Built Environment, LTH, Lund University. His research deals with the theoretical and conceptual aspects of territoriality, actor-network theory, materiality, space and place, and has primarily focused on this as related to aspects of material / architectural / urban design in public places. He has published in journals like Urban Studies, Social & Cultural Geography and Society & Space. His current teaching includes courses in architectural theory, theory of science, and sustainable urbanism.

You have developed the concept of the retailising of public spaces. Could you elaborate for us more around the concept of public space and retail, and explain how it specifically affects our urban routines? One tendency seems to be that large retail areas, including central pedestrian precincts, tend to grow larger and more monofunctional. Smaller production sites, housing, playgrounds, and so on, move out and retail takes over. Smaller retail areas close down. This affects public space as the areas mainly attract the working middle class, whereas others feel excluded and even avoid the area altogether. At a more fundamental level, large consumption worlds produce desires for new commodities, and are, as such, also playing a role in the production of a, both socially and ecologically, unsustainable consumer society. Excessive consumerism, especially in the western world, is a huge global problem.

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Retail has pervaded into every aspect of urban life, participating in a certain standardisation and globalisation of our public realm. In these conditions, how can a district retain a certain authenticity? In Malmö, Sweden, which has been my main object of study, the City association tries to keep down the ratio of chain stores to independent stores in the inner city. Holding more local events is another popular strategy. These might be possible ways, but I do not think that it is enough. I think that we need more diversity, both in terms of mixing retail with non-retail activities (civil society, public facilities, work places, housing), and in terms of design. One tendency seems to be to “over-design” retail areas with uniform design programmes. This, coupled with a fear of interstices and non-programmed areas make it hard for these areas to afford unplanned events. The area might become vibrant as a consumer space, but also predictable, and in the long run quite dull. There is no room for new types of activities. Retail can be a powerful tool for creating vibrant city life or creating dull, left-over spaces. How can local authorities better regulate retail to maximize the positive impacts and minimize the negative ones? Will over-regulation kill spontaneity? Over-regulation might certainly kill spontaneity, but in Sweden the problem has been the opposite. There has been almost no regulation of retail at all, and this seems to be just as problematic. Slowly we have seen how local shops close and give way to ever-larger and effective, but predictable, retailscapes. In your book “retailising space”, you mention the concept of the “territory of shopping”. It links intense pedestrian flows, retail spaces, and public transport networks. We can see such examples in developed cities like Tokyo or Hong Kong. In Moscow, this model is uncommon as this model of integration between different public and private actors has yet to materialise. What are the main conditions for these new territories of shopping to emerge? Cooperation between public and private interests, for example in the form of a retail or a city association seems to be important. Density of population, good regional infrastructure, and the presence of large international actors are other factors. But the problem that interests me is rather: Why are large territories of shopping used as the default solution to an economically viable retail? Even though the rhetoric has changed, it seems as if retail is still following a modernist zoning paradigm.

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In your opinion, what are the critical characteristics of a model of retail development which can blend harmoniously with the city? A greater variety of retail building types, including the invention of new ones. A public space of territorial complexity: that is less of hierarchical territorial structures (shops inside malls, inside retail areas), more spaces where different activities such as retail and non-retail activities are mixed, and a greater sensitivity to temporal diversity (how activities can change over time). Finally, I also think that the concept of sharing and local collective consumption might be an interesting path to explore further. How will existing typologies of retail spaces adapt to the emerging WWW (Whatever, Whenever, Wherever) paradigm, or will new typologies of retail space emerge? How might these emerging technologies — such as digital advertising — impact urban spaces? Online shopping is already changing the retail landscape in many countries, and it is one of the upcoming challenges of urban planning. Mega malls may have outlived their time. I do not know what will come next, but I think that the challenge now posed by emerging technologies might force us to rethink public space. Consumption has been seen as a default recipe for good and vivid urban space for too long; we need new conceptions of public space. Today retail is changing faster than ever. What new technologies, new techniques, new opportunities of retail penetration will influence urban planning in the nearest future? I think that a more intense focus on the interface between technology and public space will produce new hybrid spaces. What forms that will take, and how it will affect urban planning remains to be seen.

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g sin y es Bu sâ&#x20AC;? Pr u r n

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Can you reach it? Can you touch it? You will buy it. You think you’re getting a deal. You are not. You will buy it. You didn’t want it. You’re not sure you even like it. You will buy it. In the world of retail manipulation your preferences and choices are meaningless. The only thing that matters is your bank balance.

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“The junk merchant doesn’t sell his product to the consumer, he sells the consumer to his products. He does not improve and simplify his merchandise. He degrades and simplifies the client” William Burroughs

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T R I C K E D A N D T R E AT E D AND TRICKED AGAIN You are buying spaghetti. Your usual choice is everything you need it to be: tasty, affordable, and consistently good. But the big name brand is on offer, and besides there’s this whole grain variant you’ve been wanting to try. You get two to get the discount, and before checking out, you pick up a matching pasta sauce. You need that for a sense of completion. Plus, it’s displayed on the next shelf. The final result is that you spent 10 minutes more in the store than you normally would, and your bill is twice as high.1 Nonetheless, you leave believing you got a good deal. According to Cushman & Wakefield,2 for the average consumer living in Moscow, roughly 70% of everything they earn is spent on retail, which comprises approximately 7,619 Euros, or 378,628 roubles, per year. Up to 70% of all purchases end up in the category “more money spent than was originally intended”.3 In fact, at any given time most people are walking around with at least one item they did not want in the first place, or a more expensive version of their preferred option. The estimated market value of this addition to our intended spending lies somewhere in the neighbourhood of 61 billion Euros, or more than 3 trillion roubles, annually for Moscow alone. The reason why we systematically waste our time and money on spontaneous purchases lies in subversive manipulation techniques. Even though most companies try to grab our attention in very obvious ways, almost all of them also include elements we don’t consciously observe, and it is exactly these elements that make us open our wallets wider than we intend to. So what exactly is manipulation in retail? As Psychology Today claims,4 each of us is subjected to 3,000 to 10,000 brand exposures every day through TV commercials, outdoor billboards, website banners, and even neighbours’ T-shirts, or co-workers’ coffee mugs. Because we’re inundated with brands, retailers draw on the latest psychological research and employ a variety of tricks to catch our attention and gain our confidence. However, this practice isn’t new. In fact, some of the earliest writers in the marketing field were professional psychologists. The major practical use of psychological concepts

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was found for the first time in the advertising and sales literature, with emphases ranging from structuralism and functionalism to behaviourism. The first ideas about marketing strategies sprang up around the beginning of the 1900s.5 The realization was that a company’s profit lies not just in the purchases being made, but also in the desires of the consumers. What followed was a rapid development of advertising techniques and salesmanship. The resulting expansion of the market changed the playing field in such a way, that currently, for almost all big brands, more money is spend on marketing than on the actual product itself. Nowadays the ultimate aim of any retailer has become to identify our “buy button” and get us to act or feel in a certain way about the company’s products or services, while at the same time making it seem like it was all our own choice. To achieve that, retailers employ a set of manipulation techniques that affect our psycho-physiological and neurological state, appealing to our needs, inclinations, values, feelings, logic, and senses.6 In the end, the true intention of a company, to sell a product, is cunningly obscured. No wonder that when we walk into almost any store, we are immediately overloaded with sights, sounds,

“All over the place, from the popular culture to the propaganda system, there is constant pressure to make people feel that they are helpless, that the only role they can have is to ratify decisions and to consume” Noam Chomsky

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1895 HARLOW GALE One of the earliest psychologists to work in advertising, send a questionnaire to Minnesota businesses to study how people process ads. Only 10% of businesses responded, but firms would later change their tune.

2012

1903 WALTER DILL SCOTT Published “The Theory and Practice of Advertising,” in which he argues that people are highly suggestible and obedient. He is credited with giving scientific credibility to psychology’s involvement in retail.

2005

TV advertising brings in $140 bln, Google advertisement nets $43 bln, ads upstart Facebook manages $4,23 bln

First human advertisement space sells forehead real estate to advertisers

1920 JOHN B. WATSON Said that effective advertising appeals to three innate emotions: love, fear, and rage. He also believed in celebrity endorsements and market research, using demographic data to target certain consumers.

1995

First pop-up advertisements begin to annoy internet users the world over

1905

The first celebrity endorsement occurs when a silentmovie miscreant offers proof that Murad cigarettes are the preference of men of cultivated taste

1873

The first product placement occurs when transport and shipping companies are mentioned in Jules Verne’s novel “Around the World in 80 Days”

1661

The first product branding is developed in the US for Dentifrice Tooth Gel

1472 2000 BC

The first print advertisement is created in England, the handbill announced a prayer book for sale

The Egyptians invent outdoor advertising, carving public notes in steel

Sources: Benjamin and Baker, 2004. Goodwin, 1999. E N O U G H

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Stages

Brand penetration Brand strategy

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NEED RECOGNITION

INFORMATION SEARCH

Features of consumer: uninformed, change is possible, maintaining status quo

Features of consumer: seeking information, re-evaluating possibility of change and consequences of inaction, defining the needs

Visibility

Attributes

Penetrate the market

Influence consumer’s perception

Raise consciousness, become and stay top-of-mind choice

Manipulation formats

TV, internet, outdoor advertisement, movies, word of mouth, games

smells, and various things to touch. For example, colours have all sorts of impact on how we spend. The colour red has been show to make us aroused, and to stimulate our spending, while black makes us overestimate the value of something.7 When browsing through a shop with literally thousands of products, it is the colours that we spot from a distance that shape our first impression. Naturally, it’s not only colour. Retailers also tap into our subconscious by putting navigation obstacles on our way. For instance, people often drop by a store just to buy a single essential item, like milk, but this section is located in the back of the store. Therefore, we are forced to make our way through the whole store and see everything before reaching the milk. Chances are, most of us will grab another item or two. Looking at it this way, the in-store purchase is only one of the steps that comprises a complex process of decision making that has occurred before and continues after. From the perspective of a retailer, this process could be described in five stages8:

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Portray the post-purchase future

Magazines and leaflets, brand’s website, social networks, TV

Stage 1 — Need Recognition. You are going out to the gym, but you are out of deodorant. You will need to buy a new one. Stage 2 — Information Search. You’ve been using your current brand for a while, but an advert on TV shows you a new brand that your friends have been using. Stage 3 — Alternative Evaluation. The brand you currently use leaves stains in your clothing, and the new brand promises a stainless effect, as well as a longer lasting protection during more intense activity. Stage 4 — Purchase Decision. You decide that you want to try the new brand, so to head to the shop and buy it. Stage 5 — Post-purchase Behaviour. The new brand smells good, and while you are not sure it actually gives better protection, you would buy it again. At any of these five stages, retailers intervene to manipulate us into buying their product. For instance, an advertisement might make us feel insecure about the way we smell after exercise (Need Recognition), or offer

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EVALUATION ALTERNATIVES

PURCHASE DECISION

Features of consumer: investigating, gathering definitive information, considering and evaluating alternatives, establishing a preferred option

Features of consumer: selected preferred option, prepared the budget and agrees with terms

Choice

Action

Show supremacy over competitors

Demonstrate fit and trigger action

Show expertise and excellence

Overcome possible objectives and complete the transaction

TV, internet, magazines and leaflets, stores

Location, store layout, pricing, packaging, service

POST-PURCHASE BEHAVIOUR Features of consumer: agreement is signed, expectations are met, the benefits are acknowledged

Experience Reinforce value delivery Maintain personal contact

Tools: newsletters, call center, social networks

Source: Tyagi, C.L. and Arun Kumar. Consumer Behaviour: Atlantic Publishers and Distributors, 2004. Print.

“Experts in ancient Greek culture say that people back then didn’t see their thoughts as belonging to them […] it occurred to them as a god or goddess giving an order. Now people hear a commercial for sour cream potato chips and rush out to buy, but now they call this free will. At least the ancient Greeks were being honest” Chuck Palahniuk, Lullaby

coupons with each purchase to encourage us to stick to the brand (Post-purchase Behaviour). The retailers might simply use a catchy jingle or a funny scene in a commercial, making sure you remember their brand and remember it (Information Search). Undoubtedly, retailers will never cease to come up with new manipulation techniques by turning us into their research subjects. In fact, shoppers have been turned by retailers into lab rats: as soon as we walk into the store, our footsteps, eye movements, choices, and reactions are carefully observed and monitored. We become a statistic to be analysed, and based on this analysis, retailers can calculate with astounding precision how exactly the stores should be redesigned and deals should be allocated in order to make us spend more. Curiously enough, notwithstanding the fact that a lot of us are very well aware of the techniques retailers use to trick us into buying, this knowledge doesn’t stop us from making impulse purchases. Like children, we blindly follow the suggestions imposed on us. It seems that on a primitive level, we might even enjoy being manipulated.

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SEX SELLS WICKED BASKETS P I C K YO U R L I F E S T Y L E JUST LIKE ON THE PICTURE A N N OY I N G J I N G L E RIFFLE AND SHUFFLE UNREAL DEAL D RA M A Q U E E N J U S T LO O K AT YO U ! POW E R D I S P L AY T H E WO R L D O F FA N TA S Y DEAL-HUNTING G L I T T E R I N G G E N E RA L I T Y SPUR OF THE MOMENT CO O L C ROW D S AY I T AG A I N E A S Y S TA RT SEX APPEAL PLAIN FOLK O N YO U R WAY SHAKE AND SHOCK I F E E L YO U , S I S T E R PAV I N G T H E PAT H CO U N T D OW N LAST 2! SOUNDS GOOD BEST FOR THE END “J A N E S AY S I T ’ S AW E S O M E ” E F F E C T TO T H E L E F T, TO T H E L E F T A S I F YO U W E R E T H E R E AND THEN? AND THEN? S AY I T L I K E A M A N A B S O L U T E LY T H E B E S T E S T. E V E R . M A K I N G M O U N TA I N S O U T O F M O L E H I L L S O N LY B E T T E R B E T T E R T H A N H E AV E N F I R S T I N S H OW DON’T QUESTION IT S PAG H E T T I S A U C E A N D PA S TA L I F E I N B R I G H T CO LO R S ACO U S T I C F O RT R E S S SHINGING BRIGHT E T E R N A L A DV E RT “A RT ” B E LOW YO U R F E E T H O L I DAY P LOY S CO LO R S E L L S S E N S E O F TO U C H “ E S S E N T I A L” L AYO U T S M E L L O F P U RC H A S E D OT T H E L I N E YO U ’ R E H OT A N D YO U ’ R E CO L D FRESH AS AN APPLE

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GO ON C H AT T E R B OX “HANDMADE” PRICE SMALL SIZE = SMALL PRICE B U Y - O N E - G E T - O N E - F R E E - N OT A N D T H I S . A N D T H AT. B U L L’ S E Y E CHARM PRICES MESS IT UP T I L I N G D OW N EITHER OR N O M O R E F O R YO U B A I T W I T H R E B AT E E V E RY T H I N G I S R E L AT I V E PAC KAG E D E A L S 10 FOR $10 PRICE AND ORDER D RO P T H E A N C H O R O P E N - T H E - WA L L E T - P R I C E S CO U PO N O M A N I A B A D AT M AT H T H E Y CO M E S I N T H R E E S K E E P I T S H O RT TO P A N D R I G H T PUT AND ELLIPSE ON IT FULL ON TO B E O R N OT TO B E ? NAME THEM ALL “ B I F I D O B AC T E R I U M - AC T I R E G U L A R I S ” E F F E C T CA U S E A N D E F F E C T S AY W H AT ? JUST LIKE THEM B Y S TA N D E R S F R E E E X T RA S “MY PERSONAL OBJECTIVE OPINION” EFFECT CA N ’ T M I S S I T A N D T H I S . A N D T H AT. LO CAT I O N E D EDGE PLEDGE THREE TIMES N OT B A D, B U T N OT Q U I T E “ T H I S I S S PA RTA’ E F F E C T E V E RYO N E K N OW S T H AT U S E T H E I R OW N W E A PO N S N O “ N O” YES, BUT SEEMS BETTER T ROJ A N H O R S E DUUUH LITTLE BY LITTLE 6 WO R D S YO U K N OW T H E A N S W E R THEY SUCK

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GLOSSARY The Universe of Manipulation: from “A” to “Z”

Acclimatization. The area just through the doors of a shop, which helps a customer acclimatize to the shop surroundings and truly enter the shop. Acoustic fortress: The shopfront acts as a barrier from the exterior to the interior against street noise. And then? And then? Effect of expectation. The content of advertising text at first glance does not correspond to its idea. Ignites the curiosity of potential customers and enhances their perception. And this. And that. The company retargets you to allies by promoting their offers and services. Annoying jingle. When it comes to products, annoying music is best remembered and strongly associated with the product Are you talking to me? The effect of direct conversation. The advertisement is seemingly talking with a potential customer; the words are used to persuade and transmit certain information. Art below your feet. Creative vinyl displays affixed to the supermarket floor near the product being promoted will grab your attention. As if you were there. The effect of presence. Potential customer becomes a part of the action associated with the advertised object. Bad at math. You’ll rarely see the sign saying, “was $10, now $7.97.” Why? If the difference is easy to calculate, we tend to think it’s a better and bigger deal. Bait with rebate. Retailers offer potential discounts that have a built-in time delay, meaning the seller has your money for the time you are waiting for your rebate. Best for the end. The areas at the end of each aisle often contain the most profitable items. Bifidobacterium-actiregularis effect. Technical Jargon: retailers use technical words to impress the consumer. Bull’s eye. Triangular balance: your eye will always go to the center of a picture. Here, they put the biggest, tallest products with the highest profit margin. When you look at the triangle on the shelf, your eyes go straight to the middle and the most expensive box. By default. Online donation sign-up is set to recur monthly by default. The company hopes that people won’t notice that they’ve signed up to pay more than once and won’t bother to opt-out once they do. Bystanders. Website shows how many people are also viewing the page/item. Cause and Effect. Retailers claim that if you use this product or service, your problems will disappear. Charm prices. $34,99 or $12,95, we’ve been culturally conditioned to associate 99- or 95-ending prices with discounts and better deals. Colour sells. Orange for optimism, red for excitement, purple for royalty, blue for trust, green for nature, yellow for happiness, pink for love, brown for reliability, black for balance. Cool crowd. The commercial prey on the consumer’s desire to be part of the “cool” crowd. Countdown. Time limits on completing an order; for instance, “the sale ends today at 12:00.” Couponomania. Those who are given a coupon for an item end up spending more than they had planned. Do what David Beckham says effect. This effect is associated with reliance on authority. Words and opinions of a respected person or group of people are used for confirmation and explanations of the product.

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Drama Queen. Commercials that have some kind of dramatic conflict that must be resolved may capture the interest of viewers. Clash or conflict of opinions has always been attractive. Drop the anchor. One item costs almost $400, while the other was about $140. The second looks like a much more affordable deal in comparison.

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Edge pledge. The basic idea of the advertising is perceived better if it is clearly stated in the beginning, or, even more favourably, at the end of the composition. Essential layout. Essential items such as bread and milk are positioned at the back of the store. Eternal advert. TV monitors located at the checkout counter in convenience stores deliver advertising messages in a continuous, content-driven loop of custom programming providing information and entertainment. First in Show. You are more likely to order the first item on the list. Thatâ&#x20AC;&#x2122;s where a savvy restaurant will place its most profitable dish. Fresh as an apple. Commercial associates the product with words or ideas that may or may not be related to the product. The association seeks to transfer certain qualities to the product. Full on. Full-page advertisement is better perceived than a half-page advertisement. Glittering generality. The viewer is given a general feeling about the product, but not much else. Go on. Displays are now regularly put at the end of aisles so that your eyes need never be taken from the merchandise. These are places where retailers will promote certain items as the customer walking down an aisle will approach an end display head on as opposed to at right angles as with the rest of the aisle. Handmade price. Hand-written tags make it look like products are on sale. Holiday ploys. The store uses the scents and sounds of the season (e.g. Christmas). I feel you, sister. Effect of emotional empathy: when listening/reading through the advertising text, the reader perceives the emotions that are expressed in it. Jane says itâ&#x20AC;&#x2122;s awesome effect. Endorsement: comments/names of people who have bought the item can encourage you to buy the same product. Just like them. The advertiser compares its product or service to the competition in a way that is favourable to the advertiser. Just look at you! Mirrors slow people down. Due to humans vain nature mirrors are regularly used on the front of shops in shopping centers and high streets to slow down the traffic and make people spend time in front of the shop. Keep it short. Line of newspaper or magazine ads must be no longer than 20 cm. Keep them buying. Retailers give out credits for spending, further discount for spending, or certain percentage off the next order if over a certain sum is ordered Last 2! Limited online stock. Little by little. Gradual strengthening effect: retailers use a gradual emotional and logical strengthening of the advert. Locationed. What you see on the website might depend on where you live. Brands now have the ability to physically target consumers when they are in close proximity to a store location. Log-n-pay. Once you create an account and add personal information, itâ&#x20AC;&#x2122;s a simple login to begin spending. LOL. Commercial uses humorous message to be memorized.

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Making mountains out of molehills. Big Exaggerations: a small exaggeration in a commercial might be viewed as a lie, but a large exaggeration is more often viewed as a comedic element and an attention grabber. Mess it up. Some stores create intentionally messy displays and pile crap in the aisles to boost sales. The messier and more confusing a store looks, the better the deals it projects. You are forced to dig around to see what’s on sale. My personal objective opinion. The effect of reflections: a type of speech which, based on logic and reasoning, expresses the retailers’ view and at the same time activates the consumers’ attention, piquing their interest in the content. Name them all. The retailers present a list of reasons why the product or service is good. Never-ending shopping. A lot of supermarkets curve the ends of their aisles, this is to ensure your eye never strays from the goods on display. No more for you. Per-customer limit is associated with a scarce good (e.g. two bottles of ketchup per shopper). Not bad, but not quite good. Retailers simultaneously keep the concentration of the consumer on the strengths and weaknesses of the product of a competitor, especially if the latter prevails, which creates a basis to change which goods are purchased in general On your way. Supermarkets tend to stick items into the normal flow of traffic to get you to have to manoeuvre around them. This include those little item stands that stick out of the aisle to get your attention. Open-the-wallet-prices. Discounts on already cheap items (e.g. 50% OFF on chocolate cookies), they are designed to break a psychological barrier and get consumers shopping Paving the path. Visual Prompting: using the lines between laminate flooring, or carpet patterns shops often try to guide you around as they wish. Pick your lifestyle. You may not need new sandals, but place them next to a cute dress, sunglasses, and beach towel, and you may find yourself pining for all four items at once just to achieve the perfect summer moment. Plain folks. The advertiser tries to identify its product with common people just like you. Power display. Right inside the door you will find a container with products, designed to act as a barrier to slow shoppers down. Functioning as a speed bump, this is to make people start shopping earlier. Price and order. Shops will often be laid out in order of price, with the most expensive items being encountered at the beginning of your visit and the cheapest at the end. Put an ellipse on it. Text in the ellipse is perceived more favourably than in a square or circle. Quicky the Bunny effect. Retailers create a character that will become synonymous with the brand and will be remembered by the consumers. Riffle and shuffle. Many shops have a policy of regularly rotating the stock, this happens especially in supermarkets where people regularly shop for the same items. Say it again. Repetition: the name of the product in a commercial is repeated many times. Say what? Confusion: retailers gain the consumers attention by confusing them, and then retains the attention as the consumer tries to figure out the message. Sense of touch. When people touch things they’re more likely to buy them. That means not-perfect displays— where things are a little off-kilter — because people are more comfortable picking things up that way. Sex Appeal. Commercial promises that the product will enhance your sexual attractiveness. Sex sells. Commercial has a sexual undertone. Shake and shock. Shocking viewers gets customers more interested in the product because it causes a shift in their comfort zone.

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Shining bright. Retailers avoid bulbs that change the colour of the merchandise in unappealing ways and dim the lights in the lingerie department to make it feel more discreet. Small size = small price. Consumers perceive sale prices to be a better value when the price is written in a small font rather than a large, bold typeface. In our minds, physical magnitude is related to numerical magnitude. Smell of purchase. Retailers use a strategy of releasing certain nostalgic smells associated with certain products (like burning cinnamon-spiced candles in autumn) while other businesses attempt to associate specific smells with their brand. Sounds good. Certain music can put you in the mood to spend more money, or move fast or slow through a store. Spaghetti sauce and pasta. Complementary products are grouped together on a shelf. Spur of the moment. Flowers and fruit in the beginning of the store: the person can afford to buy something not planned in the beginning of the shopping process.

U W

The customer is always right. Own-brand products give retailers the greatest margins and you see these displayed to the right of the branded equivalent for a reason. Our eyes will be drawn to packaging and colour that we recognize, and then as we naturally read from left to right, we land on the own-branded product and give it that final thought. Europeans read from left to right, so the right side is better remembered. The world of fantasy. Advertisement provides a sort of “fantasy” landscape and/or imagery in order to appeal to viewers’ imagination. They come in threes. Consumers like choices, but too many choices put them off. Three seems to be the magic number. The middle option is usually quite a bit cheaper than the product on the right and only slightly less good, while the product on the left is only slightly cheaper than the one in the middle. They suck. Retailers thoroughly discuss the weaknesses in competitors’ products so that the consumers themselves understand the need to change them. Three times. To advertise a product to the end consumer it is enough to make three arguments. Tiling down. Supermarkets place slightly smaller tiles on the floor in the more expensive aisles of the shop. When a customer entered one of these aisles their trolley would click faster making them think they were travelling faster and thereby subconsciously slow down and spend more time in that aisle. Time wasters. Retailers want you to stay inside as long as possible and reach the furthest points of the store (positioning of the elevators/escalators) by placing the most in-demand items in the back of the store and designing mazes (IKEA). To be or not to be? Rhetorical question: the question in a commercial produces an effect, but no answer is expected. Unreal deal. Absurd effect: retailers compare the unreal with the real product. Where is the rouble? No dollar/euro/rouble sign: prices marked with currency signs have been proven to reduce consumer spending. Where’s the exit? The company’s website requires only a few clicks to sign up for a membership while cancelling involves sending a handwritten note via post. Wicked baskets. Shops will actively hand out baskets and trolleys to customers, as people then feel embarrassed taking a basket with one item to the counter, and it increases the chances of multiple purchases. You’re hot and you’re cold. The temperature of an interior space can be made cooler or warmer to affect your mood and actions.

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“If outdoor advertising had a little more respect for the public, the public would have a lot more respect for advertising” James R. Adams

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B R A N D I V I D U A L : M A N I P U L AT E D F O R L I F E With the digital age has come an onslaught of information. This is true for both the consumer as well as the retailer. While perhaps we have gotten more knowledgeable about the tricks of trade, the opportunities for luring us to buy specific brands have also vastly expanded. In truth, it may well be that on a relative scale we, the consumers, have less information than ever. Some of the biggest players in the world of retail, such as Apple, Nike, and Amazon have moved away from the more primitive traditional ways of luring in consumers, and towards much more sophisticated, intrusive, and subtle methods of manipulation. By data mining, retailers have more accurate profiles of our inner desires than ever. They claim to know what we want and when we want it often before we even realize it ourselves. The result is that instead of offering a product, retailers deliver an interactive and fully integrated consumer experience that holds information about who we are, and is supposed to be fully attuned to our personalities. However, this convenience comes at a cost. For instance, when Nike offers shoes with embedded sensors for measuring performance, they are not simply offering another product; they are offering a user interface which is non-transferable to other brands. Any data collected will stay with Nike, and will only work with Nike products. It is subtle web of entrapment where alternative choices are obscured, but in the words of the retailer it is an innocent process, it is a lifestyle. Instead of a simple single transaction, one purchase, retailers now sell and foster a relationship with the consumer; they

are buying our loyalty, or rather they are making us buy it ourselves.14 On top of that, more and more, companies are partnering with each other in order to control the user experience from start to finish, stretching their activities into multiple domains.15 We are not just consumers anymore, we are assets. This effect also extends beyond ourselves when we share, like, and comment on our purchases on online social networks. Our entire personal community is identified and analysed by the retailer. The next step is using the data collected to suggest to us new services and products, new “experiences” that are supposed to be life-changing. By anticipating our desires, retailers are in a unique position where they can now shape the way not only the market, but how our lives look. They offer us the space to act out certain aspects of our lifestyle, creating a false sense of freedom and seducing us with numerous incentives, while actually we live exactly the way retailers envisioned for us. In fact, compared with the offline world, the online reality of retail has now been transformed into a much more intricate, systematic, and manipulative environment, hazardous both for the consumer’s bank account and personal integrity.16 In the context where retailers are able to manufacture our lifestyles on our behalf, we become blind brandividuals. And with further technological advancements, this trend can be anticipated to prevail. In the end it is certainly true that knowledge is power, except this is only the case when you have more than the rest.

“Our consumer culture is fed by an increasingly sophisticated advertising industry that likes you, friends you, follows you, adds a plus to your life and then turns up the volume on your inadequacies. It feels like we are exchanging real relationships with real people for fake relationships with corporations. Corporations that build real relationships between people who discover a common connection through their product will thrive” Leon Lazarus

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“ B E C O M E S I G N I F I C A N T T O YO U R S E L F. S O O N E R O R L AT E R , YO U S TA R T TA K I N G YO U R S E L F S E R I O U S LY . YO U K N O W W H E N YO U N E E D A B R E A K . YO U K N O W W H E N YO U N E E D A R E S T . YO U K N O W W H AT T O G E T W O R K E D U P A B O U T A N D W H AT T O G E T R I D O F. A N D YO U K N O W W H E N I T ’ S T I M E T O TA K E C A R E O F YO U R S E L F , F O R YO U R S E L F. T O D O S O M E T H I N G T H AT M A K E S YO U S T R O N G E R , FA S T E R , M O R E C O M P L E T E . B E C A U S E YO U K N O W I T ’ S N E V E R T O O L AT E T O H AV E A L I F E . A N D N E V E R T O O L AT E T O C H A N G E O N E . JUST DO IT”

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Traditional Retail The majority of retailers still fall under the old-school brick-and-mortar retail store category. We see traditional â&#x20AC;&#x153;streetsideâ&#x20AC;? businesses that deals with their customers face to face everywhere we go. However, while representing the dominant force, traditional retailers can find it difficult to compete on the market. With the inexorable rise of advanced marketing techniques, there have been gloomy predictions about the future of the bricks-and-mortar. It seems that retailers who stick to the conventional methods will soon be navigating through a minefield.

GOAL Manufacture, distribute, sell

PROFIT Short-term quick profit

APPROACH Industrialization and mass production

REACH Offline; defined social segments

MARKETING Meet expectations

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Retail of the Future Today’s retailers have vastly different and more sophisticated means to manufacture and promote their products and services than five or even three years ago. In the new multichannel reality, incremental adjustments to the format and portfolio of businesses are no longer sufficient to ensure the survival of retailers. A radical rethinking of the means how to attract and retain consumers becomes necessary. The solution will not be the same for every retailer, but those who fail to realize the fundamental transformation required may struggle to survive.

GOAL Provide integrated consumer experience

PROFIT Lifetime (multigenerational) profitability

APPROACH Personalization and interactivity

REACH Online; communities and networks

MARKETING Shape expectations

Source: Based on the presentation by David Erixon “User Immersion and Value Logic”, Strelka Institute E N O U G H

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“This is the postmodern desert inhabited by people who are, in effect, consuming themselves in the form of images and abstractions through which their desires, sense of identity, and memories are replicated and then sold back to them as products” Larry McCaffrey

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T R A S H Y M O S C O W: V I S U A L C A L A M I T Y Close your eyes and imagine the city. Wide streets, tall buildings. Towering architecture, an art form that is truly larger than life. But upon this stunning visual image rests a parasitic life form. In reality, the magnificence of cityscape is marred by the omnipresence of outdoor advertisements. Vast billboards take up the most visually attractive spots, clamouring for our attention. Billboards, banners, signs, digital screens, and spray paint on the pavement meet us everywhere we go. From the perspective of a retailer, it’s hard to deny the advantages of outdoor advertisement. It’s unavoidable, reaches millions, and seeps in right where they want it to, at the subconscious level.9 Without conscious recognition, we start building a relationship with a product simply by being exposed to an advert. For instance, 76% of all Muscovites who routinely take the metro to travel to work,10 and are subjected to nearly 80 adverts of all sorts the moment they step out of the underground system. No wonder that the next time we go to the store, we will want to try some random and rather unnecessary product, and we will think it was our own choice. Perhaps unique to Russian cities is the stark contrast between the historical appearance of the city, and its current state. The idea of advertisement in public space simply had no place in the Soviet era. All decisions regarding the way the urban environment was designed and aestheticized were made centrally at the state level. Regulations structured the smallest details, and allowed no room for large scale private claims of the city landscape. A common

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standard was upheld. However, as the capitalist market took over, the 1990s saw a complete turnaround in the urban landscape. At a highly accelerated pace, marketing started claiming all available space. While in the West the space allotted to this was governmentally limited, in Moscow, marketing could run rampant. In an effort to catch up, retailers in Russia picked a “quantity over quality” approach.11 In comparison to the cities of Western Europe and North America, the choice of advertisements even in the capital city is primitive and old fashioned: where the West is veering towards the sly, the intelligent, and the interactive, Moscow is drowned in distastefully bright, loud, and bold overexposure to the point of complete saturation. Instead of creating a holistic harmonious environment, shopkeepers take it upon themselves to “streetscape” the territory around their stores and adorn them with personalized signboards, while possessing no legal permission to do so, and without following the necessary regulations. Forced to survive in a turbulent and competitive environment, the retailers struggle to visually out-voice each other. This approach undeniably harms the appearance of the city, making it look trashy, and creating visual calamity. It seems that the most important decisions on the subject are made by the least competent people. While experts in urban design do exist, and are at least as talented as those active in European capitals, it appears that they are largely ignored by both retailers and governmental officials in Moscow. Instead, a preference is given to a cheap, direct, and rather

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Categories of advertised goods and services in Moscow (2012) 1. Car services 2. Real estate 3. Points of sale 4. Entertainment 5. Financial services 6. Communication services 7. Furniture 8. Sport equipment 9. Clothes and shoes 10. Media and polygraphy 11. Other goods and services

15,4% 15,3% 14,7% 9,9% 7,4% 5,4% 3,4% 3,1% 3,0% 2,0% 20,4%

10 9 8 7 4

6 5

Social perception of advertising in Moscow (2013) Trust in advertisement in different media

Television 18%

27% Internet

Volume of outdoor advertising in Moscow (2012) bln ₽

23,1 21,2

Outdoor 12%

20,7

30% Print Radio 4%

19,1 17,8

Formats of outdoor advertising in Moscow ( 2 0 1 3 ) Other 1,5%

14,9

2009 2010 2011 2012 2013 2014

Small formats 7,9% Transport 8,4%

60,6% Billboards 6×3

Large formats 21,6%

Sources: RUSS OUTDOOR. “Outdoor advertising in Russia”. AKAR, 11 Nov. 2013. Web. 7 May 2014. <www.russoutdoor.ru/i/ news/2013_11_11_conf/outdoor_ru.pdf> E N O U G H

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ugly approach. And the issue of why any prosperous city in Europe is better off advertisement-wise than Moscow is not that foreigners have better taste, but that the urban environment is managed by professional urbanists, architects, and designers. In Moscow, it is the government who calls the shots. Given the fact that the position of the chief artist has been abolished, it is unclear who is meant to take care of the visual trash on the streets of the city. However, notwithstanding the primitiveness and unattractiveness of the form of stimulation, Muscovites seem to respond to it. So, apart from the mentioned factors, could the retailers persist in overcrowding the city with their grotty billboards because they think we are stupid and will fall for this stuff? We don’t need to look very hard to find the answer to this question, since it hangs on the streets in full view, everywhere we go. Advertisers do treat their consumers like idiots. The support for this fact lies in the mounting pile of evidence that is Moscow’s billboards. All ads contain at least some type of false imagery in the form of colour or word manipulations, deceptive pictures, fake experts, and misleading statistics. When confronted with this, there is

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not a retailer in the world who would try to hide their insincerity; the reply is simple: it is only an advertisement. The intrinsic falsehood of it is just a part of the package. And given the fact that, according to the Russian Public Opinion Research Center (WCIOM)12, 54% of Russians admitted that they tolerate lies in the media, while 72% believe it is acceptable for the media to withhold information all together, the extent to which advertisers are empowered by consumers’ naivety is unsettling. Consumers will respond to the impressions given, even when they are fully aware of how misleading they are. With the large and ever increasing volume of ugly, unsophisticated ads that populate the city of Moscow, the message is clear. Why shell out for clever marketing techniques and tie-in interactive product experiences when a simple, bald-faced farce works just as well. When evaluating Muscovites, retailers judge uniformly and unflinchingly: when you are trying to convince a fool, you don’t need to have the best arguments; you don’t need to make the most sense; you only need to speak louder than your competitors. This is the approach retailers in Moscow take, and this is the way they judge Muscovites.

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Clearly, Moscow not only desperately needs to get rid of its trashy “accessories”, but also to perfect standards for outdoor advertisements. The city government came to this realization in 2013, and decided to shake the advertisement market up by removing nearly half of the outdoor ads that had been littering the city. Overall, more than half a million square meters of advertising has been eliminated, opening up the real face of the city to its inhabitants.13 The cleansing resulted in an acute deficiency of outdoor advertising space, drastically reducing the number of players on the outdoor advertisement market from around one hundred to only seven, instantly boosting up prices, earning the city 75 billion roubles in the process. In general, it seems like the old types and models of advertising that have been disfiguring the appearance of the city for years, such as ads on fences and stretchable signs extended over roads, have been slowly disappearing. This trend is particularly visible in the center of Moscow, which has become more civilized and refined in terms of advertisement. Nonetheless, the city still suffers from a staggering number of advertising panels that have been installed arbitrarily, disregarding historical, architectural, and stylistic features of the buildings and their context. Frequently, advertising signs are too large or hang too high, with a sign stretching over five or six storeys of a historical building being considered as the norm. Another example of the inappropriate application of advertising is the decorative panels of shops, which cover the whole ground floor, including the windows, and create a pseudo façade. Many of such ads have not been issued a necessary permit and can be considered illegal. In this sense, when it comes to the regulation of outdoor advertising, it is imperative for Moscow to polish and enforce the system of regulation and control on existing advertisements. Currently, this responsibility falls upon the Russian Ministry for Antimonopoly Policy and the Support of Entrepreneurship, which clearly is lacking cooperation from the private sector it is supposed to support. In theory, the private sector should actively collaborate with public organizations operating in the field of policy-making and regulation of advertising, and share the aspiration to fine-tune the standards for outdoor advertising. In the case of Moscow, such public-private alliances are forming slowly, but it is possible to envision several issues that could be resolved through their possible collaboration.

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First of all, it is necessary to develop and apply ethical standards for advertising that would reduce the negative visual impact of outdoor ads on citizens, and result in a loyal attitude towards advertising in general. Secondly, a set of universal rules for the advertising market should be developed, incorporating legal advice and design consultations. It is essential that this process integrates both national and international experiences in the manufacturing and placement of advertising structures. For instance, in the historic centers of European and North American cities, advertising signs have to follow restrictive design regulations, which guarantee minimal impact on the urban environment and ensure that the integral perception of architecture is not violated. In such cities as Rome, there are no signs allowed on the façades of the buildings, with all the information about a store therefore displayed inside the shop windows only. Additionally, Western cities tend to have designated commercial places for advertising rented to particular brands for a prolonged period of time. Times Square in New York City is one of the most prominent examples of this technique. This approach implies that a limited number of specific sites in a city are re-designed into “advertising-as-a-destination” rather than distraction and annoyance factor, with the rest of the urban environment remaining visually pristine. This approach signifies the understanding that advertising should fit into and interact with the urban environment, rather than compete with it or distort it. In this sense, the Moscow government could further clean up the city center by designating particular places as “curated zones” where Russian graphic design and award-winning adverts would be showcased, thereby converting outdoor advertising into elements of sightseeing. Lastly, the government should facilitate the organization of various exhibitions, competitions, festivals, conferences, and scientific work related to the sphere of outdoor advertising, aiming to enhance the overall level of competence and expertise in this domain. It is no doubt that interdependent work of governmental authorities and self-regulatory bodies in the field of advertising would be mutually beneficial, facilitating the production of a balanced and comprehensive set of requirements and regulations concerning all aspects of outdoor advertisement.

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Before •

Fascia signs should be designed to harmonize with the shop front, the facade of the building, and any other surrounding details. There should be no advertising at sub-fascia level or on pilasters or columns.

•

Windows should not be covered and the normal functioning of the building should not be negatively affected.

•

The form, design, size, proportions, and siting of a wall mounted poster panel or digital screen should be sympathetic to the building to which it is attached. Interesting features of the building, for example architectural details, should not be obscured or destroyed by the panel.

•

High level signs should only be appropriate where they relate to the scale and primary use of the building. They should be designed to be read as part of the building and should not detract from any architectural feature. On older and more traditionally styled buildings, painted signs or non-illuminated letters should be preferred to panels or other types of display.

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Before

After

•

To reduce visual clutter, a limited number of free standing panels per square meter should be placed only where there is no other type of advertisement present.

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Good quality hard and soft landscaping should form part of the integration of the panel by reducing the negative visual impact of the panel on the urban environment.

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Windows should not be covered and the normal functioning of the building should not be negatively affected.

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Panels should be integrated into a well designed scheme of good quality display which allows for visual breaks between each panel. The neighbouring area should also be considered with as much care as the display itself.

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The number, scale, proportions and design of advertisement panels should respect the site and its surrounding area. It is necessary to ensure that their effect on pedestrians is not overwhelming.

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Dr. Vasily Klucharev

N E U R O M A RKE T I N G: H O P E O R HYP E ? I n t e r v i e w b y Yu l i a n a G u s e v a

You are out shopping. Will you get tea in a yellow tin or a green box? Will it be a detergent scented with lavender or an ocean breeze? Coke or Pepsi? Nike or Adidas? Will you make a purchase or abstain from it all together? We routinely make purchasing decisions, most of which takes place outside of our conscious awareness, or at least without much conscious consideration. In other words, our brain decides for us, and if retailers are to succeed, they need to reach the subconscious level of the brain. This is the place where consumers develop initial interest in products and servic-

es, and inclinations to purchase them, as well as remaining loyal to the brand. It is not surprising then that for decades, retailers have sought to uncover consumer responses through surveys, observations, and focus groups. But it was not until 2002, when the most recent developments in technology and physiological monitoring gave rise to neuromarketing, the ability to directly monitor the activity of consumers’ brains reacting to products and services. Arguably, this breakthrough allowed retailers to perfect marketing and manipulation techniques, impacting consumers’ deci-

sion-making in a much more profound way than ever before. However, some members of the neuroscience community are sceptical when it comes to the miraculous discoveries and apparently successful effects of neuromarketing. The following interview with Dr. Vasily Klucharev, a leading expert in the field of neuroeconomics and the neurobiological underpinnings of social psychology, attempts to establish whether neuromarketing is a retailers’ hope or simply overhyped, and whether we should expect this highly sophisticated manipulation on our daily shop in the near future.

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There is an enormous amount of professional activity around neuroscience: in the past decade, there has been an explosion in the number of related fields, ranging from neuropolitics and neurolaw to neuroethics and neuromarketing. Does it mean weâ&#x20AC;&#x2122;ve entered the era when the physical human brain becomes a primary asset? I donâ&#x20AC;&#x2122;t think that at the moment there is a particular value in the brain itself. But I think we face a revolution in technology and methods linked with neuroscience. It opens up new possibilities to investigate behaviour. In the studies of human behaviour we use functional magnetic resonance imaging (fMRI), transcranial magnetic stimulation (TMS) and so on, and all these techniques are relatively novel. For instance, with fMRI we can scan the brain with magnetic fields and get three dimensional atlases of brain activity. With TMS, you can temporarily switch on and switch off different brain regions, and study their functional role in consumer decision making, for example. So we now have very nice methodologies that investigate brain activity during decision making. In addition, some new fields have been developed, such as neuroeconomics, which combines economics, psychology, neuroscience, and biology to build a new multidisciplinary theory of behaviour and decision making. In neuroscience in general, we can expect fantastic new techniques, which will allow us to modulate and study the activity of the brain and to better understand consumer behaviour. Nevertheless, there seems to be a sentiment in the scientific community that it is too early to treat the data generated by neuroimaging as fully reliable because we still donâ&#x20AC;&#x2122;t know enough about this technique. Critics also claim that the technique still has to prove that brain-pattern responses to marketing correlate with purchasing behaviour. But at the same time, the brain-whispering business seems to be booming. What is the evidence for neuromarketing claims and how sound is it? There is really a growing interesting in this science. Some review articles show a huge increase in the number of neuromarketing companies, and also in the number of companies that mentioned that they use neuromarketing techniques in their operations. I would say that in general, with neuroeconomists, there is scepticism regarding neuromarketing. On the one hand, most of the studies in neuromarketing are not published. There is a reason for this: the companies use this technology for business and other proprietary endeavours, so they are not ready to publish papers in peer reviewed journals. There are very few papers actually published. Naturally, if we do not know and cannot review the results, the scepticism in the scientific community increases. On the other hand, some scientists did conduct studies on consumer behaviour, I also conducted a few studies, and I can say that yes, neuroscience technologies can indeed work in some situations. For example, it was proved that you can predict the purchasing decisions

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“In neuroscience in general, we can expect fantastic new techniques which will allow us to modulate and study the activity of the brain and to understand consumer behaviour better”

of consumers by the brain activity in certain brain regions. There was also a study funded by Chrysler, which showed that preferences for certain categories of products are encoded in the brain; basically, there is a brain region related to valuation and emotional assessment. The activity in this region is modulated by different categories of cars. And it appears that, for example, males prefer sport cars as opposed to limousines or small cars; you can see this trend at the brain level. There is also another famous study, which requested the subjects in a scanner drink some wines. Several wine bottles were tagged as expensive, while some were tagged as cheap. But it was the same wine in every bottle. The subjects didn’t know that. First, if you ask people about their preferences, they will pick the more expensive wine. But then at the brain level, you also see that the valuation centers that are involved in the emotional assessment of stimuli are modulated by the price. We know from neuroeconomics that there are brain regions that predict values during our decision making. Consumers select the options with the highest expected value and the highest expected pleasure. And we see that these brain regions respond to price. So, indeed, brain activity can predict purchase behaviour and trace preferences. The question is — how much better is this very expensive neuroscience technique compared with standard marketing research? This is one of the main doubts of scientists. I think we are not convinced at the moment that this is the best possible version of the method to be superior to the traditional one. But nonetheless there are some optimists out there, I myself am a modest optimist in a sense.

So what could be the drawbacks of companies using a methodology which is wrongfully considered as effective, and its outcomes as reliable? I think they can completely compromise the field. Actually, if you chat with professionals, they would openly state that there are many free-riders in this business, and a lot of deception going on, exactly because this field is so closed. You have no idea what these people are doing. Lots of companies use the neuromarketing label to simply generate additional profit. There are some large multinational companies that invest money in neuromarketing projects, and I am pretty certain that these guys are conducting proper research. But we still don’t know the outcomes.

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Companies like CBS, Disney, and Frito-Lay have already used neuromarketing to test consumer impressions. Should we actually be worried that the technique that probes subconscious brain patterns might be used to influence consumers to buy what they don’t need and choose what they don’t want? Most of the techniques currently used by the companies are still quite basic. They do work, they are well-grounded, and nobody could object to that. There is no doubt that the eye-tracking technique is a useful, powerful method which shows the distribution of consumers’ attention. We can explain a lot by analysing the directions where consumers look, and we will be able to tell how they process the information. The motion of consumers’ eyes contains very valuable insights in the process of decision making. You can use these insights to optimize a website, an advertisement, or design a better layout for a store. When it comes to more advanced techniques, many discoveries we make in the lab cannot be transferred to real life. For example, I once attended a meeting of the Society of Neuroeconomics, and one study, very famous at the time, was presented, which claimed that you can use a spray with the hormone oxytocin to ‘administer’ trust. You just spray this chemical into the noses of consumers, and they will trust you more. Various studies showed that oxytocin modulated the activity of the brain quite quickly because it goes directly to the brain. And the first reaction from one of the participants of the conference was: “Okay, can I spray oxytocin all over my store?” And the presenter responded very quickly, saying: “No, because in order to make an effective concentration of oxytocin in the air you have to make a cloud out of it in your store, and the customers would always notice that they are entering a cloud of chemicals.” So for the moment, retailers cannot really effectively manipulate consumers in a very sophisticated way using neuroscience. There are other much more effective and cheaper ways to do it. In the future, we might get more information and start using it in an evil way, but for now it is just paranoia. I am very doubtful anything like that can happen in the next ten years, and I am really sceptical about the possible harm that neuromarketing can do right now. It simply has limited power to do so. But then again, we are in a kind of deadlock situation, because we cannot guess what is going on behind closed doors and what types of research are being conducted. Then the question is: can retailers use simple neuromarketing techniques and achieve a negative impact on consumers? Of course, you can always harm people if you want. A lot of things are going on in neuroscience, and this knowledge could be extracted and exploited by retailers. For instance, there are very cheap electroencephalography (EEG) sensors that can technically be integrated into pairs of headphones that will track and transmit your brain activity.

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I don’t think this has ever been done. I like the idea of neuromarketing as a tool which brings consumers the best possible product suited to their preferences. Basically, you can use marketing to sell pretty bad products to people, but normally I would consider neuromarketing as an attempt to make the best product for a particular customer. Neuromarketing is like nuclear physics: on the one hand, you get nuclear power and on the other hand, you get nuclear weapons. In that sense, how could the insights collected by neuroscience be used by the neuromarketing industry to bring about positive change for the consumers?

“Neuromarketing is like nuclear physics: on the one hand, you get nuclear power for electrical power stations and on the other hand, you can make a nuclear bomb”

Neuroscience and neuroeconomics show that our decisions are very complex; we have very different values and valuation signals; we evaluate products and situations from very different perspectives. There are, for example, valuation signals related to the experience of the product: consumers can experience pleasure from the consumption of a product. Other brain signals encode expectations. Yet other signals are related to learning through consumption; you can be affected by marketing and you buy something, but then you actually try the product, get disappointed, and learn from the experience. So yes, neuroscience brings in a much more complex perspective on decision making, and, potentially, it can reveal more about the values of consumers. There are so many interesting things related to memories, learning, and values recently developed by neuroscience that could be transferred and incorporated into neuromarketing. And I think neuroscience can also help retailers to successfully pre-select and pre-test products, polish them, and check the effect of such products using neuroimaging techniques. It is well known that most products fail in the development stage. In advertisement there is a famous joke that “we know that half of advertisement works; we simply do not know which half.” Retailers need a model, and neuroscience can provide this model. This way, retailers can improve the product and monitor the improvement by checking consumers’ emotional responses and the reactions of their brains. Another thing is that sometimes people are afraid or not willing to express their reaction, or sometimes they just can’t explain their experience with a product because it could be difficult to verbalize a reaction to a new ice-cream brand, for example. Here, brain scanning can give you something much more objective than a verbal or written response. I think it definitely indicates the power of modern neuroscience which also holds great potential for neuromarketing. ♦

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THE GOOD SIDE OF EVIL

THE GOOD SIDE OF EVIL E N O U G H

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Looking at Moscow retail it may look like Russia had arrived to consumerism party too late, and now is trying to catch-up as fast as possible to keep pace with the rest of the world. The echo of retail’s perception as an evil power influences the way retail operates in the city: the guilty-taste attitude towards shopping, the way the city manages retail distribution. After more than 20 years of free market it’s time to review the results of retail invasion and think of benefits Moscow can get from it.

Kat y Asinskaya

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Imported from the Western world, anti-consumerist discourse and the related ideas surrounding responsible consumption in Russia produce a blurry footprint compared with the originals. The evolution of anti-consumerist rhetoric in the West came naturally from over-saturation and visible effects of overconsumption, producing reactions and discussions in media and society, involving activism and art, and, finally, contributing to the notion that retail bears social responsibility and could be a powerful tool in generating and fueling cultural attitudes. Russia, and Moscow in particular, has a different stance on this discourse. After more than 20 years under the free market, it is necessary to understand the attitudes that retail induces, analyze the status of the retail-city relationship and test whether the perception of “evil” retail has taken root, or a hungry city, which has arrived at the consumerism party too late, is still blindly playing catch up. It’s time to pause for critical evaluation.

Consumerism, the continuous expansion of one’s desires, includes a few forms that generate the most critique such as oniomania, living on credit, and over-consumption, as well as the consequences of these desires, for example, exploitation, uneven distribution of capital, child labour, ecological damage, and the unsustainable growth of mass production and distribution. It is not retail itself that provokes such a strong reaction in those who understand the process; it’s what fuels it and stands behind it in shadow. The question is whether the consumer ignores the dark side of retail and continues to buy, unable to resist the subsequent satisfaction of a purchase. There are wellknown stages of consumer behaviour that show a more advanced stage in the relationship of the consumer with shopping, where the choices he or she makes directly effect the kind of retail they support. The situation in the Russian market is such that after years of limited choice, queues and shortages of basic consumer goods, the advanced shopper craves consumption. The demand is high, the market is still maturing, the shopper is hungry for more and more goods — with no signs of resistance, there is potential to make retail a city-making tool, rather than casting it as an enemy of positive urban environments.

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“The seduction of shopping is not about buying goods. It’s about dreaming of a perfect society and a perfect self” Sharon Zukin

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The absorption of ready-made Western models, combined with post-Soviet hunger, produced a unique mixed model in Moscow. Huge shopping centres within city limits, a small share of distinctive street retail, Russian brands that pretend to be foreign, street level lined with banks and pharmacies — these faces of Moscow retail are consequences of consumers’ demand, business interests and economiccircumstance. So what are they, the distinctive features of Moscow retail that shape our city landscape, what are the prejudices behind them and what is the reality? Russians shop more than Europeans: they spend up to 60% of their personal income on private consumption compared with 27% in Germany and 30% in Great Britain1. In Gorky Park there are more than 30 cafes and restaurants, but only 7 in Hyde Park in London. It seems

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like Muscovites demand an improved quality of life, and their desire to spend money makes retail space an essential part of any urban routine. The city itself has not found a way to capitalize on this demand and offer anything more than a few successful attempts — popup markets and food facilities in renovated parks; the opportunity is in the hands of retailers. The urgent question to ask is whether the city can use retail as an urban tool, performing a sort of “retail acupuncture” to revive territories, moderate human traffic and build sustainable city infrastructure. As the most dynamic and flexible system, retail can be easily built in the places that need it the most. Retail stores are now places of culture, places of interaction, places where real city life happens in all its everyday harmony — it is time to start a dialogue.

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Activists protesting against redevelopmet of Detsky Mir store

Destructive Preservation

Detsky Mir (“Kids’ World”, the largest kids’ store in Russia) was almost completely demolished, but it is being rebuilt as a shopping centre. Voentorg (“Military Goods”) was demolished in 2003, rebuilt and opened again in 2012 as a shopping centre and offices. Hotel Moscow at Manezhnaya Square was also demolished in 2004, and it was rebuilt and reopened in 2013 as a shopping centre and a hotel. It is easy to blame retail developers for destroying cultural heritage. The city is full of advertising, which can sometimes be harmful to architectural aesthetics. But isn’t this a weird way of preservation? When the rules of the game are not defined, everyone defines them on their own. Examples of retailers and developers preserving cultural heritage, obviously in their own way, and acting for the good of community can

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be found as well. Retail possesses an ability to magnetize people, and this ability might be used in various ways. After the collapse of the Soviet Union, many cultural institutions and sites were unable to construct a new economic reality to maintain themselves. For example, one of the first big apparel markets in Moscow was created in 1992 in Luzhniki because of the lack of money to maintain it as a stadium; in 2003, the market was moved outside of the stadium. It used to be one of the most popular markets in Moscow, but it eventually closed in 2011. The same happened to the Dynamo and CSKA stadiums, Tushinsky aerodrome, and the same is happening now with WEC (VDNKh) — the largest exhibition area in Moscow (opened in 1939 as the All-Russia Exhibition Centre). Historic pavilions are packed with retail of all kind, and until recently, they were waiting for redevelop-

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Market at Luzhniki Stadium, 1997

VDNKH, Space pavilion filled with retail, 2007

ment plans to be announced. The concept has changed over time, but it was retail that kept the place alive and maintained VDNKh as a destination. The new plans for VDNKh’s reconstruction involve the eviction of most retail from the area and a return to VDNKh’s original function — multicultural exhibition space. The potential of retail as a preservation tool able to save neighbourhoods and breathe life into abandoned places is still unrecognized. This is true not only for capital development — supermarkets, stores, shopping malls — but for small pop-up initiatives as well. Pop-up food markets, which started as an initiative of creative youth in the centre of Moscow have now moved to the periphery; the last one was in an abandoned hangar in the Sokol district, and was visited by more than 6,000 people in two days2.

Retail does not require any extra help from the city, just space and fewer obstacles to navigate. Therefore, using retail as “city acupuncture” to make people visit certain places might be as efficient as spending money on the provision of urban amenities. Retailers’ first priority is to make people come, so they make retail spaces as aesthetically pleasing and comfortable for potential customers as they can. Retailers do care about people’s comfort; they make their stores accessible for disabled people or for mothers with prams. Their profit depends on customers’ comfort. This unobvious ability of retail to preserve heritage can be used and moderated by the city as a temporary or permanent solution, and a way to experiment with a certain area, or to create vibrancy wherever needed.

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As a shift from industrial to post-industrial city liberated previously industrial zones, a shift from consuming to post-consuming city will unleash new territories that will be available for the reconfiguration into the new forms of sustainable environment.

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Pop-Up Lambada Market at Strelka Institute, 05.24.2014

Atrium Shopping Center, 2014

Individualized Sociality

vatization of city property for the benefit of the society in general and the prosperity of public space in particular? Notably, the notion of privately owned â&#x20AC;&#x153;publicâ&#x20AC;? space has arisen, whereby a plaza, an arcade, a covered street or other outdoor or indoor space is provided for public use by a private organization5. Arguably, shopping malls also fall under this category. Given the lack of public space, shopping malls have been replacing city squares and representing a new form of public space for a long time6: nearly every mall has a main plaza with a pond or a fountain in the centre, surrounded by shop fronts, benches and trees, adorned with flowerbeds and the latest exhibits from the domains of art or fashion. It is quite possible to consider shopping malls as dispersed, unofficial town centres for many who do not have time or do not wish to travel to the actual city centre. Moreover, it is not only the spatial resemblance to public squares that matters, but the fact that visitors of the malls behave in the same manner as they would on a city square. In any Moscow mall, be it GUM or Mega, visitors can enjoy pleasant music while resting at a fountain or sitting in one of their numerous cafes, or they can walk through various exhibitions that take place on a regular basis, ranging from retro

There is nothing social about a shopping mall. The core of shopping, and a shopping mall by extension, is pure individualization and the articulation of selfhood. If the site of alienation for Marx was the factory, today the shopping mall clearly fills that role. In the privatized and highly controlled world of the mall, there is no place for anything but compulsive and unstoppable consumption; one is permitted to choose only where to buy and what to buy, nothing more. Shopping malls are designed to exhaust consumersâ&#x20AC;&#x2122; money, and the only thing they are capable of offering in return is ever more stuff. There is nothing social or human about this place. Or is there? Overpopulated megalopolises, cursed with density, overburdened with construction sites, and yet suffering from social alienation3, are now under tremendous pressure to provide quality urban environments and living conditions for their growing populations. And now that accessible and well-equipped public spaces are particularly scarce while remaining in high demand4, cities have to expand their inventory of public space by discovering new forms of and new sites for social space as public amenity. How can we reconceptualize the adverse effects of pri-

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Pop-Up City Food Market, 2014

Store in Tverskaya Perekhod, 2014

bicycles to beautiful carpets and rare Soviet photographs. It is no wonder then that many perceive shopping malls as an acceptable alternative to any other public space. Furthermore, while in different times, shopping malls were an answer to the industrial revolution, suburbanization, and mass consumerism, nowadays they emblematize a solution to the lack of socialization and ubiquitous urban alienation. Shopping malls represent social hubs, probably the most prominent, numerous, and accessible of such spaces in any city, especially in Moscow due to its harsh climate. They are not just for shopping anymore — malls are also all about social engagement, interaction, and community events. Shopping malls offer their visitors cooking workshops, dance flashmobs, seminars on child rearing, poetry classes, and concert tickets. A mall is not a place for conspicuous consumption anymore; it is a hub, a platform to build a community. For instance, shopping malls have become hotspots for mothers, who have a difficult time getting their child to and from various activities while running errands. Mega has opened a “Kids Club Mega”, where children can learn how to bake, how to invent fairy tales, and take part in magical theatrical acts. In the meantime, mothers have time to go grocery shopping, drop by a beau-

ty salon, and catch up with their girlfriends. Mega also periodically organises community and charitable events, such as “Different children — similar dreams”, related to family-based care and orphans, or “Peace to your home”, dedicated to the commemoration of and assistance for the veterans of World War II. Such events foster cooperation and encourage mutual support in the local community. In general, shopping malls have acquired additional social functions that extend beyond their primary essence as points of sale. Malls have become agents of socialization and are now designed to provide a well-rounded, one-stop shopping, entertainment and social experience. The next step would be for them to adopt yet another function and to act as community centres. They could strengthen their potential role of community builders by organizing and sponsoring community events, such as food sharing days or book-crossing. Shopping malls could also run special workshops for local social groups, for instance for pensioners or stay-at-home mothers. Finally, they could participate in the landscaping of and maintaining the neighbouring natural environment and in the constructing of playgrounds which would serve as local destination points.

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Heartless Culture

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Retail and culture? Putting these two side by side signifies an automatic obliteration of the latter. Unless the question is about the culture of retail, which is the culture of commerce and profit. Retail is all about “churn-and-earn”. Ignited by the forces of globalization, retail has had a profoundly homogenizing impact on many cultures, bringing with it a loss of unique cultural identity and values. What it offers in return is fast fashion and style, converting previously rich local cultures into a melodramatic, superficial, and shallow popular culture of pleasure and mindless consumption. Indeed, the current era of globalization is defined by the unprecedented acceleration, intensification, and dispersion of the global flows of capital, labour, and information7. Undoubtedly, the grand scope and power of retail make it a major global force. Notwithstanding some of the drawbacks that are associated with any trend or notion that is labeled “global”8, retail has a bright side. Specifically thanks to its global properties, retail promotes the fusion of various aspects of diverse societies and has provided millions of people with new opportunities. And this is not (only) in employment possibilities, but in a much more integral part of our lives — culture. A society’s culture is never static; on the contrary, it represents a constant state of flux, effecting and being effected by other expressive forms, such as retail. With the collapse of the Soviet Union, a dramatically new model of a globally curated retail concept has emerged. Notably, retail started to play a significant role in shaping the sphere of Russian culture. The formation of culture and cultural preferences by retail has been involving not only the transmission of a message of what is fashionable this season and where one can get it, or what is the current most demanded and trendy type of gadget. This has also been, and greatly so, about setting cultural standards. By capitalizing on the discourse produced by a massive community of people working in or researching retail — photographers, designers, dietitians, stylists, managers, activists, academics, critics and many others, — retail has acquired the ability to instill in consumers a taste for healthy organic food, animal- and eco-friendly products, sustainable production, transparent communication, public accountability reporting, critical perspectives on the issues of consumption and unregulated growth, and so on. Directly and indirectly, retail educates consumers what such concepts as fair-trade, recycling

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and upcycling, the ecological footprint, sustainable consumption, green design, the slow food movement, and, importantly, consumer rights imply. By engaging, curating, and edifying consumers, retail has been promoting the abovementioned international standards and shaping not only consumer culture but societal culture as well. Thus, if one is able move beyond the mainstream understanding of retail as an aggregation of profit seekers, fast fashion, and unbounded consumption, one would appreciate a profile of much better informed, critical, and well-educated consumer rising in the background. In general, consumers are being encouraged to slow down, explore, and understand the various nuances of the retail industry and, eventually, make a more considered choice. Such an approach to consumption signifies a principle step towards to era of post-consumerism, as it seems propelled by retail itself. When it comes to popular culture, it cannot be adequately described in terms of the buying and selling of commodities — it is much larger than that. It includes all things and activities that people voluntarily take part in, people’s ideas and habits, social trends, and dynamics. Contemporary retail reinforces the image of popular culture as the active and critical process of generating and circulating meanings and pleasures within a social system9. As such, retail may serve as a metaphor for the age: however used and abused the idea of retail as a mere profit-generator has been, it nonetheless provides a sophisticated economic and ideological reflection of the desires, aims, and ambitions of consumers around the world10. With technology reshaping retailing, consumer behaviour and, in turn, culture is also affected. Over the next couple of years, the majority of consumers will be able to experience completely new retail models that will deliver unique shopping experiences. And whether the retail sector is dominated by pure play or multichannel conduct, it will most likely contain at least one digital touch point. Retailing, consumers, cultures — everything will be transferred online and have its own digital version. Retail will be in charge of constructing and curating e-culture, which could have an even more profound impact on the ways consumers accumulate relevant knowledge and conduct their shopping behaviour.

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Sources: Tretyakovskaya Gallery PR Department; The Art Newspaper (Kremlin Museums); Gorky Park PR Department (estimation); Evropeysky Shopping Center official web-site (www.europe-tc.ru)

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A public-private partnership (PPP) is a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies

Source: Center of PPP Development, Russia, via Archpolis.ru

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Devastating Benefits

Every urban pioneer knows that additional shopping facilities require additional infrastructure the city has to provide. These can be roads, parking lots, road junctions, public transportation, utilities, or other types of infrastructure. Build a shopping mall in any city and you’ll immediately need more roads, more electricity; small businesses around it will die out, and people living nearby will be extremely unhappy (somehow). This is how big retail usually criticized, but does it deserve that? There are just a few examples of developers building city infrastructure in Moscow other than shopping facilities. In Russia, a public-private partnership (P3) practice started in 2006 through a legal initiative in St. Petersburg11. To put this in perspective, American cities have been gaining experience in these types of urban development partnerships since the Urban Renewal Program in the 1950s12, in Europe P3s have been widespread since the 1980s13. So even though there is already the Centre for Public-Private Partnership Development in Russia, less than 300 P3 projects have been or are being realized, and they are mainly transport and medical infrastructure. Among those, the are barely any investors from the retail sector, with the notable exception of Myakinino metro station in Moscow, which was built by a developer and opened in 2009. The Crocus Group invested more than 600 million rubles in the project to provide access to its multifunctional complex14. Another example is less inspiring. The IKEA Group in Moscow was forced to build a road junction over the Leningradskoe Highway, which shows that such partnerships can become a tool for blackmailing the developer by the local authorities15. Other examples mostly represent initiatives undertook by retailers or developers, such as the Roomer Furniture Centre, which has relocated its parking lot and set up an inviting square instead, featuring greenery, relaxation spaces, and an ice rink for the winter season. Another example is the Kaleidoscope Shopping Centre, where a large landscaped square was constructed in front of it. So how is it possible that retailers and developers, who are particularly interested in building an attractive, comfortable and distinctive environment, are left out in the cold? It seems like retail businesses and city authorities are making efforts to collaborate, but it is as if they speak different languages. Retail consultants, retailers and the city authorities see retail in very different ways, imbuing it with diverse functions and expectations. Even the most

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basic concepts, such as retail typology, are perceived differently. So are the functions of retail. While city planners are concerned with the basic provision of standardized types of retail, retailers and developers perceive retail as an element of experience, a moment of creation and serendipity that extends beyond obvious acts of routine shopping. Retailers find themselves exerting constant efforts to seduce customers, and they are ready to invest in infrastructure as well. For instance, the developer MD Group is building a mall in Butovo [Butovo Mall] alongside the living quarter, and is willing to invest $500 million in the road construction that will connect Butovo district and Vnukovo Airport16. The problem is that those kinds of projects are not the product of collaboration, but an obligation to invest with no right to control the distribution of funds, or the quality of work. So what are those three “Ps” in P3s: what is private, what is public, and what is partnership? Public-private partnership is a fairly new concept in Russia, and is finding its way of being effective in the local context. The government needs to be fair and open; retail firms want to take part. There is an amazing opportunity to experiment with different forms of sustainably providing retail, to literally build the city environment: coming up with solutions for transportation, landscaping, provision of urban amenities, social facilities, and more.

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Agon_noga street artist, St.Petersburg, 2009

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Overall, retail in Moscow has greatpotential to be a tool to shape its urban fabric. The attitude towards retail in general, the hunger of the Russians for goods and services, and the ability of retail to pull people in gives the government an amazing opportunity to collaborate with retail and retailers to create unique urban vibrancy. The “evil” of retail is shorthand for its apparent uncontrolled division of social needs and business wants. Currently, Moscow is in the position to inject a sense of ultimate value in city retail. Hence, enough division and enough uncontained, unregulated retail. As a vital part of the city, retail can be much more than a place and platform for the exchange of goods and services. The city and its inhabitants — authorities, city planners, urbanists, architects, retailers, developers, citizens, stakeholders, and others — have to unravel these exceptional hidden functions of retail and to employ them to sustain the city. It’s not about placing a shopping mall in the city anymore, but about a deep understanding of the opportunities that can be revealed by this act. It’s not just about extra square meters of retail per capita, but it is about being a community builder, an educational hub, a cultural institution, and, importantly, a place for human interaction. Shopping as a process in and of itself is not particularly important, its effects are. It’s not about seduction, but a pure attraction and the value one can get from it. On a larger scale, retail performs even more important functions that are not easily recognizable. Urban

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professionals need to understand the very essence of retail principles: how it functions, how it attracts customers, how it filters its audience, and how it shapes citizens’ perception of the city. The city authorities need to understand that there is nobody else as interested in making the city as comfortable as retailers are, and they should apply this interest properly. Preservation through retail might be a powerful — but controversia l— tool to sustain cultural/historic heritage. Agile, dynamic, flexible retail can maintain inefficient or abandoned facilities, bringing people and life back to places where needed, adapting itself to constantly changing environments. Moreover, there is a large opportunity for the future redevelopment of areas that are currently occupied by retail, mostly shopping malls. As the shift from industrial to post-industrial city liberated previously industrial zones, the shift from a consuming to a post-consuming city will unleash new territories that will be available for the reconfiguration into the new forms of sustainable environment. By understanding these positive side effects of retail as well as their continuous interplay with the city, and giving retail a place on the urban scene, the city authorities may start an amazing transformation of the quality, quantity, and diversity of retail and retail spaces in all their beauty. Just to get a sense of the paramount importance of retail, imagine the city without it.

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N O R E TA I L ?

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According to a Javelin Group report, there will be 31% fewer high street stores in the UK by 2020 due to the development of e-retail.17 Online stores are more efficient, easier to maintain, accessible 24-hours, and require less investment. For London, New York, or Moscow, it’s the future. But will a city loose something important with the disappearance of brick-and-mortar retail1? Life is drastically shifting towards the Internet. People communicate there, get information, interact, store data, and, of course, people buy there. According to McKinsey, in 2013, 69% of Moscow Internet-users bought something over the Internet at least once.18 All city retail typologies are duplicated on the Internet. The largest Russian online reailer, Ozon.ru, has over 2,000,000 items on offer;19 Auchan, a chain of hypermarkets, has approximately 42,000 items.20 Electronics supermarkets, multi-brand apparel stores, supermarkets, gift shops, art galleries, Internet-kiosks (small e-stores offering a vast range of goods from cooking pots to light bulbs), flea markets, second-hand stores, and even the black market are online. Just think of any specific type of retail and you’ll find its counterpart on the Internet. Retail is infinite; there is no need for a physical store anymore to make a purchase: people buy at the workplace, at home, in the bathroom, in public transport, or during a dinner with friends. Indeed everything is available now anytime, anywhere, and the “www” principle — “whatever, wherever, whenever”, — is truly gaining momentum. Marshall McLuhan’s Global Village allows consumers to make purchases in London or Seoul while physically being in Moscow, steadily erasing all borders. There are no limits, so is there a need in retail to eliminate difficulties in distribution and access, which cause a failure to provide an infinite choice of goods? Retail experts usually stress that no online store is able to give as rich a shopping experience as a physical one. They highlight the importance of store design, merchandising, lighting, smell, and touch — everything that activates the senses. It has been found that consumers pay significantly more for products they can view in person. But do the mechanics of this experience seem outdated? E-stores can give a unique, mixed experience that one can never get in a store. The act of buying a pair of sneakers while being on the top of a skyscraper and

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PRETAIL: A mode of consumption that sees consumers treat crowdfunding platforms as the new shopping malls

watching sunset is an amazing experience. So is getting a limited collection designer dress during a long metro ride. It’s important that there is no designated retail hours now: people are mobile, and retail as a process has been deeply integrated in other daily activities. Is the “importance-of-experience” mantra of many offline retailers just a way to seduce uniformed clients, provoke emotion, and push customers to spontaneous purchases? It seems so, given the fact that technology has changed the way people make decisions on what to buy and where to buy. Today’s shopping journey starts not in a store, but at home, at work, in the car, where people check out goods, prices, and locations to make a buying decision. Even in store, they look for better prices, missing sizes, analogues for a chosen item, or ask friends on social networks if an item is worth buying. Challenging the idea of the impossibility of getting a sensual shopping experience in an e-store, what sort of experience can it provide instead? An experience of new forms of buying things can be provided, for example. For instance, when using virtual wardrobes,21 one doesn’t need to spend time in a fitting room taking the garments on and off. Another example are invisible pop-up stores,22 which offer limited editions or regular collections of goods at a random spot in a city, augmented with a new layer of reality.

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There are also stores in unexpected places such as metro or railway stations.23 Online shops often offer lower prices, day and night accessibility, and delivery to any place needed. Even things that don’t exist yet — pretail — are now available for purchase by pledging to support new projects on Kickstarter and imperceptibly transforming people from consumers to presumers.24 But what about delivery? Delivery is arguably a challenge, as logistics is flawed, and postal services are known to be unreliable in some countries, compared with traditional retail, where delivery is generally unnecessary. But could efficient delivery be just a matter of time? In big American cities, Ebay delivery is available 1–2 hours after the order is placed. Amazon, UPS, and FedEx have announced that they are testing drones for delivery service.25 The drones, called Octocopters, could deliver packages weighing up to 2.3 kg to customers within 30 minutes after they place the order, Amazon chief executive Jeff Bezos claimed.26 In 30 minutes! Sometimes it may take more time to get to a store. So the problem of delivery is not a large issue, it’s just a challenge e-retailers have to face. It seems like traditional retail will have no advantage left over e-retail, or etail. Online trade pushes capital-

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AirWalk Invisible Pop-Up Store, 2010

Amazon Delivery Drone by Amazon, 2014

Media Markt’s Moscow Virtual Store at Vystavochnaya Metro Station, 2013

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“Physical stores become more like media, and media is becoming more like physical stores” Doug Stephens Retail Futurologist

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ism to an even more absolute form — no borders, no limits, no obstacles. Internet-stores require less primary investments, less operational costs, and potentially can embrace a worldwide audience. Etailers provide affordable pricing, uncommon goods, unique experiences, and the full integration of retail experience in daily routine. Furthermore, etailers have engaged much more deeply in learning who their customers are. They collect data and compute customers’ behavior to offer better goods, better services, better prices; etailers are much better equipped for the future. The McKinsey Global Institute stated, “1 billion new consumers in emerging market cities will appear by 2025”. 27 Will traditional retail be able to satisfy their needs? For good measure, will cities be able to provide space for new retail facilities, taking into consideration city density, changing demand, and rising rent rates? Etailers can easily do that. But what will a city look like with no physical retail in it? What will it lose and what will it gain? Retail, especially global retail, tends to be artificial, erasing authenticity of cities, people, and daily life. Retail is positioned right in the sensitive middle of the constant struggle between the preservation of national features and customers’ demand for trendy goods. Retail in a city serves a lot of functions that are not immediately recognized. Lighting during nighttime, the feeling of safety, and a feeling of openness and friendliness are provided by street retail. Any small store on a desolate street can provide a feeling of security: you may go inside; the code of conduct is clear and are safe. Moreover, retail is the biggest driver for socialization and interaction: the culture of small talk, bargaining, and asking for recommendations were constructed by retail. It’s hard to believe that physical retail will abandon city streets one day. On the other hand, GAP closed 189 stores in the US in 2012–2013. Barnes&Noble is going to close 226 stores by 2021.28 It seems that retail will leave city streets faster then we imagine. “We are in the midst of a profound structural shift from physical to digital retail… it’s happening faster than I could have imagined” — Jeff Jordan, a partner at Andreessen Horowitz said in January, 2014.29

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Can physical retail be forced to leave the city or is there a need to invent new connections of retail and city, in order not to end up in an empty post-apocalyptic city? It is not that retail will leave the city streets; it’s just that the role of retail is shifting once again. From the ancient city that was built around market to our contemporary megapolises, retail as an urban function of exchange has always been there. Retail is the essential element of city life, making existence and survival of a city possible. So the future is not in either physical retail or etail alone; the future is a mixture of both. The shift from the industrial to the post-industrial city happened through technology development and automatization, emancipating people from hard work routines, and allowing for time for creativity. The same shift is happening now with retail: in the shift from consumerism to post-consumerism, urban technology will emancipate people from their shopping routines. Shopping as an activity consists of two parts: routine shopping that people enact to sustain themselves (such as buying groceries, hygiene products, and other supplies) and experience shopping that serves as an act of creativity. Etailers will arguably take the routine part, easing the burden of daily retail on city infrastructure, and leaving the latter to brick-and-mortar retailers. Enough of routine shopping: physical stores in a city will provide innumerable experiences, sometimes even without the act of exchange itself. The WIRED Store curated by Wired Magazine acts as a gallery space for the online store, eliminating the act of physical exchange. Or better, not a store, but the story in New York, a space that delivers new experiences every 4–8 weeks by completely changing the interior and collection of goods in accordance with a chosen theme. So the “importance-of-experience” mantra appears to be true. What etail cannot deliver is a sudden experience, a serendipitous moment and the pleasure of a non-sought out purchase. The strength of retail seems to be its weakness as well: rationalization of retail erases unique moments of creativity. A computer can hardly replace human communication, and etail can hardly deliver spontaneous empathy or human emotion, and a city can hardly give up the physicality of retail as a groundbreaking part of urban experience.

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Customized Stores?

Virtual Stores in Metro?

Experience Stores?

Virtual Fashion and Sales Shows?

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Holographic Shop Assistants?

Augmented Reality Stores?

Invisible Pop-Up Stores?

Memory Stores?

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Timotheus Vermeulen and Robin van den Akker

“ I T ’ S N OT T H AT PEOPLE CONSUME L E S S, T H E Y C O N S U M E VE RY D I FFE RE N T LY” Interview by Kat y Asinskaya

Could you say a few words about the concept of metamodernism itself and how it emerged?

Timotheus Vermeulen and Robin van den Akker presented

the concept of metamodernism in 2009 in the webzine format. Tracking and documenting developments in Western aesthetics, culture, politics, economics, literature, and music, the Notes on Metamodernism project collects manifestations of a new reality. In an effort to trace and describe developments in retail and consumption patterns, as well as the mutual influences of brands and art that can be reflected on in terms of metamodernism, I had a talk with Timotheus and Robin.

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Timotheus Vermeulen: It began when we noticed that things we had been experiencing in music, literature, politics and other fields were very different from the postmodern theory that we had been taught in the university. We understood that we need a new vernacular, a new language to describe those changes. For example, in 1992, we saw the end of irony and the beginning of new sincerity in literature. We saw the appearance of new romanticism and other kinds of movements in arts in early 2000s, and they were not postmodern. We saw changes in the economy which were the most clearly encapsulated by the financial crisis and the fall of Lehman Brothers. We saw changes in the global political landscape, which is the rise of BRICS. We also saw an enormous amount of technological changes the Internet, Web 2.0, Twitter and they created a very different fabric among the youth, for example it gave the opportunity to meet up over particular causes or events out on the streets. To give you a certain feeling modernism is like living on one island and having a set of rules that you take to be the truth. The postmodern system can be described as system of islands where

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you keep traveling among them on a ship and don’t really settle on any. You see the different sets of rules each island has. You see that everything can be argued, everything is relative, and there is no such thing as truth. Importantly, you never settle on an island, so you are always able to deconstruct. What happens now is what you do when a ship starts sinking, when you can no longer think about the islands and explore them, but you have to choose one. And whatever island you choose, it’s going to be dangerous. You can see it in art, when artists choose something knowing it’s tricky. Politicians choose a position despite their better judgement. They are forced make a step. They need to make a point and join something, even though it might be the worst decision of their lives. Robin van den Akker: For us it's not so related to art movements or an ideology that describes certain ways of acting or thinking about the world, but a structured feeling or a certain cultural logic. Our fields of study are emotional and artistic productions that help us to analyse culture. Can you give an example of a piece of art, or some work, or a TV show which is completely metamodern? TV: Sure! The performance of Ragnar Kjartansson, an Icelandic artist, who sings this one line ’Sorrow conquers happiness’ and he sings it for a really long time, the same line. And it’s a very sad line, it’s a terrible line! I think it expresses tragedy of everything good, that it will always be overcome by everything shit. Yes, it’s a very tragic line and yet by singing it again and again, changing his tone, or changing a little his instrument he tries to find, despite of better judgement, despite knowing that he cannot change the meaning of the sentence, still he tries to change it. So the sentence is the same, the semantics stays the same, but by repeating it differently each time he tries to find those little gaps and perhaps show some kind of a possibility of an alternative even in that sentence. For me that’s something very metamodern, he tries inspire better judgement, he tries because it’s the only way to go and I think it’s interesting. Are there other manifestations of metamodernism you have noticed? TV: Overall we see five dominant practices. The first one is the return of constructive political consciousness. Back in the 1990s what all artists seemed to do was the deconstruction of the political and cultural landscape. They were showing what is wrong with marriage, what is wrong with consumption society and so on. What we see now is that artists no longer deconstruct by simply saying «that is wrong», but they also try to come up with an alternative or with the possibility of an alternative. The second thing that is very important is the return

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of the grand narrative. The postmodern years are dominated by the end of the grand narrative because all ideologies led us to disasters. Now people are beginning to construct large stories again. Big narratives can explain and also give a sense of direction. The third practice is the sense of post-irony and new sincerity, when people want to be sincere again, and it’s a conscious decision! We all grew up with “South Park” and “The Simpsons”, so “irony is in our blood”, as David Foster Wallace says, but we consciously try to be sincere. There’s also the return of affect or affectivity; postmodernism avoids affect. Today it’s about very personal feelings, personal empathy and caring for others. And, finally, the return of craftsmanship. That is something you can see in fashion a lot as well; the importance of creating something handmade is strong now. There should be a process or a practice behind the stuff that you buy, so a sweeter should be knitted or jeans should be prepared in a very special and particular way. RA: You may notice these five developments in cultural production, philosophy, cultural theory, and they mediate how things are happening as a whole. Can we see those five practices in retail as well? For example, are new forms of retail emerging sharing economy, localism, responsible shopping, slow food and others as a part of new metamodern reality? Are those new forms of retail part of post-consumer society? RA: I cannot say that we are in post-consumerist world because consumption is much prevalent in our everyday life. But it’s also true that we see new forms of consumerism and all the things that you mentioned are part of it. We see the new model of pop-up stores which emerge in all kinds of spaces that are being abandoned by industry, or chains, or shops. Interesting that these pop-ups are not built for some kind of permanence, they are built to seduce consumers for short periods. And they are seductive because they give you a feeling that you have to be there right now, that you cannot wait to buy some goods because it will be too late, the store will be already gone. TV: Recently in London, in Elephant and Castle they had torn down social housing and placed 50 recycled containers for 50 pop-up stores on the site. Nike and other big stores are there, but also small ones working in terms of slow food and upcycling, and when it comes to shoes or clothing, they are all ecological or local. And for me those are very metamodern practices. At the same time you also see how they link up with some of new preferences and predilections in art: craftsmanship and the idea that you want something handmade (and handmade not by a child in China or India, but properly made at the spot or somewhere near) you want the food you know origin of and so on.

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It feels that the sharing economy is about other things—services like Airbnb [an online service where people can rent out their home as a short-term alternative to hostels, hotels, and so on.] — they are not about seduction, but are about communication and experiences that you cannot have in a store.

“Pop-up stores and collaborative consumption are the key developments mirroring new form of consumer capitalism today”

RA: For me it’s one of the most exciting and metamodern forms of consumption. We see how ordinary citizens organize themselves around certain interests and needs, and also play with sensibility, sustainability, a new form of sobriety, new forms of living together or consuming together. Indeed if you want some sharp distinction, postmodern consumerism is very much driven by individual taste, by abundance, by buying on credit, and here you see that it is about communal consumption, and new forms of restraining yourself. I think that those two phenomena that we had described—pop-up stores and collaborative consumption—are the key developments mirroring the new form of consumer capitalism today. TV: And what I think is really important here is that people do not consume less, they consume very differently. RA: Somehow we suppose that global chains are really different from small shops. In fact they are not. Look at the pop-up stores so many of them are actually made by very big brands. Small, web-based enterprises who stimulate the sharing economy are invested in by some of global chains or global companies. TV: It’s also interesting to see how it’s being reflected in advertising, right? I think it was Žižek who wrote that the dominant model of advertising at the postmodern moment in 80s and 90s was related to sentiments, authenticity, and individual choice. Now we see that big brands are moving to an advertising model that communicates responsible consumption, sustainability, community. Of course, it might be just a trick to seduce people, but I think it really stands for those changes. This is another area where we can see how consumption changes. But if we take a look at the bigger picture, retail as the business of selling goods still has strong negative image, sometimes even an evil one. The retail industry affects us a lot, but most of the time we are happy consumers and don’t really feel bad about it. In your opinion what is provoking this ambiguous feeling towards retail? RA: Well, I think this negative image of retail and consumption has a lot to do with postmodern years when overconsumption led to an enormous amount of debt. Consumption and exchange itselves are not something bad, it is just a fact of life, you have to be there, you have to go to a marketplace to sell or to buy something. The problem is that now it is so much structured towards accumulation of capital without

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taking into account social needs, environmental concerns and other issues. So if those two things could be included into consumption exchange, there is no way to say that consumption itself is a bad thing. TV: I think that accumulation is the reason why people might hate retail. It’s not about consumption, but it’s behind the things that consumption stands for. I can see from what you’ve been saying before it may stand for something else than conspicuous accumulation, but it would require a complete overhaul of the whole financial system. And I don’t know how fast it could happen. It’s interesting to take a look at what companies are trying to do. For example if you go to TopShop in London a quarter of the store in no longer new clothing but recycled clothing. In that sense they satisfy consumers who don’t want to buy something new, but instead something old. So companies got what they want and consumers are also satisfied. I think it’s very clever of them and I think that Urban Outfitters are doing something similar as well. Etsy and the success of it proves that people still consume, they just consume different types of products. Our seduction by retail pushes us to some alternative models of consumption — we now take the process of buying as an act of responsibility as well in an attempt to make a difference. I wonder if it really makes any difference though… TV: We know that we cannot change the entire world, but you might be able to change it a little bit, just a tiny thing and the process of wanting to that is important. We don’t know how the alternative will look or if is there any, but we imagine how it may look. Things changes, there are alternatives, but I think people in the 80s and the 90s did not allow themselves to think about alternatives. And now suddenly we are slipping back into the sphere where an alternative is possible. It may be the worst things to happen, but this is important — to think about possibilities. ♦

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Olena Kovalyova

Catalogue of a non-existent exhibition

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iculating Retail

The catalogue of nonexistent exhibition ARTiculating Retail encapsulates some of the issues, observations, and paradoxes involved in the examination of the relations between art and urban retail for the last 10 years (from 2004 to 2014) in the West and in Russia. Retail is researched through the multiple and diverse lenses of the artists’ works. Before the collection was complete, it was hard to imagine the range of tone it would produce. At the moment, the catalogue resembles a diagnosis of the relationship between art and retail, produced by art. At times, it is fairly critical, at others stimulating, and in a few instances, mind-altering and inspiring. The collection presented certainly expands the understanding about ourselves as consumers.

W H AT D O E S T H E I R C O N S U M P T I O N M E A N ?

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Retail As Artifact

ical retail space, but uses a typical space Art and commerce have a long and complex history, where art for art — the museum, and places within it a real salesperson. So the object of as an object and a symbol have been an important signifier of art becomes not the items, which are economic and cultural capital (Berger, 1972; Bourdieu, 1984; displayed on the shelf (Oldenburg), the Szmigin, 2006, p. 112). Since the beginning of the nineties, object emerges as the process of selling Western culture has witnessed the blurring of boundaries beand buying in form of a performance. tween art and consumption (Featherstone, 1991). In 2002, the Tate Liverpool held the first large scale show on consumption, Most importantly, the bag purchased in the museum installation of Murakami, Shopping: A Century of Art and Consumer Culture, which in fact had no difference from a Louis explored the links between the distribution, display, and consumption of commodities and their connection to modern Vuitton bag bought in their boutique. The museum bag itself did not hold and contemporary art. a sacral value so much as the process of The merging of art objects with popular culture in the buying itself. middle of the 20th century was not simply an act of democraIt goes without saying that Oldtization for many pop artists, but more importantly signified a unification of art with life experiences (McQuilten, 2011). In enburg’s manifestation was a powerful statement of its times, as well 1961, Claes Oldenburg in his project, The Store, rented a shop as Murakami’s is of nowadays. And and filled it with sculptural objects that replicated consumer today, comparing these two works, it is merchandise. Moreover, the fusion of art and culture held the obvious that a shift has been occurring promise of a surrealistic union of subject and object, a utopiin the relations between Western art an harmony of art and life (McQuilten, 2011, p. 25). In 2008, Japanese artist Takashi Murakami took the next step in this story — he placed a functioning Louis Vuitton shop in a museum and exhibited “ B O U N DA R I E S B E T W E E N it as an artifact. With this gesture, the artist ART AND CONSUMPTION shifted the focus from the product to retail ARE IN A PROCESS itself: the process and the act of purchasing and selling. Oldenburg, for example, rented space OF DISAPPEARING” directly from the store, perhaps for a more surrealistic effect, and left the real business of the Mike Featherstone store within of the frame of his work. In conThe author of Consumer Culture trast, Takashi Murakami, does not choose a typand Post Modernism, 1991

285 ☞ Our utmost gratitude is expressed to the artist Alevtina Kakhidze who has kindly contributed a number of her art works from The Most Commercial Project to this research. A holistic comprehension of her concept and her artistic method is revealed in the catalogue (p. 299) and in the interview (p. 308).

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throughout the customer activity cycle, rather than just marketing products and services. At last, from 2000s onward — the most value for customer and themost advantage to the enterprise progressed into purpose inspired customer experiences that lead to better quality of life and living (Vandermerwe, 1993, 2000, 2001, 2004). Notably, Takashi Murakami’s work, created in the late 2000s is distinguished by its shift of focus to the shopping experience, and Oldenburg’s work, produced in the 60s, showed the artist as a retailer, and focused on the product itself. Perhaps, the two above mentioned examples simply fit into the hypothesis and someone might mention that it could be a collection of unrelated instances and one could not apply it to the wider themes in art. It would be important to note here that the installation of products as artifacts — “ready-made object” — also was a series of isolated cases, and now has become an accepted form of mass communication between artists. To argue, the precedent itself could become the point of departure.

and commerce. It seems that artists are now moving towards a much more sophisticated and comprehensive approach, which involves real actors on the side of retailer and consumer, and not mentioning museum and genuine commodities. From that, it is possible to derive a remarkable observation. The evolution of artistic strategies unconsciously follows the evolution of retail marketing strategies. The marketing strategies of retail are developing with the mind-blowing speed. Retailers are in fact more capable to tune the ways they communicate with the audience, to evolve in their relationship and maintain interest, of course, for their own profit. If we take the theory of evolution of marketing strategies, we will see that they are characterized by three temporary stages in their relationship to the client. Sandra Vandermerwe calls them the eras of transformation of customer focus. In the first era, which lasted through 60s, 70s, and mid 80s, the retailer focused on the product and the improvement of the product itself. In the second era, the mid 80s to 90s — the focus shifted to delivering fully integrated experiences

Gesamtkunstwerk

To look at retail as an active subject, it is important to analyze how this subject interacts not only with artistic works, but also with the museum space itself and the base and the foundation of artistic institution. Here the focus could be narrowed down to the role retail plays inside a museum. Nowadays, the line between shops and museums is irretrievably blurred. Department stores may not have become museums, as Warhol predicted, but museums have become department stores. For half a century Western museum-retail evolved from a gift shop to a shopping mall (see 1–5). Currently the most visited museum in the world, the Louvre, has a separate retail department, a 11,000 square metre shopping mall. The shopping area is integrated throughout with exhibition halls, and one of few entrances to the museum (see 1). It is hard to believe now those first gift shops were attached to information desks and were operated by a limited number of volunteers (Theobald, 2000). “[Museum stores have] become far more professional in the way they’re run, with more paid staff, fewer volunteers and better-quality products more in tune with the museum’s mission and exhibits,” says Andrew Andoniadis, a museum-store consultant based in Portland, Oregon.

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F R O M T H AT , I T I S P O S S I B L E TO DERIVE A REMARKABLE O B S E R VAT I O N . T H E EVOLUTION OF ARTISTIC S T R A T E G I E S U N C O N S C I O U S LY F OLLOWS THE EVOLUTION OF R E TA I L M A R K E T I N G S T R AT E G I E S . I T S E E M S T H AT T H E A R T I S T S A R E N O W M O V I N G T O WA R D S A M U C H M O R E S O P H I S T I C AT E D AND COMPREHENSIVE A P P R OAC H .

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seums have learned to take advantage of it. For example, in the Vatican museums, customers have referred to the very low quality of merchandise combined with the vast number of souvenir shops. The signs indicating “religious tips” about the products point to their divine attributes. The customer will most likely go for the divine cross, followed by a cheap souvenir. It is apparent that museums need no other justification to convince the purchaser; the sacredness of the temple of the arts is enough. The museums with developed retail infrastructure claim that their shops have become destinations. And in the vocabulary of any retailer, any shopping mall strives to become an attractive “destination”. Remarkably, compared to a shopping mall, a museum has all the advantages to win the competition. A good shopping mall is not a collection of goods, stores, brands, and services — today a good shopping mall is a concept which should attract a shopper, among all the other retail options. These concepts, which are carefully and arduously envisioned by developers, have a tendency to become outdated, or not fully functional, leading to the re-development and a new concept strategy in only 5–6 years. (Magazin Magazinov Conference at Strelka, 2014) In the meantime, the museum by its nature remains a destination, and the older it becomes, the more importance it gains. So in theory and in practice, in the example of Louvre (see 1.), it is much easier to fill the museum with retail and make it a destination, than the other way around. These facts testify the changes in DNA of a museum. “The Museum of Modern Art, the Chicago Art Institute or indeed the Tate Modern owe little to Levy and Kotler’s description of museums as “cold marble mausoleums” unattractive to visitors. The blurring of boundaries between art and consumption has questioned the privileged position of art suggested by Julius. But increasingly we see a world where everyday banal reality comes under the sign of art (Baudrillard, 1998), while art happily engages with the commercial world”, writes Isabelle Szmigin. W H AT O N E A R T H M A K E S To understand current tendencies better, it is MUSEUM SHOPPING valuable to remember the processes of desecularDIFFERENT FROM ization in particular spheres of life, which took place in the middle of the century. For example, T R A D I T I O NA L O N E AT in the 15-16th centuries, the gothic cathedral A SHOPPING MALL? housed within it a gallery of modern art, retail, B A S I C A L LY, M U S E U M the transmission of news, and socialization, around which formed a community, as a sort S H O P P I N G S E PA R AT E S T H E of “gesamtkunstwerk”. It was all in one place: C O N S U M E R F R O M G U I LT , the sacred, news, and entertainment. And the L E AV I N G J U S T P L E A S U R E recent global trend in the relationship between

Franci Sagar, a founder of the 1980s cult shop Zona in SoHo, New York, is currently an adviser for a number of art museum stores. She claims: “Gone are the days when the shelves of museum stores were limited to exhibition catalogs, magnets, and souvenir coffee mugs. With museums nationwide increasingly bent on establishing their individual brands, their stores have become more sophisticated”. It is obvious that museum retail has learned to evolve as did retail in general. In the nascent stages of developing trade inside museums, the shelves displayed only a few small souvenirs of a museum visit. Now the museum store offers a sophisticated line of wine, fashionable clothes, jewelry, furniture, and tableware inspired by the museum’s collection. What on earth domakes museum shopping different from traditional one at a shopping mall? “Educational appeal that also gives you a feel-good glow” claims the Guggenheim Museum, “feel all the more cultured” adds the Museum of Fine Arts in Boston, “you buy a piece that has a story” reveals the Gardiner Museum in Toronto. Basically, museum shopping eliminates guilt from the consumer, leaving just pleasure. The space of a museum contributes to the impression that items displayed in the museum are sacred. Many mu-

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the shopping centrecentre and the “THERE SHOULD BE museum could be viewed as a desire A R E L AT I O N S H I P B E T W E E N to go back to that model, the unified FA S H I O N A N D A R T B E C A U S E core. For centuries its constituent segments drifted apart and now have A RT S H O U L D N ’ T TA K E I T S E L F inert gravitation towards the unity T O O S E R I O U S LY A N D F A S H I O N and the synthesis of arts — gesamtEITHER. IT’S ABOUT A KIND kunstwerk (translated as total work of art all-embracing art form or total OF LIKENESS BETWEEN THE artwork). You come not to a store, but T W O , L I K E I N T H E D AY S to a divine gift shop, which will sell O F A N D Y WA R H O L — H E WA S you a piece of something sacred. And what is sacred is the notion which T H E O N LY O N E W H O S AW T H AT will help you better understand the FA S H I O N A N D A R T C O U L D G O world and your place in it. Even if W E L L T O G E T H E R . A F T E R T H AT you are not a collector, and you don’t have a large sum of money, you can THEY BECAME TOO SERIOUS” still buy an object that represents the line between something sacred and Karl Lagerfeld something routine, something that Head designer and creative director could possibly bring you to better of the fashion house Chanel understanding of yourself. And here is the question: is this forward the idea to imply even more collaboration and synthesis temporary and fashionable, or than before an expansion of production could it possibly remain in culture? Could it be another way and consumption in relation to styleto present art to people or could it be part of a bigger trend of and image-rich products (see 20.1). returning to one unified centre? Of course, it’s not new — long before this, retailers themselves invited celebrity designers to imbue their products Ethics and Aesthetics with a new form of authentic quality. of Consumption For the last decade, fashion, as a practice of style in behaviour, But the crucial difference is that focus transitioned from the product and together with art sets the new depth in the aestheticization service itself (era 1, 60s) to the quality of consumption (see 12–24). The aestheticization of everyday of life and living of the consumer (era life is implied in the choices we make in terms of goods, ser3, 2000s) (Vandermerwe, 2012). Sandra vices, and experiences. The definition of the aestheticization Vandermerwe explains that “in era 3, of consumption as used in this essay is informed by Featherenterprises don’t just try to differentiate stone (1991): that aesthetic enjoyment can be captured from themselves, they make genuine efforts consumption and consumption objects. to make a difference to quality of lives”. On March 4th 2014, Karl Lagerfeld transformed Paris’s Transposing brand on prosaic everyday Grand Palais into a massive supermarket, setting the scene products like sponges, brooms or eggs, for Chanel’s Fall/Winter 2014 show (see 20). It can be comKarl Lagerfeld marks them with the pared with Oldenburg’s Store in terms of sketching reality, quality of brand life and living. though at the show there was also one thing that exemplified how relations between art, life and consumption may develop Slavoj Žižek once said that “before, further. Models paraded down the runway amid a stage filled there was a confrontation between what with dozens of products and canned goods all adorned with you sell, and what you do for society. the brand’s logo. Directly or indirectly, this precedent pushes Whereas in today’s capitalism we notice

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“ B E F O R E , T H E R E WA S A C O N F R O N TAT I O N B E T W E E N W H AT YO U S E L L , A N D W H AT YO U D O F O R S O C I E T Y . W H E R E A S I N T O D AY ’ S C A P I TA L I S M W E NOTICE A UNION OF TWO OF T H E S E AC T I O N S I N T O A S I N G L E G E S T U R E . W H E N YO U B U Y S O M E T H I N G , YO U R A N T I CONSUMERISM DUTY TO DO SOMETHING FOR SOCIETY IS ALREADY INCLUDED IN THE PRICE”

Bar opened for two days in November 2013 in the desert north of Doha, as a “bar installation”, created in collaboration with Miuccia Prada and the chairperson of Qatar Museums Authority. The project is similar in spirit to Prada Marfa (see 21), a false storefront set beside a Texas highway by the artists Elmgreen & Dragset. Yet, while Hirst’s pharmacy won’t be taking any repeat prescriptions, the neighbouring tent, Prada Oasis, has drawn commercial interest, since it displayed 20 Hirst-accessorised Entomology Prada bags, decorated with jewel-encrusted beetles, which were auctioned to benefit an educational charity. This is a perfect example of not only continuous aestheticization Slavoy Zizek of consumption, but also of the ethia Slovenian Marxist philosopher, cization of consumption. psychoanalyst and cultural critic As this paper has demonstrated, we are witnessing the mutation of the relationships between art and commerce, which is ina union of two of these actions into creasingly about getting more real and involving real players: a single gesture. When you buy something, your anti-consumerism duty to do retailer, customer, art institution. This is the reaction to early artists’ motives of unification of art with lived experience. It something for society is already includcalls for an even more degree of aestheticization of everyday ed in the price”. And this is what art has consumption and furthermore its ethicization, that leaves no also reflected recently. The Prada Oasis place for guilt — just pleasure. and Damien Hirst’s Pharmacy Juice

CONSUMPTION À LA RUSSE In 2008, Russian artist Dmitry Gutov stated in an interview that nowadays every Barbie is able to criticize consumption. This comment referred to the anti-consumerist exhibition, organized and curated by the IT persona Ksenia Sobchak. Despite the fact that Sobchak’s shoe collection, displayed as an artifact at the exhibition, was not arranged in a particularly appropriate manner from an artistic point of view, Dmitry Gutov noted that “it was absolutely frank and correct criticism of the consumer society — for it does have so many shoes indeed.” From this one could potentially deduce that since Ksenia Sobchak has addressed the topic of consumption, this theme

is ever more prominent in the works of Russian artists. However, research has shown that there is hardly any art produced in Russia that is related to the topic of consumption. By contrast, Europe offers a multitude of various examples. For instance, in the course of our discussion with Artvandal, a Russian street artist and co-author of a blog about street art world, it became clear that the global street art practice

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contains a variety of street works which address topics of consumer society, anti-consumerism, commodity fetishism, or manipulation of choice. But when it comes to Russia, it was rather difficult to come across such examples in the sphere of Russian art, although a few existing cases are quite interesting. It is possible to claim, without a doubt, that Russian street artists react more readily to the ubiquitous and annoying phenomenon of urban advertising. They tag it, cover it up with paint, or just cut certain fragments out. The question is: what is it about Russian reality that prevents artists from considering consumption-related issues more frequently, while Sobchak’s first attempt at declaring herself an artist involved her choosing the theme of consumption and presenting her work in the spirit of European criticism of consumerism? One of the reasons was suggested by Dmitry Gutov. In the aforementioned interview with curator Ekaterina Degot, it was discussed how representatives of the art industry can deal with Ksenia Sobchak if she has now become an artist herself. Dmitry Gutov commented on a paradoxical phenomenon: contemporary art has become the flesh and blood of glamorous culture, even including its critical stance. Gutov has rightly noted that “we will soon see glamorous culture reaching its trendy self-denial: the most expensive magazines will be printed on toilet paper in black and white style…”

“ANY ‘BARBIE’ ALREADY KNOWS HOW TO CRITICIZE CONSUMPTION” Dmitriy Gutov Russian artist and art theorist, 2004

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work by Alevtina Kakhidze

class inherit similar social stereotypes and demonstrate that criticism of consumption and the satiety of the society with consumption are yet nonexistent. In this sense, the artists are being honest, since such topics are generally not part of societal discourse. Moreover, in Western culture, consumer society emerged in the early twentieth century with the rise of industrialization. Russian society still has not passed this stage, and is not over the euphoria that comes with consumption just yet. Thus, at this point, only a part of the Russian population has moved beyond the realization of themselves as constituents of the society of consumption, and towards the being fully aware of themselves as individuals. Most likely, this journey has been completed by the members of the “elite”, who have been enjoying access to the full-fledged culture of consumption propelled by the West. In the Russia of 2008, it was unlikely to encounter a person who has gained enough experience to criticize consumer society. It is possible to speak about a Moscow which relives certain phenomena which have been lived through before, often as farce. And in this, it is possible to see some kind of mission of Moscow as a certain polygon. In Moscow, just as in the whole country, which does not represent the system of the so-called Western democracy, the role of the artist is different. A Moscow-based, or Russian, or post-Soviet artist has a limited range of functions in society as compared to their Western counterparts. In Russia, many artists are turning towards political and radically social topics. They are also often the most relevant ones. In this case, the role of the artists is to embed the ideas into the public consciousness and legitimize them. In fact, it appears to be similar to the role of artists during the revolution, when there was a surge of avant-garde art, which legitimized the proletariat as the winner, and gave them a new visual language — propaganda. But just like the art itself, this language remained avant-garde. And what if Russian art isn’t the first-born in a culture of consumption? Perhaps, what happened with the avant-garde of the 20th century, when Malevich, Kandinsky and other pioneers of avant-garde lived through everything that Western art experienced for 40-50 years in a ten year period from 1900 to 1910, will now happen with consumerism. Since the precedent has already occurred, and the Soviet avant-garde now occupies a worthy place in the Western culture archives, maybe the rising wave of love towards the West will generate a new Soviet avant-garde?

Another reason could be related to the scale of the whole country and the historical chronology of events. It’s no secret that citizens of the Soviet Union had nearly nothing to consume. In 1991, when the Socialist state collapsed, the economy was in a very poor condition, and public access to goods was literally non-existent. In fact, certain Western-driven patterns and scales of consumption in Russian society only started to take shape in the beginning of the 2000s. Therefore, at the moment Russia, like many other post-Soviet countries, is living through the first decade of so-called consumer society. Consequently, the domain of art rarely meditates upon these topics, since artists tend to consider certain issues only after they expand to a large scale, penetrating society as a whole, signifying that the consumer society still hasn’t yet become a widely-spread social phenomenon. Despite ten years passing since the more complete formation of consumerism, the Russian population still has not experienced what the notion of “excess” truly means. There is also the joy of consumption to consider. Accordingly, artists who often belong to the middle

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CRITICISM OF CONSUMPTION A N D T H E S AT I E T Y OF THE SOCIETY WITH CONSUMPTION ARE YET NONEXISTENT. IN THIS SENSE, THE ARTISTS ARE BEING HONEST, SINCE SUCH TOPICS ARE G E N E R A L LY N O T PA R T O F S O C I E TA L D I S C O U R S E

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The Age of Business The story of the non-existant exhibition begins with understanding how we were integrated into the culture of consumption, which has had a tremendous effect elsewhere, and arrives in Russia to impose into its culture in a tried and tested formats. The works of Boris Mikhailov from the series Tea Coffee Cappuccino captured the first decade of the 2000s: trash on the streets, spontaneous trade, the rise of business and advertising. The images in Tea Coffee Cappuccino, most of them taken over the past 10 years in Kharkov, represent life in Ukraine, but similar scenes can be found in Moscow, Vladivostok, Perm, and other cities in parts of the former Soviet Union. Mikhailov researches the changes occurring in the post-Soviet era. As he states in the afterword, “A new age has come — the age of business…”. Everything can be bought and sold. The consumerist invasion of Western capitalism is everywhere fully apparent in huge, colorful advertising banners and billboards. Photographer Boris Mikhailov shows that society’s most significant paradigm shifts are often most clearly perceived in the smallest of everyday transactions. For example, in a café or restaurant in the times of Soviet era, a waiter would have offered you “tea or coffee?” Today, two decades after the fall of the Soviet bloc and the ascent of western capitalism, it’s “tea, coffee or cappuccino?” Subsequent to the opening of the borders, not only consumption flooded the country, but also a problem of self-identity appeared, which people living in the Soviet Union have never even thought of. That has influenced the topics artists chose to contemplate upon — what we all had in common, and what made us different. Many criticize Mikhailov for such a depiction of our differences, arguing that it is wrong to show that everything is just so and no other way; reality is larger than that. However, on the other hand, artists themselves claim that there has been a great demand for post-Soviet ugliness in the West. Mikhailov writes in contrast, that “only when one sees misery in a picture, does one begin to notice it in the street”.

“ A N E W AG E H A S COME — THE AGE OF BUSINESS. IN A CAFÉ O R R E S TA U R A N T I N THE TIMES  OF SOVIET E R A , A WA I T E R W O U L D H AV E O F F E R E D YO U ‘TEA OR COFFEE?’. T O D AY, T W O D E C A D E S A F T E R T H E FA L L O F THE SOVIET BLOC AND THE ASCENT OF W E S T E R N C A P I TA L I S M ,  IT’S ‘ TEA , COFFEE, OR CAPPUCCINO?’” Boris Mikhailov Born in , Kharkov, former USSR. Lives and works in Berlin and Kharkov

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Boris Mikhailov Tea Coffee Cappuccino Photo printing 2000â&#x20AC;&#x201C;2010

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Necessity Is the Mother of Invention

This is a continuation of the story about a new age and new opportunities, when everything is now possible to buy. The products of mass production give one an opportunity not only to choose, but also to not reinvent the wheel. And that can be considered a harmful trend because it is, in fact, vital to reinvent the wheel. For wheels to improve, it is necessary to always question their design. And not only designers should do so. Actually, the inventiveness of the Soviet people could currently be treated as an anti-consumerist ideal by the West — the consumer is reinventing something out of old things instead of endlessly purchasing new ones. Certainly, it was an inherent and necessary aspect of the daily life of Soviet citizens, and many were very saddened that they were forced to do that. Therefore, the beauty of this phenomenon became apparent only now, when it has become nearly extinct. An artist who exhibits historical “ready-mades” indicates that he is nostalgic for this involuntary anti-consumerism. All of these artifacts are real. Most of them were collected in the last two decades. The artist believes that he performs the role of a social mediator. His goal is to once more convert ordinary people into creators, to expand the field of consumers and producers of contemporary art. However, none of the Russian authors have visited the vernissage yet.

The Age of Business

“I LOVE TO QUOTE B R O D S K Y : ‘ W H AT O N E NEEDS, DOES NOT NEED A N O T H E R .’ I D O N O T TA K E T H I N G S T O T H E COLLECTION, ABOUT WHICH THE AUTHORS S AY T H AT T H I S   I S INVENTION. ONCE HE INVENTOR — LET HIM G O T O T H E PAT E N T OFFICE” Vladimir Arkhipov Russian artist

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Vladimir Arkhipiv Hand-Made Russia Installation 2012

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Old Recipes of Hope for a New Era

"The Slogan" by Sergei Bratkov (it says “Long live the bad today for tomorrow will be fine”) reveals a habit of ideologically perceiving the present through the illusion of an expected prosperous future and, in turn, the present in accordance with this common devaluation. The method of the transmission of the ideology of a new age is the beaming advertising signboard. Therefore, the artist displays the slogan in the format of a neon sign. The slogan immediately attracts attention and, at first glance, instills the suspicion that it is an advertisement. This primary effect is so captivating that it is not quite possible to notice an image depicting a violent fight and its bystanders on the background of the slogan. This work reflects upon the paradigm that the Russian people are living the dream. And their dream is much greater than the dreams of others. It is neither comparable to the American dream, nor to the gloss of consumer society. The beauty of the dream of a Russian citizen is that it is something unattainable for another person, thus separating the Russian from the rest. And when the Russian is being shown by the others that reality is not as grand as it is imagined, it can greatly offend the latter and plunge them into becoming the “Russian bear.” But when the artist, among those of his own kind, masterfully demonstrates the true state of the soul which is being crystallized in the present, he triggers self-irony in a culturally-acceptable way. All what the artist says, equally applies to our past and our future.

“THE RUSSIAN CONSCIOUSNESS IS NOT HISTORICAL BUT MYTHOLOGICAL: THERE ARE  NO BOUNDARIES B E T W E E N PA S T A N D P R E S E N T. T H E R E F O R E , W E A R E E A S I LY P U S H E D INTO MYTHS” Sergey Bratkov The Russian-Ukrainian representative of photography

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Sergey Bratkov Slogan Neon, photo printing 2010

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No Brand Vacuum

This is how Soviet laptops and Soviet kettles could have looked. This series seems to be missing Soviet joysticks and game consoles. When the planned economy of the Soviet Union gave way to the consumer economy of the West, the cultural crucifixion of an object took place. What once seemed a tangible physical object endowed with specific functions became dematerialized and turned into an image. The Soviet Union used to treat an object as real, performing a particular function. But the era of consumerism has replaced the real function and materiality of the object with its image. An enormous variety and number of notebooks have been produced, leading to the fact that when an artist designed a brandless notebook, it creates great effect. In the early 2000s, graphic designers assigned a brand name to any icon they were working on, hoping to promote brand recognition among consumers. Now, it is enough to indicate a brand with the smallest and simplest of details and it is already recognizable as a notebook of that particular company. Observing the presented works, the viewer gets the feeling that these objects are made out of stone and will never work, just like in one of the Soviet fairy-tales, where a boy asks a genie for a phone, and receives a device made out of marble. The vacuum of the absence of brands refers to the transition to a large-scale and totally segmented market of goods. An item is presented horizontally and vertically in all possible variations. Notably, the segmentation is almost identical in different countries and cities. The fundamental differences exist only in two aspects of an object: the price and marketing.

“WHEN THE PRODUCTIVIST ECONOMIES OF THE FORMER SOVIET UNION B E G A N T O G I V E WAY TO THE CONSUMERIST ECONOMICS OF THE W E S T , W H AT B E C A M E E S S E N T I A L WA S T H E C U LT U R A L S A C R I F I C E OF THE OBJECT-INI T S E L F . W H AT H A D O N C E B E E N S U B S TA N T I A L , H E AV Y, A N D S O L I D , N O W D E M AT E R I A L I Z E D INTO AN IMAGE: LIGHT, DESIGNED, DISPOSABLE — A FILIGREE OF SIGNS” Isabelle Szmigin the author of the article “The aestheticization of consumption: an exploration of ‘brand.new’ and ‘shopping’”, 2006

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Anna Zholud Household Appliances Canvas, oil 2009

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A Monument to a Gadget

Artists Aristarkh Chernyshev and Alexei Shulgin, members of the Electroboutique collective, created a complete collection of gadgets. According to Baudrillard, a gadget is a thing that is not included in the system of other real things. For example, a kettle — it is a thing, not a gadget, because it allows you to drink tea. A kettle is integrated into a sequence of actions, thus acquiring a designated function, and becoming an element of a long-established culture that is maintained through a specific and commonly performed ritual — tea drinking. The concept of a gadget was invented to identify underthings which perform a function in itself, without being embedded into a succession of actions. It does not have a link to the outer chain. For example, an iPod is a gadget. A virtual recycle bin on the newsfeed which places posts in the trash is also a gadget. But a particularly curious example is a take on Tatlin’s Tower. Any person, who has conceived a perfect world order, especially if she is an artist, seeks to build a monument to such a world order. This art object demonstrates that today we have reached the fulfilment of the world order with the help of gadgets. In their time, Aristarkh Chernyshev and Alexei Shulgin were pioneers of Net Art. They were the first to make a list of classical techniques of contemporary art. According to the authors, artists who use such techniques do not produce art, but its invariant — “artok” [the diminutive form of “art” in Russian]. In this regard, typical methods include greatly magnified objects, recombination, combination of the incompatible, and the placement of the objects in a paradoxical context. The essence of “artok” is to remind the artists, and to explain to people that the trivial techniques of modern art should have already been acknowledged. Artists can manipulate the audience by employing certain tricks, but the audience should not succumb to provocations.

“ N O WA D AY S RUSSIANS SPEND MORE MONEY A N D S AV I N G S O N HOUSING, GETTING M O RT GAG E S F O R A PA R T M E N T S , LEASING A NEW CAR, INCREASING THE BUDGET FOR H I G H LY D E S I R A B L E I T - T E C H N O L O G Y, I P H O N E S , I - PA D S AND HOUSEHOLD EQUIPMENT” Reinhard E. Döpfer Chairman of European Fashionand Textile Export Council (EFTEC)

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Electroboutique Shop Installation 2008

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Brandrealism

“Brandrealism is the substitution of true reality with a created reality. You are what you eat, what you wear, and what kind of car you drive. The inner essence of man is of secondary importance. The brand defines a real human face. Expression itself happens through the commitment to the brand. The world was divided into two parts: the boundary between good and evil passes now between those who drink “Coca-Cola” and others who chose “Pepsi”. The apocalypse is coming. You have to make your choice today. If you have not decided yet and still drink kvass, tomorrow will be too late. The universe will punish you. If in your heart you like Hugo Boss, and actually wear D&G — it is the ultimate hypocrisy of today. The mortal sin of the XXIth century. “We, the supporters of brandrealism, are the last island of freedom of spirit. Following the teachings of Aristotle, we see the conflict of brands as if from outside. Like the painters of ancient Greece and their later followers — the artists of the Renaissance, we use the same charismatic brands as the Olympian gods or Jesus and the apostles. In our time, their place was usurped by known brands. Modern society worships them, and finds in them an outlet and complicity. Some fall into religious ecstasy when buying their favorite brand. Gods live in boutiques. We will help you not to get lost in this vast and magnificent world of consumerism.” — Sergei Shnurov,  the manifesto of the artist

“ T H E W O R L D WA S D I V I D E D I N T O T W O PA R T S : T H E BOUNDARY BETWEEN GOOD A N D E V I L PA S S E S N O W BETWEEN THOSE WHO DRINK “COCA-COLA” AND OTHERS WHO CHOSE “ P E P S I ” . YO U H AV E T O M A K E YO U R C H O I C E T O D AY. I F YO U H AV E N O T DECIDED YET AND STILL D R I N K K VA S S , T O M O R R O W W I L L B E T O O L AT E ” Sergei Shnurov Russian rock musician, painter, actor, television personality and composer, leader of the group “Leningrad” and “Ruble”

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Sergei Shnurov Shirt Canvas, oil 2005

Demand for Clothing Light Industry Yesterday, Mass Market Today

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Anna Zholud Clothes Hanger Metal 2008

These works could be exhibited in the Soviet time — restrained, academic, graphical, then held in high esteem. In Soviet era, such artists existed outside of conformism and non-conformism. Not only in the artistic approach, but in the objects themselves exists the notion of past and present. Some people remember the times when people in the street were dressed the same; a woman had to make enormous efforts and use her ingenuity to emphasize her individuality. Factories and plants produced the same clothes and shoes over the years out of uninteresting material. These items filled the shelves, but were not pleasing to the eye. The clothes hanger on the right page speaks of the new times — of the mass market of clothes. But the absense of brand identification on the clothes marks the Soviet era. The past of the clothing industry, a punishment for women, lacked the most desired element — fashion. The sales counter was always in between what one desires and industry itself. The most desirable items were always behind or below the counter in the hands of the salesmen. The artist visualizes industry in the spirit of the new times, accessible with multitude of choice.

“THE SOVIET ERA WITH I T S V E RY F I R S T Y E A R S — IS THE ERA OF THE SOVIET AUTHORITIES’ DISLIKE OF SOVIET WOMAN” Alexander Vasilyev Russian and French fashion historian

After the boom phase of demand for clothing, expanding from 2002 until mid-2008, Russians learned a lesson in the crisis year, 2009: saving before consuming. Retail sales of clothing crashed by between 29% and 40% in 2009. Since 2012, the partial restoration of the middle class has evoked a growing demand for mid to upper-mid-range clothing. This trend is expected to continue until 2015. However, as Russians are now using their brains rather than their stomach in making purchasing decisions, they pay more attention to the relation between price, value, and quality. They want “fair” prices and transparency in price labeling. “What is the “true” retail value of a T-Shirt”? Is it worth 1,000 rubles or 4,000 rubles? The benchmark for “fair” and “transparent” pricing of fashion items are the price tags openly displaying Russian prices alongside European pricing, commonly applied by retail chains like H&M, ZARA, STOCKMANN or MARKS & SPENCER in Russia.

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Anna Zholud Light Industry Metal 2008

“AS A GENERAL PHENOMENON, EXPENDITURES FOR CLOTHING ARE ON THE DECLINE IN R U S S I A S I N C E 2 0 0 9. R U S S I A N S ARE NOW USING THEIR BRAINS R AT H E R T H A N T H E I R S TO M AC H IN MAKING PURCHASING DECISIONS” Reinhard E. Döpfer Chairman of European Fashion and Textile Export Council (EFTEC)

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Consumer Confession

Artist Alevtina Kakhidze draws things she sees in shop-windows and thus attributes them to herself. This is both a therapy for the artist and a metaphor for a consumer — instead of buying everything you can manage to acquire, you can replace or displace excessive consumer desires. According to the artist, since the collapse of the Soviet system, we are increasingly experiencing the evolution of consumer desire. Alevtina honestly admits that ontologically, as a woman, she is also consumed with desire to buy beautiful things, but she realizes that it will not lead her to happiness, so she invented this therapy, in order to avoid unnecessary purchases. In addition, she sets her own rules — drawings can only be purchased for the same price as the cost of the object itself. It is obvious that there is a potential for sales of only those drawings in which the artist depicts some kitsch that does not cost a lot of money. The artist also reflects upon this issue in the story lines of the project she is writing about the pictures. These two works by Alevtina Kakhidze became famous as they were purchased at the lowest price of the last 50 years at the Vienna art fair. It is generally accepted that art can not be cheap, so the price was called “scandalously low.” Effectively, recognized art can not be cheap at all. Otherwise then there is a suspicion that it is either a design or a mass produced item, or not art at all. But the fact that it can be purchased at the fair automatically made it art. From an artistic standpoint, this position is extremely important, but unfortunately it does not result in financial benefit to the artist. On other hand, it leaves the artist as a true artist. Alevtina showed in her works that there can exist the most fractional spark of art, which can be embedded in the work and sold as work of art. You can not assign something to be art if art is not there. Such a concept can only be reached as a result of inner intellectual discourse.

“ A L L M Y PA I N T I N G S A R E D R AW N N E A R SHOP-WINDOWS. THIS IS THE MOMENT WHEN YOU LO O K AT A T H I N G A N D YOU THINK — TO BUY OR NOT TO BUY? AND THEN I D R AW T H E S E T H I N G S . FROM THIS MOMENT, THERE IS NO NEED TO BUY IT — I ALREADY H AV E I T ! I F YO U WA N T T O B U Y T H I S P I C T U R E , I S AY P I C T U R E COSTS AS MUCH AS T H E PA I N T E D T H I N G ” Alevtina Kakhidze artist, curator, performance artist, co-founder of the privately funded art residence for foreign artist

Alevtina Kakhidze Stories of The Most Commercial Project Installation, verious techniques 2013

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Alevtina Kakhidze The Most Commercial Project (Perm) Ink, paper 2012

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The Pursuit of Happiness

A series of family portraits by Philip Dontsov consists of several three-dimensional images. They show the so-called “happiest moments of life together”: animated pictures from family vacations that usually stand on shelves in the house of an ordinary family. The family depicted in this series was been born digitally. Nobody knows what kind of people they are, as there is no clue to reveal who they are and where they live. They have no name other than “family”. Usually when you come into a store to buy a picture frame, there is already a picture in the frame that shows you how things should be. There is a hint of what should be in this frame and how it should look. A Plastic family. Fake joy. A certain image where it does not matter who is depicted, as long as the poses are in the focus, as well as line-frame and smiles. The artist makes a series of stereotyped patterns of the family. These works are easy to read. Soviet stores did not sell these frames, or rather they had no way to suggest how the picture in it there should look.

“THE MIDDLE-CLASS TENDS TO BE MOST SENSITIVE TO T H E T H R E AT O F U N H A P P I N E S S . THEY ARE BOUND TO LIVE I N A S TAT E O F P E R P E T U A L A N X I E T Y, C O N S TA N T LY O S C I L L AT I N G S A F E T Y A N D I T S ENJOYMENT. THE UTOPIAN BLUEPRINT REPRESENTS P R E D O M I NA N T LY M I D D L E CLASS DREAMS, SOCIETY I S P O R T R AY E D A S P U R I F I E D F RO M U N C E RTA I N T I E S   A N D INSECURITIES” Zygmund Bauman from the book “The Art of Life”

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Philip Dontsov Father Digital animation, loop 8 sec. , digital frame, SDÂ memory card 2006

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Art Vandalism

The billboards calling on to fight vandalism appeared last week in numerous areas of Vladivostok. There were 30 posters that could be categorized to three types: some of them depicted a promenade lined with lanterns; others portrayed “parasites” with spray paint, symbolizing vandals; the rest pictured a faceless figure in a robe with the caption “Vandalism — destiny of cowards.” The banners were accompanied with a reminder of the 214th article of the criminal code of the Russian Federation “On vandalism”, according to which the maximum penalty is imprisonment for up to three years. The problem of vandalism has always been one of the most acute ones. In mid-January, the head of Vladivostok administration, Igor Pushkarev, urged citizens to cease being indifferent and not to overlook someone breaking or stealing public property, commenting in his blog “Live Journal” that “There are people who continuously spoil something that belongs to you and me. We build squares, strive to make them as beautiful and civilized as we can. But as it turns out, not everyone wants to live comfortably; apparently, someone takes more enjoy in devastation and squalor.”

“THERE ARE PEOPLE W H O C O N T I N U O U S LY SPOIL SOMETHING T H AT B E L O N G S T O YO U AND ME. WE BUILD SQUARES, STRIVE TO MAKE THEM AS BEAUTIFUL AND CIVILIZED AS WE CAN. BUT AS IT TURNS OUT, N O T E V E RYO N E WA N T S T O L I V E C O M F O R TA B LY ; A P PA R E N T LY, S O M E O N E TA K E S M O R E E N J O Y I N D E VA S TAT I O N AND SQUALOR” Igor Pushkarevartist the head of Vladivostok administration

Ekaterinburg, Russia Graffiti 2013

Kolomna, Russia Artvandal Graffiti 2013

Vladivostok, Russia Graffiti 2013

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Svetlogorsk, Russia Graffiti 2011

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An All-Inclusive Paradise

Trimalchio is a character in the first century AD Roman work Satyricon by Petronius. He plays a part only in the section titled “The Banquet of Trimalchio”. Trimalchio’s name became a symbol of wealth and luxury, an unsustainable gourmet, and unbridled pleasure. Collective AES+ F has introduced something similar in the realities of today. Trimalchio — a former slave, freedman, the nouveau riche, giving multi-day feasts in his palace. AES + F imagined him not as a specific character, but as a collective image of a luxury hotel — a temporary all-inclusive paradise. The work project “Feast of Trimalchio” depicts two groups of people — the “white” and the “black” caste. The “white” casteare people from the Moscow establishment aged between 5 and 80 years. Representatives of the “golden billion” and modern Trimalchio guests: businessmen, celebrity divas, bohemian characters. All of them are dressed entirely in white. The “black” caste are the servants at Trimalchio:young and sexy Asians, Africans and Latin Americans. Maids, waiters, cooks and security guards are in uniforms or traditional ethnic costumes. Luxury is the language of the modern consumer paradise. The role-playing games of “Feast of Trimalchio” are easily recognizable and quite harmless: massage, golf, surfing, and so on. But it turns out that the servants are not only thestaff, but also members of secret orgies. They have to realize any fantasy of a “master” — from gastronomic to erotic and masochistic. This similarly constructed plot and impeccably designed visual logic appeal to the best works of classical painting.

“ T R I M A L C H I O — A F O R M E R S L AV E , FREEDMAN, THE NOUVEAU RICHE, G I V I N G M U LT I - D AY F E A S T S I N H I S PA L A C E . W E I M AG I N E D H I M NOT AS A SPECIFIC C H A R AC T E R , B U T   A S A COLLECTIVE IMAGE O F A L U X U R Y H O T E L — A T E M P O R A RY, A L L I N C L U S I V E PA R A D I S E ” Lev Evzovich the ideologist of the group AES+F

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AES+F From The Feast of Trimalchio project Video. Digital collage on paper. Oil on canvas 2009â&#x20AC;&#x201C;2010

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Alevtina Kakhidze

TO B UY O R N OT TO B UY ? I n t e r v i ew by O l e n a Kova l yova

Alevtina Kakhidze — Ukrainian artist, curator, performance artist, co-founder of the privately funded art residency for foreign artist, Malevich Award laureate. The artist Alevtina Kakhidze in her “Most Commercial Project” has identified the strange, captivating phenomenon of a person, standing by a shop window with an eternal question cribbed from Shakespeare — to buy or not to buy? Alevtina sketches the products from the windows, and then assigns the value of the products to the drawings themselves. Expensive or economical, fashionable or quirky, the objects seduce the viewer with their impracticality. How can one possess something one desires when opportunities are limited? Why is the desire to consume increasing so rapidly in Russia? Can Art intervene in some way? This is what we discussed about with the artist, who in her experience has managed to “possess” quite a number of things and practices. After the completion of the interview, it was obvious that the manner in which Alevtina was speaking, her sincerity and openness in expressing her desires and her artistic visions would be impossible to convey without keeping the style of the conversation untouched. This version of the text is presented to the reader with full intention of making them a full witness to the conversation with the artist.

You know, the book Enough Retail, which we are working on, will consist of ten chapters, and the chapter about art is a Catalogue of a Non-existent Exhibition. The idea behind it is that, through the works of these artists, there could be a way to show what important questions exist in our society and how art speaks about it. Interesting. I like the idea that you don’t have to make large-scale exhibitions, but show an idea through a simpler and more affordable format, such as the book. Am I right, or is this a game of media? In some way, it’s one or the other. Mostly, the first part. We do not have the opportunity to make an exhibition, but we wanted to transmit the ideas, show what they are exposing in art, and maintain the value of the experience. This is why this part became interesting to all of us. It’s a different type of sensitivity compared with the other topics and research methods used in other chapters of this volume. There will be good contrast, which will set this section apart. So it will be a book, which reconsiders whether there is Enough Retail in the city and uses art to reflect on it. I am also concerned about it. It always turns out that art competes with large industries, such as the movie industry, for example. But art doesn’t have adequate opportunities. Often, artists try to make their installations big in size. They think that if they make it large in size and scale it up, the impression of it will be greater. But there is way to make a scaled model reducing production costs and time. But on the other hand, when I am in a perfectly executed large-scale space, it gives me a strong impression. Somewhere between these two is a dilemma of sorts.

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Will you speak more in detail about "The Most Commercial Project"? As far as I know you were able to realize it also in Russia, right? Yes, I executed the project brilliantly in Perm. I was also able to make a video about the process and show it later in Prague gallery. In general there are two narratives in the project. One — my drawings, and the other, the stories around the drawings and what happens to them. Honestly, it’s hard to speak quickly about a project that has a history of 10 years. It exists in various media: there are photocopies, original drawings, texts, and videos. First I was drawing inexpensive things, then I scaled up later in Perm- even doing Martin Margiela and other so-called “cool” luxury designers. Later, when I was in Denmark, I did antiques. Later on, art exhibitions. I recently thought about that time — I was at this exhibition, maybe you have heard about “The code of Mezhigorje”? I was walking around this show and thinking what a miserable person he was, this man — I mean Yanukovich. He didn’t know anything about the practice of art, so he could materialize his desires not in reality, but rather in the way I am doing it, for example. I am also an enormous materialist. But all I was doing, was drawing things, I did not receive any gifts or commissions from anyone: no crimes were involved. At some point, I began thinking that the acquisition of a piece is different than the experience one gets from it. For example, the flight in the private plane (the performance “I am late for the plane, late for the plane which is impossible to miss”, which was realized in 2010 with the assistance of Rinata Akhmetova of the Ukraine Development Fund ), here it no longer speaks of some sort of aesthetic pleasure or looking at a surface, of a painting, for example, all of which can be easily replaced by a drawing. But a flight in a private jet cannot be replaced by a drawing. Importantly, art gave me the sophisticated opportunity to pass all through these stages. So the artist is offered an opportunity to heal herself? In some cases, yes. It can also provide tools to the people who identify themselves with these works. It is not necessary to draw the way I do. But you can keep the metaphor as a tool so you possess the representation of something rather than the object itself. You see, what’s interesting is that the metaphor works perfectly for orthodox countries. The reason is that we didn’t have sacred objects; we always had the religious icon. And an icon is a representation of God. I am not a religious person, but all of this is imprinted in our background in Ukraine and also in Russia. The point under discussion is not the power of literary force, as it exists, for instance in Poland,

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rather, the power of visualization. And even the word “image” itself coincides with the drawing and sketching of things, as in manifesting, that they, the images, in fact, exist. My story is similar to and particular to all those who grew up in the Soviet Union. They simply weren’t surrounded by a variety of products and choices, accessories, such as napkin rings, business card holders, fancy umbrellas, wine glasses, and so on- all of those things in the “fancy” category. All these tend to appear in our environments after “basic things”. For me, August Macke meant a lot when I started my research. He drew women standing at shop windows. It is important to see his works in order to understand my project. He painted a surprisingly large number of portraits of women in this context. I’m kind of like Macke’s women. But I think I'm a little bit different. Curiously, it was my teacher Norman Bryson who first showed me the works of Macke. He said, look here — it’s you. August Macke, Hat Shop, 1914

“He didn’t have any knowledge about the practice of art, so he could materialize his desires not in reality, but rather as a way I am doing it. I am also an enormous materialist. But all I was doing to possess things, I was drawing it.”

All my paintings are drawn near windows. I do not have pictures, which I drew from memory. In short, it's that moment when you look at the thing and think — to buy or not to buy. And it is the state of longing and stress. Like Macke’s woman: she will go to the store and buy a hat, or she just leaves the shop and buys nothing. That is basically what about my whole project is. I imagine and interpret it this way. And he, August Macke, has created these images in different variations. I don’t know any other more powerful image of consumerism than those of August Macke. Remarkably, when I showed my drawings in Europe, there was little understanding. Later I began talking about why I do it and what it is all about, when you have no possibility of buying something. I was speaking about how consumer desires can evolve into something bigger. My European friends don’t engage very much with this topic. They don’t suffer as seriously as we do. For example, when I came to study in Europe in 2004, I had never before seen a ring for table napkins. This is what I drew first in my project. To be honest, for the longest time I couldn’t understand the purpose of it and how it worked. The napkin ring became an object of magic for me. And when I was telling this to Europeans they were impressed by my story, but not by my drawings. In 2011, I went to the Vienna Art Fair and exhibited five of my drawings, which were positioned according to the price of the drawn object, from low to high. There was a spoon for 3.40 Euro, beautiful bar soap for 14 Euro, and so on. In the end the most expensive object drawn was a chair by Philippe Starck, which cost about 3,000 Euro. At the time I had the opportunity to meet with the collectors, who come before the fair opens. (Imagine what they are like? They beat the crowd

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in buying almost everything that is worthwhile on display). So the collectors and the buyers came, I made a presentation, explained the main idea, and, of course, they bought only the cheap drawings. Later, the Viennese newspapers wrote that the 2001 Art Fair sold drawings for a ridiculously low price. Those were my drawings of the spoon and the soap. Never would I be able to exhibit such cheap drawings in the gallery space, which has its own associated expenses. But because it was a non-commercial project, I was able to get away with it. The funny part in this story was, that the ten collectors who were there started arguing amongst themselves about who will buy the first drawing. And the argument behind why they bought the drawings they did remains: were the cheaper ones more beautiful than the ones that were more expensive? The incidents happened not only in Europe. And this story, along with the previous one, belongs to the second stage of the project- the narrative around the drawings. For example, after the project exhibition in Perm, where the project was displayed in a real boutique with a few charming women who knew precisely the price of pieces from Martin Margiela and Alexander Wang. I drew those pieces, and explained my game rules to the audience about the price of the drawings. And after I left, they wrote me a letter: Alevtina, maybe there is way to keep your drawings on our walls, we love them so and they do luxuriously freshen up the interior. Even though, I told them my idea, they still did not understand it, and that is why they asked to keep them. Similarly, I could ask them for a pair of shoes from Margiela and Wang and garner a similar response. I patiently wrote them a letter, explaining the rules again, and suggested a compromise: to rent the drawings to them for some time, until Wang, for example produces a new collection of shoes, say in three years. By that time they will be sick of my drawings. And of course they said no. I took the drawings away. I knew then that I needed to be tough. It was a battle for me, protecting the full intention of art among things. Then there was a time when I was asked to draw wine and some fruit. I was telling them that I do not draw every day, “basic need” things or food. I just don’t. All I draw are those products that a person can do without. It has to be connected with infatuation. And what wine can you really be infatuated with? But a brooch you can be infatuated with. And this is worth examining, how drawing limits those possibilities. Now I almost never draw from the shop windows. You can say I am healed. But occasionally I still can. Rarely. ♦

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Inventory of Subversions

1. Opened in March 2014, a new luxury outlet in the Louvre Museum’s Carrousel du Louvre shopping mall. The shopping area is 11,000 m2 and includes an exhibition hall and one of the few entrances to the Louvre museum.

7. Bradford Kelleher, a pioneer of museum merchandising who founded the Metropolitan Museum of Art’s first full-fledged gift shop and first satellite gift shop. He oversaw the creation of countless artful and educational tchotchkes.

2. The National Gallery shop in London in 2008. Selling the classical gift shop set: books, coffee mugs, cards, T-shirts, etc. See 3. to compare.

8. Guggenheim Abu Dhabi. Starchitect: Frank Gehry. Expected Date of Completion: 2017. Guggenheim’s Middle Eastern outpost expected to be an institution 12 times the size of its New York sister.

3. The National Gallery shop in London in 2014 with a more sophisticated retail approach. Selling goods from stationery to jewellery, special editions of food & drinks ,and home decor. See 2. to compare.

9. Louvre Abu Dhabi. Starchitect: Jean Nouvel. Expected Date of Completion: 2015. Historic contract with the French government for lending privileges from three of Paris’s most esteemed art institutions.

4. Numerous Vatican Museum gift shops selling low-quality souvenirs and describing the trinkets In the cardboard inserts as gods, good luck charms, and even spirits.

10. The Murakami installation at the Brooklyn Museum is a fully operational Louis Vuitton branch selling some of Mr. Murakami’s designs for that luxury brand. “It is the heart of the exhibition,” said the artist of the Vuitton shop. 2008

5. The walls of a shopping mall serve as canvas for media artists. Singapore’s iconic retail mall ION Orchard.

11. The artist Takashi Murakami re-appropriated the LV logo in his painting. The World of Sphere, 2003. Courtesy of Marianne Boesky Gallery, New York.

6. Moscow Tsvetnoy Central Market has an integrated exhibition gallery on the fourth floor. The floor is totally dedicated to luxury brands unlike other levels. Art can be combined together with perfume presentations.

12. Signature of a French street artist Kidult. The artist promotes the idea of “visual dictatorship” over brands’ identities.

20. Karl Lagerfeld transformed Chanel’s Fall/Winter 2014 show into a massive supermarket with produce and canned goods adorned with the brand’s logo.

14. Recent and many other reactions of brands on Kidult’s activity (see 12,13) is opposite to his goal. “We say bravo to your approach. We were wondering if it would be possible to acquire your installation in the context of Chanel Art”. 2014

21. Soft butter by Bvlgari. Designer Peddy Mergui wraps over a dozen basic food products — from eggs to coffee to salami — in high-end designers’ patterns and big brands’ famous packaging. Brands are beginning to branch out: meet Apple’s iMilk, Prada’s flour, and Burberry’s ramen.

15. “The economy in which we live in is like cerebral dysfunction, and the people at the bottom of the ladder are starving. The Revolution will be the next step. This truth is deeply inscribed in my work” — Kidult. (See 12-14.)

22. Site specific, permanent land art project by artists Elmgreen & Dragset — Prada Marfa — boutique inaugurated in 2005 and sited in the middle of the Texan desert; it never opens and never sells anything, though Prada shoes are real.

16. Liquidated Logos by ZEVS touch upon fashion, financial, and pop culture brands to comment on their omnipresence yet instability of their existence in today’s world.

23. Prada Marfa has become a platform for discussion. It has been vandalized with signs for popular espadrilles brand TOMS shoes and statements that the irony of Prada Marfa is fake. 2014

17. Visual Kidnapping by ZEVS: “if the brand on the billboard kidnaps the attention of the public with the purpose of consumer demand, I reverse the situation and I kidnap the model on the poster and I demand a ransom of €500,000.” 2008

24. Prada Oasis (see 24.) and Damien Hirst’s Pharmacy Juice Bar is the working selling bags boutique and art installation placed together in a sand desert of Qatar as a part of the exhibition in Alriwaq Doha Museum. 2013–2014

18. Liquidated Logos (see 16.) transformed from critical art into fashion elements. People started to produce T-shirts, leggings and accessories.

25. The “Prada Oasis” store features a display of “Entomology”, a limited-production range of bags designed by Miuccia Prada and Damien Hirst. The bags are being sold through a silent auction.

19. Karl Lagerfeld produced Chanel-inspired “works of art”, which served as a backdrop for his catwalk as if it is in a true gallery. Afterwards those “works of art” were actually in demand by real art galleries. 2013

26. The new neon Playboy bunny and the concrete “box” and car just outside Marfa, Texas. Anything that is erected near Marfa is inevitably compared to and/or assumed to be art (see 21.). Big art or big advertisement? 2013

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13. Artist Kidult paint bombed luxury boutiques explaining that “retail outlets have once used graffiti as a commercial tool or to be ‘cool’ without knowing the culture. If they really like graffiti, I just gave them what they love”. 2011

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27. 300 online art ventures have been established across the world in recent years. 59% of collectors believe we will see an increase in owners using their art as collateral in 2–3 years. Source: Art & Finance Report 2013 by Deloitte.

34. Iranian couple Farhad Moshiri & Shirin Aliabadi Operation Supermarket: Tolerating Intolerance. 2008, 2nd Singapore Biennale.

28. Mexican street-artist from London, Pablo Delgado pastes smallscale figures and their shadows to walls. None of his works are found in the city. They are available, though, in the only street-art gallery, which is a notional oxymoron by notion, for £500 per piece.

35. Jani Leinonen End of an Ideology, 2013. Artist uses well recognized logos of brands to communicate his own messages like “Don’t cry because it’s over, smile because it happened” or “Promises are like stars — the darker the night, the brighter they shine”.

29. Banksy Tesco, 2009. This artwork appeared overnight on the wall of a pharmacy in Islington, north London. The piece shows children pledging their allegiance to supermarket giant Tesco.

36. Jani Leinonen. From the series All bad that happened to others is now happening to us. 2008, Finland. Each package showcased various social issues like inequality, racism, religious persecution, etc. by changing the outfit of the girl at the cover.

30. Banksy Sorry! The lifestyle you ordered is currently out of stock, 2004.

37. Artist Jani Leinonen buried at an improvised cemetery the most wellknown brands by putting on memorials for them: Death of Gucci, Death of McDonald’s, Death of YSL, Death of Andy Warhol, others. 2012

31. Banksy Cross of consumerism, 2004. The work takes aim at the shopping frenzy during Christmas. Jesus is displayed like he is crucified, but instead of a cross, he holds three carrier bags on each hand.

38. J. Leinonen Shoes Liberation Army, 2010. “Once shoe designer Parikka had to destroy a whole shoe line because Adidas legal department saw ‘three lines’ in her shoe design. I wanted to see what happens when you put 100 copyright infringements in a shoe and place it in a museum” — the artist.

32. ARTVANDAL at Kolomna, 2013. The billboard shows a young couple painting the walls of their apartment, making repairs with the money they easily received from bank as a loan. Street artists added some paint above as a protest against to mock the advertisement.

39. Chinese artist Liu Bolin uses his own body as a canvas, painting himself into the background. The artist creates scenes that are statements about our relationship to our surroundings representing the concept of invisibleness, mimicry and transparency.

33. For a series of street art she entitled “Pro Bono Promo” artist D. Pankowska snuck around Brampton, Ontario’s downtown at night, painting the names of various major brands on walls, flower boxes, and concrete barriers. For each piece, she used that brand’s most popular product as her medium.

40. Liu Bolin Alber Elbaz for Lanvin, 2011. “There are many Chinese citizens who need to prove themselves by buying Western brands. So in this series, I hid each designer in his or her own designs. You think about the relationship between the world we create and ourselves.”

48. The term “brand realism” suggested by Sergey Shnurov can be applied as well to the works of Konstantin Latyshev Muscovite girls. 2000. Acrylic on canvas.

42. Artel Of Disabled Color Blinds “Artists-Pachkuny” Art For Various Classes Of Consumers. Represents the samples of “popular contemporary art”, attracting by its hand-made, deliberately low-tech manufacturing and humour.

49. Vladimir Kozhukhar. Tekhnomarket III, 2004. Oil on canvas. Artist looks down on the world from a cold distance, excluding reality.

43. Art galleries often project the image of catering only to a select group of (rich) connoisseurs. One in Helsinki has chosen to go on directly the opposite route. Art pieces are displayed exactly like the typical mart — on the shelves, counters, etc. — with all the shopping trolleys and baskets. 2006

50. Natasha Struchkova, #10 From The Series Futurussia, 2008. Acrylic on canvas. I want to find a symbiosis of cultures and traditional painting to show the changing media world, where it is impossible to keep track of the changes because they occur in different directions at the same time.

44. Desire Obtain Cherish (DOC) aka Jonathan Paul Addicted At Birth. Mixed Media, 2012. Desire’s kitschy, yet critical work exposes society’s inability to control itself as it examines the commercial promise of fulfilment and happiness that ends in dependency.

51. Nikolay Ridniy Provisions, 2009. Bags, grocery. Installation view at Regina Gallery. Moscow. 2009. Unsuited urban bags are filled of food and household goods — cereals, pasta, salt, matches and are put on the podium as in expensive boutique.

45. CF Art Group opened Point of receiving concepts from the population. Artists offer visitors of the contemporary art fair not only the opportunity to spend money, but also to earn $10,000. This amount was offered for any creative concept that can be used to further the artists’ work.

52. Nikolay Vasilyev Tape art, 2012. Artist makes pop art portrait drawings by the tape. He has a series of portraits of kids, apparently from the Internet, where the advertisement booklets serve as a canvas.

46. The process of unwrapping products is something that fascinates, the same as watching fire, falling water or people while working. The artist shot himself everyday when he unwraps products.

53. American artists Alain Guerra and Neraldo de la Paz resembled the question of the amount of used clothes all over the world. It does not disappear, it accumulates.

47. Damien Hirst produces not only art, but also some goods like accessories, furniture, house decoration, etc.

54. Ben Frost pay homage to pop culture iconography. The artist uses McDonald’s French fry containers as his canvas showing the retailer’s own iconic status as one of the cultural icons. 2013.

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41. Supermarket of Art. The motto of the art supermarket is to make art affordable. Young and renowned artists alike offer their works for sale. Prices are moderate and run between 50 and 299 Euros. 2013, Vienna.

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55. Dmitri Provotorov’s dinosaurs seem to suffer of consumerism. Art Moscow exhibition, 2012.

62. Banksy often refers to the topic of consumption. In this work, Dorothy flying away with her house to the Land of Oz is paraphrased.

56. Equivalent by Anastasia Kopytseva, 2012. In the genre of realistic portrait, the artist depicts her own peers — beautiful, young, physically developed and strong. The motto of the exhibition: “The world is nothing but a depressing pseudo-pleasure” Guy Debord.

63. Street artists Icy and Sot installed a Big Can of Coca-Cola in Arab county, where the beverage was prohibited. 2012.

57. Garbage Panda by Alla Elesinova and Natalia Fomicheva. The animal is made of transparent plastic and packed with garbage collected in Yuzhnoye Butovo park, Moscow. 2011.

64. Gabriel Kuri, Trinity (Voucher in triplicate), 2006. Three hand-woven wool tapestries imitate gigantic receipts. The title sends the works to Christian Holy Trinity and suggests that shopping is a new religion. Each 334 x 118 cm. Collection of Gordon Watson, London.

58. Afimall in Moscow attracts visitors with gigantic matrioshkas. 2010

65. Paying homage to Warhol’s Pop Art, Fiber artist Holly Levell Supermarket Stitch series elevates the common condiment, candy, soda with textile rather than ink. 2012.

59. The artist Dmitry Tsvetkov worked on this project for about ten years. Initially, he just put the doll in the coffin, but over the course of a few years, he made a series of coffins — one a week or so, five years later he has made funeral wreaths and began writing about nesting dolls.

66. Art Group “EliKuka” — Oleg Eliseev and Eugene Kukoverov. The artists sell their art by the metre, like fair tailors. Art Moscow exhibition, 2012.

60. Michael Elmgreen and Ingar Dragset This Space Can’t Be Yours refers to the city landscape occupied by advertising. Artists manifest the resistance by promoting on billboards not products, but society’s position. Installation, 2006

67. Aestheticization of trash has become a new trend in art. It both brings attention to the question of ecology and recycling, and the new beauty of trash.

61. The six people in the photo are laid off workers. Artist Liu Bollin made them invisible in the deserted shop where they had lived and worked all their lives. They have been made invisible by Chinese government when it shifted from a planned to a market economy and 21.7 million people lost their jobs.

68. Another side of aestheticization of consumption is the aestheticization of merchandising. Zupan’s supermarket. Portland, Oregon, USA. 2013.

76. Stas Volyazlovsky exhibition Kiosk Between the Two Towers, 2011. Submitted work can be characterized as a contrast of modern life in Moscow with all its components. Any woman can exchange her underwear for the artist’s work.

70. Hassan Hajjaj is exhibited in numerous museums of Islamic art. He is street artist and photographer. Ever since childhood he lives in London. All his work is tied to his own photographs.

77. AES+F Feast of Trimalchio exhibited at the central luxury market of Kiev, Ukraine. Trimalchio is referred to Satyricon by Petronius (I c. AD), where the character is a freed slave who has become wealthy, throws a great, but ghastly, dinner party where there is too much for everyone to eat. 2010.

71. Artist Natasha O’Connor plays with always-positive image of advertising and subverts it to negative like dying in TOPMAN clothes. Creating contrast through the aestheticization of death.

78. Egor Koshelev Oral Monstaz from series Phobia, 2009. Acrylic on wood. The work reminds of so much desirable in 80’s and 90’s chewing gum and the threats of spoiling the teeth that stand now. So the artist depicts desire of the past and threat of the present in one product — the symbol of two eras.

72. iMilk by Apple. Designer Peddy Mergui wraps over a dozen basic food products — from eggs to coffee to salami — in high-end designers’ patterns and big brands’ famous packaging. Brands are beginning to branch out: meet Apple’s iMilk, Prada’s flour, and Burberry’s ramen.

79. Collectors, and investors as well, are mocked by the CF Art Group of artists with the offer to buy “the most expensive art object”. Art Moscow exhibition, 2012.

73. Ron English Super Supper, 2010. Artist pushes the idea that market and religion tend to dominate in today’s world.

80. Vladimir Semensky says about space as close as possible to the body of one single person. Taking off the clothes, a man supposedly exempt from the things which embodies the stereotypes of his behaviour, tastes imposed on him, habits, images, and patterns of behaviour. 2013.

74. A group of health-food activists called the Food Liberation Army uploaded a video message on YouTube threatening to “decapitate” Ronald if the hamburger corporation failed to answer questions about the quality of its food and its work ethics.

81. Alexander Gronsky Background. Moscow, 2007. Pigment print. Background is the accumulated experience resembling the backdrop, the setting, or mise-en-scene of daily routine.

75. At first glance this image looks like Ronald McDonald and Mickey Mouse is kidnapping some naked child. Within that creepiness is her face, and what makes it worse is when you learn that the girl is taken from a photo of Vietnam War taken in 1972 when her village was attacked with Napalm.

82. Exhibition of Andrey Bartenev and Ksenia Sobchak “History of one centipede” was held at Vinzavod in 2008. There was exhibited old footwear with stickers like “In these boots I failed an exam and then cried”, or “I bought these shoes for a lot of money, now they show my bad taste in the late 90’s”.

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69. Art group Electroboutique at Night of the Arts at three Moscow shopping malls. Multimedia sound performance at three major Moscow shopping malls, performed by a wood-goblin. Keyboard improvisations with sampled voices of animals, birds and insects.

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LASTING

Russian retail is a mix of past and present, local and global, vernacular and imported, but from a foreigner’s point of view is there anything special in that? Can we trace pieces of Soviet past in retail routine? Does it say something important to us? And, overall, what are the leftovers — Soviet legacy that is needed to be fostered or just remuants that will disappear in a while?

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Mar tha Coe - Galeotti & Kat y Asinskaya

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Does Russiaâ&#x20AC;&#x2122;s Soviet past continue to shape the contemporary Russian retailscape? More than 20 years after the fall of the USSR, Russian retail has caught up to that of other countries, but nonetheless remains unique. Part of this uniqueness is undoubtedly rooted in the Soviet past, where retail was completely regulated and controlled by the state. There are different ways that such a retail history might continue to live on in the present: in the spaces people shop, the mindsets of employees, the design of buildings, and even the selection of goods for sale. These various arenas of everyday life incorporate the past in different ways. For me, the most interesting truths are in the micro-level details of material culture, in the objects that we shop for every day. So, in this quest for traces of Soviet legacy in the urban retail routine, where else to start but a supermarket?

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In a standard Russian supermarket, the sections with tea, cookies and chocolate, alcohol and frozen food are often the largest. These are the essentials of Russian culinary culture. It is in this terrain that the Soviet legacy remains especially present. Evidence of the Soviet aesthetic is everywhere: Ostankino pelmeni (dumplings) still come in the same red-and-white, minimalist, flat-design cardboard box that consumers have known since 1954. The Red October chocolate bar Alyonka has been in the same iconic packaging since 1966. Other brands, such as Soyuz-Apollo cigarettes and Indian tea in a yellow box, have been brought back onto the market after a hiatus during the 1990’s. It’s not just about brand longevity. There are new products on the market that are inventions of “Sovietness” with nostalgia-evoking packaging and the use of symbols, colors, imagery and style that create an impression of a Soviet product that never actually existed. The post-Soviet ice cream company RosFrost has a line of sovietskiy standart (soviet standard) ice creams featuring a red flag, the “state quality mark” and the Moscow skyline with a picture of the Worker and Kolkhoz Woman statue that has long been a Soviet icon. They offer the consumer a variety of basic, no-frills ice creams like sandwiches and cones, and classic Soviet flavors such as plombir (cream) and chocolate. In this way they offer not just the aesthetics of memory but try to recreate the actual experience of Soviet ice cream — though the price, quality and even ingredients have changed. How should we understand this turn to Sovietness? On one hand, nostalgia and memory are strong motivators for consumption and are well documented in advertising scholarship. Yet to dismiss this as just another marketing gimmick misses a great deal of nuance: Soviet times were not the glory days of Russian retail, with product shortages, lack of variety, and long lines. It is a surprising choice for advertisers and packagers to evoke the Soviet era in their products and the minds of their consumers. What contemporary advertisers and designers are instead doing, is carefully crafting a cherry-picked nostalgia that omits the bleaker realities of the Soviet past and highlights elements associated with good things: childhood and high quality. It is not a completely false memory, but it’s not the whole truth either. There may also be a certain level of irony at work. The well-known graphic design studio Art.Lebedev was commissioned to design a package for flour and created

Soyuz-Apollo and Troyka cigarettes, 2014

Ostankino dumplings, 2014

Soviet Standard plombir, ice-cream, 2014

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“Soviet times were not the glory days of Russian retail, with product shortages, lack of variety, and long lines. It is a surprising choice for advertisers and packagers to evoke Soviet in their products and the minds of their consumers”

Flea Market, 2005

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Fitness Club advertising, 2014

New Year shopping near Prospect Mira metro station, 2005

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Soviet Cheburechnaya, 2014

a red-and-white polka-dot design reminiscent of popular Soviet tin storage boxes. The irony extends beyond consumer goods. There is “Sovietskiy Diner”, a kitschy theme-restaurant in central Moscow featuring propaganda posters, accordion music and a larger-than-life picture of Brezhnev on the wall. (The prices, however, are not Soviet in the slightest.) A new fitness club advertises its services with the Soviet quality mark, Soviet-style fonts, and we even see the Sovietification of its website (fitness-cccp.ru). Much could be said about the search for authenticity, the role of nostalgia in everyday life, or even the catharsis of the ironic mockery of a past that was often difficult, even unpleasant. What is most interesting, though, are the deeper truths about Russians and their retail landscape revealed in this lasting nostalgia. Some cultures seem perpetually oriented forward, firm in their belief that what makes them great is yet to come; others seem more oriented toward the achievements of the past as the basis of their greatness. If we read the cultural artifacts of the retail landscape as a text, Russia’s orientation appears to be of the latter sort. After all, they don’t just evoke a Soviet past: there are many products with pictures of farmers, country houses and pastoral scenes or even imperial images with tsars and troikas. In a more

“The very same Indian tea”, 2014

contemporary vein, there are neft (oil) brand watches and vodka to celebrate the basis of the current Russian economy and even Raketa’s new line of “Victory” watches with one dedicated to “Crimea 2014”. In evoking the past through its products, Russia is creating a stylized, and idealized version of itself. Ice cream, cigarette packaging, watches, vodka, chocolate wrappers—these are the components of the great Russian cultural narrative, each contributing to the collective identity of the Russian people. These objects not only represent Russians, but tell them (and others) who they are in an ideal version of history. So there is undoubtedly a Soviet legacy visible and present in the contemporary retail landscape. It is a legacy based on nostalgia, national identity, collective memory, contemporary irony and even hipster popularization — equal parts kitsch and classic Soviet design. When a culture can use irony about its past it is beginning to come to terms and reconcile with it. The increasing use of humor and tongue-in-cheekness of Soviet-esque brands is, in this respect, moving Russian retail in a good direction. Yet it begs a question: is the important thing the way the legacy of the past shapes and influences contemporary retail, or the way that retail past and present shapes and influences us?

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Sharon Zukin

“SHOPPING IS A SEARCH F O R T RU T H A N D B E A U T Y” Interview by Mar tha Coe-Galeotti

One of the most widely-read and influential sociologists exploring the contemporary city, Sharon Zukin is a professor of sociology at Brooklyn College and at the Graduate =Centre of the City University of New York. Her interests range from consumer culture and modern urban life — and the extent to which they are one and the same — and she has looked at urban development in cities around the world from New York and Shanghai to the former Yugoslavia. Her books Loft Living (1982, 1989), The Cultures of Cities (1995) and Naked City (2010) consider the evolution of the modern city and the way it is being shaped by often-competing pressures of deindustrialization, demographic change, gentrification, global homogenization and the quest for authenticity. Together these works are her exploration of how modern cities have lost their soul and how it might be possible to reclaim it. Her current research is The Local Shops project — a transnational project looking at local shopping streets in six global cities and the interplay between government and local shopkeepers in the face of urban change.

You mentioned to me that you’d been to the Soviet Union and Russia. Do you remember any specific observations about retail or shopping from your travels? It was interesting to see the greyness of the cityscapes. I remember a very urbanized part of the Soviet Union; it was modern in certain technical ways, but it was very grey and very heavily under surveillance. When I went back in 2008 to St. Petersburg, the built environment was the same — all those historic landmarks and the gilded domes of the cathedrals — but there were so many stores and advertisements and cars; all of those were quite different. I liked Moscow a lot, but when I look at the photographs in the media of shopping on Red Square, I just can’t believe it. When I was there, there was GUM, and it was not a store you would really want to go into unless you had to. I also remember people selling ice cream on the street. And women with a table selling kvass on the street and ladling it out of a wooden barrel into the same two or three cups that everybody is drinking from. But I’m sure they don’t do it that way anymore —I sure hope they don’t do it that way any more.

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I know your current project is on local shopping streets in various countries. Can you talk a bit about your work on street retail and your observations in this project? The Local Shops project involves two local shopping streets (outside the central business district) in each of the six global cities: New York, Toronto, Amsterdam, Berlin, Shanghai, and Tokyo. The streets do not comprise a representative sample in any scientific sense, but we are able to glean interesting views of how cities’ retail landscapes change over time. What you often have in cities that are catching up in long repressed or suppressed retail markets, is that lots of people get into selling things, and they set up shop wherever they can, wherever they can attract customers. If city government and officials don’t want to allow people to sell things in different ways, like street vendors, for example, they can be targeted either for permit reasons or aesthetic reasons because they don’t look right, they look disorderly. Also, the more you have migrants or immigrants, some kind of migrants who are working in that situation, the quicker the city government is to clamp down on them. And that seems to be universal. In China also, there’s been a real campaign during the past 10 years to clear the streets of street vendors and historically this was true in England as well as in U.S. cities. And from time to time it just erupts into an epidemic of regulation and prohibition of street vendors. Then you have, historically, the invasion of supermarkets. Supermarkets were formed the way bureaucracies were formed, in a slightly earlier period: it made rational economic sense to group a lot of different items under one big roof and to organize them according to departments of food in the supermarket. The sudden growth of supermarkets put a lot of independent stores out of business. And then the stores get bigger and bigger — department stores, you know the bureaucracies of the retail world — and eventually more and more technologies were brought to bear to create larger retail institutions on larger scales. So you get the chain stores and transnational chain stores and what we see now in the U.S., and to the same degree in Britain, is internet retail sales — huge, huge, huge. So really the two biggest threats to the retail economy of cities are online shopping and transnational chain stores. You see the appeal of both more and more through branding and in terms of price, because of the economics of scale of those transnational chains, and the ease with which people have adapted to online shopping. These are some of the thoughts that have guided me and motivated me to try to study retail businesses and shopping streets.

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This sounds like a constant case of smaller fish getting eaten by larger ones. What do you think is the impact of this process on cities?

“What you often have in cities that are catching up in long repressed or suppressed retail markets, is that lots of people get into selling things”

Between those two forces — the scope of online shopping and the scale of transnational chains and vice-versa — you really see the evisceration of the very rich retail economy, the very specialized and localized retail economy that cities — especially New York — thrived on for centuries. You can just see the streets changing over the past five years in response to this. An entire block will be made of bank branches, services like hair salons, nail salons, take-out food stores, cafés, restaurants — it’s just everything that people can get online but usually don’t get online. Also, a combination of high rent and technological obsolescence of products is remaking the retail landscape in U.S. and European cities. Some very fine vinyl stores selling specialized genre musical records have gone out of business. The demise of the shoe repair shop is caused not only by high rents — and probably also by the difficulty of recruiting young people who want to do shoe repair — but also by the trend, for decades now, of people wearing athletic shoes. My daughter, who is 24 years old, has never taken a pair of shoes to be repaired. I’ve talked to her a little bit about this. The very concept of shoe repair is completely alien to her. You know, if she buys a pair of shoes with real heels to them, they’ll be relatively cheap, they’ll be fast-fashion shoes, so when they wear out, they wear out; she doesn’t really conceive of repairing them.

So what is the value of retail for cities or in general? A lot of localized retail stores where the residents of an area can do their daily provisioning is a factor that makes a really vibrant city. It’s not dramatic shopping, it’s not romantic shopping, it’s not once a year shopping, it’s your daily or weekly provisioning. Where people can do that, they feel very much at home. That kind of retail concentration, very localized, is a major source of emotional attachment. And these days it could be one of your few areas or spaces of social interaction if you’re online all day, going into a store and paying for something could be the only thing you do that involves talking to somebody. I think that the most important thing for a city’s retail economy is a small-scale entrepreneurial urge, an energy that takes the form of opening a retail business or a restaurant. As I wrote in my last book on New York, Naked City, there are three types of entrepreneurs: the economic entrepreneur who opens a retail business to make money, for a profit; the social entrepreneur who opens a retail business to create a social space, really to foster interaction and maybe even to form a community; and cultural entrepreneurs who want to serve a public like themselves, simply to sell products they use and they

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like to other people. But the point is, you need to have in a culture — any culture — not a disrespect, but a respect for that kind of work, and economic rewards for that kind of work, or a tradition for that kind of work. For example, China has some fairly small-scale companies that exist and were examples of Chinese entrepreneurialism and these surviving old brands have been re-evaluated and promoted in terms of the value of the brand — what we know in terms of the value of the brand. There’s a big promotion of “old brands”, the brands that survived the revolution and the cultural revolution and all the perturbations of the socialist economy. In my project here, one part of my work is looking at re-evaluation of old brands, particularly through the use of nostalgia. Perhaps this is common process of rebranding that happens after times of transition? What are some other global retail trends? Yes, sure, the nostalgia trend seems to be present in all the still-socialist and post-socialist countries: China, Vietnam, Russia, and I guess in Eastern Europe, I’ve read about it in Hungary, too. I’m sure we have the same stuff in New York, but we don’t see it that way in terms of nostalgia. Maybe those cocktail bars here that recreate the speakings of the 1920s, to some degree? But I don’t know if we talk about them in terms of nostalgia; we call them retro or “cool.” There are certainly trends that are traveling ideas around the world. Branding for example. There are certain practices of urban redevelopment like business improvement districts. That’s a traveling idea that circulates the world and historic preservation and innovation districts, and other cultural strategies of redevelopment; they really just sweep through the world. Arjun Appadurai said in his book on modernity that different regions of the world, different countries, go through the same stages of modernization but in different orders so that the advertising industry in India, for example, grew before industrial production or department stores. We had a certain sequence in Western Europe and in the U.S. , but it’s a different sequence, and maybe some stages are not even necessary. If Russia is importing things and never manufacturing its own consumer goods for example, then maybe they never have to go through a stage of mass consumer goods production. Maybe, I don’t know. But I’m sure they’ve gone through branding before they’ve gone through the stage of having small grocery stores in every neighbourhood. In retail, we see certain trends just sweeping the world and it wasn’t like that, really, until the current era of intensive globalization began in the 1980’s. There was so much more — and I don’t say this with regret necessarily, although I do feel some regret for this — but there used to be real distinctiveness of retail stores about the way that people shopped in different countries and in different parts of the world.

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Obviously there are growing trends also in things like data mining and manipulation. Can you speak a bit on how, in your opinion, they are transforming the shopping experience? Is there an ethical limit to this sort of manipulation or are we bound to buy what we don’t need ad infinitum?

“If Russia is importing things and never manufacturing its own consumer goods for example, then maybe they never have to go through a stage of mass consumer goods production”

Apparently, not; apparently there is no limit. This is the latest stage, and a very devastating stage, of the colonization of people’s consciousness. There is an invasion of every cell of the human mind and the human body. And it’s getting harder and harder to escape. Young people don’t realize this is a pact with the devil, but it’s really awful! We cede, we give up whatever autonomy we have as persons, not just as consumers but as persons, in return for the ease of consumption. People are very upset about government surveillance and spying in their lives and government listening to their telephone calls and intercepting their email messages. But, we are trapped when we go online. Our eyeballs are trapped! You know, there hasn’t ever before been a complete technology to do that in our homes or when we are walking around on the streets, but now with so many mobile devices and everybody connecting through the same cyber networks, the cloud for example, we are all completely vulnerable and a lot of people don’t mind. When I talk to my undergraduates about this, they smile indulgently at me. But if I want to show them something online, we have to sit through an advertisement no matter what. And we know that somebody somewhere is collecting all this information about where we have placed our eyeballs. It’s the attention span that the companies that sell us things really want to colonize, it’s the attention span which is very fleeting and it can be critical, and they really want to get in there. I was reading something today about the SXSW music festival in Austin [Texas], that it was founded as, and still is to some degree, an indie music festival. But bit by bit corporations that sell consumer goods — not just music corporations, and in fact now it’s not even music corporations, it’s other corporations, that have bought the performers’ bodies to some degree — pay for their performances and that traps us as viewers and as fans, as consumers of the entertainment. So in the Times, the media critic David Carr wrote his column about Lady Gaga, whose appearance at SXSW was sponsored by Doritos, so she was plugging Doritos! And then he said what was really devastating to him maybe a few years ago was that Public Enemy, the rap group whom he had idolized in his youth, were also supported by Doritos, and they were performing in a stage set made up to look like a Doritos vending machine! So it’s not just simply that “oh, Performer X has sold out,” it’s that our eyeballs are being colonized. And presumably that’s what every country wants to catch up with. I think that technology has been really devastating for autonomy, again not just the autonomy of consumers but also of persons and personhood and people who grow up with this just aren’t aware of it.

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So does this go hand in hand with the issue of larger consumption spaces — such as he mall — versus smaller ones. Are we continuing along a trajectory that will ultimately mean the death of the local shop or Main Street? That’s for sure, certainly among young people who really don’t care about going to a small store or talking to the store owner. I actually think it was a Russian Sociologist who wrote a paper that I accepted for a conference recently, and she talked about buying branded products as a sign of global citizenship, and that’s what younger people think about, maybe older people care about that too, but especially younger people care about wearing the signs and possessing the signs of global citizenship in the consumer realm. So the malls, which lot of people criticized for decades as anonymous, standardized spaces, they can be seen now, sometimes, as more or less humanized spaces. I went to several shopping malls in Bangkok to see what they were like and they have huge, huge, huge indoor urban shopping malls. I mean, in New York we are blissfully immune to those kinds of spaces, we do have a couple: Trump Tower on 5th Avenue, and Manhattan Mall, and in Brooklyn there are a couple of malls, but mainly we don’t have them. In Bangkok, in the exact centre of the symbolic and maybe even the geographic centre of Bangkok, in a place called Siam Square, there isn’t any square, they’re all malls! There are like three or four gigantic, gigantesque suburban-sized malls there. So by contrast, if you go into what was the first luxury mall in Bangkok which is some distance away from that centre — I can’t remember when it opened, I think in the 1960’s but it’s been refurbished and it’s certainly modern-looking — that mall is so much smaller that it looks positively humanized next to these giant malls! There were probably some more Thai brands in this older mall. I did see people shopping in it, but maybe it’s much less popular with young people for sure than the real glitzy malls which have added more thousands of square feet and more entertainment spaces to keep people shopping in the mall, all day and all night. Indoor malls, especially in hot countries, hot and cold countries, have become the new public space, not necessary urban but the new public space. When I was in South Africa for the ISA [International Sociological Association] meetings in 2005, I could see that the centres of the cities were given up to black Africans and in the malls which were on the periphery there was everybody, black Africans, mixed race people, white Africans, everybody was shopping and the malls were crowded and there were fewer crowds in the centre of cities. And the centres of cities were to some degree perceived as and were dangerous.

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In closing, I’d like to ask you what you think the future holds as far as retail is concerned. Is it moving toward post-consumerism?

“Shopping is a search for truth and beauty”

Oh no, no, no I would never use that term, post-consumerist. I mean, there are many people who consume their way to righteousness, right? They consume the eco-correct things, but they consume them nonetheless and simplicity has inspired magazines and websites. So, I like the idea, certainly for environmental reasons, of consuming less or consuming more simply, but there is so much cultural work that would have to be done to change people’s minds, and a lot of government regulation that would outlaw certain kinds of consumption. I’m a great believer in the efficacy of laws and penalties for sanctioning certain kinds of production and consumption. There’s no way that all people are voluntarily going to give up consuming. I’m not saying that people overconsume. I mean I wrote a whole book about shopping where I said that shopping is a search for truth and beauty and perfection, and I do believe that. But whatever the reasons for shopping are, people are not going to give that up unless there’s just some vast legal clampdown on production and consumption. I would think that with climate change, this might happen, but I don’t know. But I don’t know which government will be the first to take those steps. I would hope that humans come to their senses. Climate change is devastating. But I fear in general that everybody will just copy what everybody else has done around the world and find more ways to sell more things to more people. ♦

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T O W A A R U S A U T O N If Russia moved towards a historical phase of cultural and economic isolation, what consequences would this have on the urban routines of retail? To be fully realized, the autonomy of Russia should be put in place on different levels, with the improvement of domestic logistics performances being as critical as the possibility for State control of Internet, now deemed as a source of Western interference. At the crossing of these two poles you can find e-commerce, arguably to become the leading form of retail in the next decade. Welcome to Moscow in 2064.

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R D S S I A N O M Y Daniele Belleri

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“Amazon has no chance in Russia” Dmitry Kostygin

Since the beginning of 2014, in the aftermath of the Ukrainian and Crimean crisis, the calls of Russian authorities for a significant detachment of the country from the West, both from economic and cultural points of view, have become more and more frequent. Forecasting the result of such a rapidly evolving situation is not easy. However, in the context of research on urban routines, we now feel the urge to investigate the possible consequences of a scenario of patriotic isolationism. The question is how a cultural and economic configuration of this kind would affect the retail sector, one of Russia’s main points of contact with the rest of the world? It is a major issue that goes back to the course of global history in the last twenty years. Has Russia had enough of international retail in the past two decades, so much

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so that now it feels it must get rid of it, unless it wants to lose its national identity? In this chapter I will describe the current conditions of the national retail landscape, measuring how much Russia is currently integrated within the globalized economy as well as how this process has shaped the retail scene until now. In fact, the governmental claims of Russian independence tend to appear contradictory, or even schizophrenic, being a consumer culture with a retail sector in which both private companies and customers are positively accustomed to relating with foreign brands (and their corresponding values). At the same time, the vast popular consensus on patriotic stances, as well as the indisputable power of government actions in the context of Russia’s peculiar “State capitalism”, compel us to advance hypotheses on what the new

Photo by Evgeny Dudin / Kommersant

Ulmart CEO

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reality might look like. What sectors of the retail sphere might be at the forefront of the attempt to establish the new order of “Russian autonomy”? The great energies that the Kremlin is dedicating to tackle the issue of the alleged foreign influence exercised throughout the Internet are a valid reason to look more closely, in the next chapter, on that field of commerce in which the online and the offline dimensions overlap. The huge plans of logistical expansions that Russia is undertaking might play a critical role here. Indeed, they may contribute to fill that shortage of infrastructure that until now has prevented any bid to realize an effective autonomy of the country. Does the web really make us freer? And what effect will e-retail, arguably to become the most important commercial activity of the next 50 years, have on the everyday life of this nation and its cities?

Why So Schizophrenic? “Schizophrenia — a long-term mental disorder of a type involving a breakdown in the relation between thought, emotion, and behaviour, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation. (In general use) a mentality or approach characterized by inconsistent or contradictory elements.” Source: Oxford Dictionary online

For the opening ceremony of the 2008’s Beijing Olympics, an unforgettable show was conducted. It was a colourful, joyful display of choreography, dance, and costumes, referring to the best of Chinese art traditions, set in the Herzog & De Meuron’s brand-new National Stadium. Yet despite the lights, the cheerful music, and the prodigious singing children, it was difficult, even for the most naive Western spectator, not to perceive something ominous beyond such a stunning visual performance. It was, of course, the intentional message of a country finally coming back to the centre of the global game, after decades and decades of humiliation. It was, as it often happens at the Olympics, a political warning disguised as a celebration of sport. This thought suddenly struck me almost six years later, when on the day of the Sochi Winter Games’ inauguration I saw the Red Army Choir suddenly appearing on stage and singing Get Lucky, Daft Punk’s most successful dance hit. It was of course not the first time

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that the Choir was undertaking the challenge of Western pop songs; there’s a plenty of video evidence on the web. But in that moment, the clash between the severity of the uniforms and the tomfoolery of the tune, plus the evident discomfort of many officials, all spoke to a desperate clumsiness. And it pointed foremost to an unbelievable contradiction. Just a couple of months before, the Russian President addressed the Parliament referring to the renewed international ambition of Russia as a defender of “traditional values” such as nuclear families and religious beliefs, against the secularism and looser moral regulations of the West. And now, what happened? After that manly speech, in such a circumstance of immense political resonance like the opening ceremony of the Olympic Games, the members of one of the main military forces of the country were singing falsetto in English. That was schizophrenic behaviour.

Let’s Talk About Retail

Whether we want to consider the music industry as part of the retail world or not, it’s not hard to see how the Sochi paradox is the expression of a conflict — in a nutshell, between Russia’s traditional culture and Globalization values — that is omnipresent in the urban routines’ world. Since Russia has remained artificially separated from the West’s economic development during the majority of the 20th century, its adoption of the capitalist standards in the last 25 years has shattered the pre-existing ideas, customs, and social behaviours of the population. Yet the process of westernization is not proceeding in a linear way. On the one hand, the national economy is primarily based on the exports of natural resources, with the consumer goods industry still underdeveloped, and so Russian consumers find themselves particularly exposed to foreign goods in almost every category of retail. The proportion of imports in the retail trade amount to a 44% share. Sometimes, foreign goods also occupy the most prestigious positions in the pyramid values, e.g. in sectors such as clothes, furniture, and durable goods, thus resulting in some Russian companies choosing to mimic the styles of those brands to gain larger attention in the domestic market. The whole phenomenon is fostered by Russia’s progressive embracement of economic, juridical international standards, epitomized by the country’s admission in the World Trade Organization, which finally happened in 2012, after 18 years of talks. › continues at page 343

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In the screenshots, the Red Army Choir sings Daft Punk’s hit“Get Lucky” during the Sochi Olympics inauguration ceremony, in a performance seen by hundreds of millions of people worldwide.

C u l t u r e — the ideas, customs, and social behaviour of a particular people or society. G l o b a l i z a t i o n — the process by which businesses or other organizations develop international influence or start operating on an international scale. Source: Oxford dictionary. The schizophrenia of the Russian retail world lies somewhere in the space between the definitions of globalization and of culture — and on the difficulty in putting them in dialogue with each other. Indeed, how do you relate an essentially economic process with a cultural, less tangible concept? There are two shortcuts that I will alternatively apply from now on. The first shortcut is to consider globalization in its cultural implications (after all, can’t we talk of capitalism as a “moral order” with James Q. Wilson?), and therefore imply the exist-

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ence of some sort of “Global Identity” that might stem from the economic, social, and political configuration of leading capitalist countries such as the United States, Germany, and the United Kingdom, or even France, Italy, and Canada. A quick attempt to name the defining features of such a “global culture” might result in a list including one or more of the following traits: free market, democracy, individualism, sexual freedom, secularism, cosmopolitism, moral relativism, or antiauthoritarianism. The second shortcut works the other way round, and it focuses on how “Russian culture” may affect the business environment of the country. Such a cut-off can be proposed given the peculiar structure of Russian economy, which is built around a few big corporations, operating mainly in the energy and financial sectors, whose leaders are personally close to the political elites of the coun-

try. A crucial factor is also the very configuration of Russian society, in which those “intermediate bodies” widely praised as a guarantee of democracy by philosophers such as Alexis de Tocqueville and Hannah Arendt have been historically limited in diffusion and weak in influence. In the dialectic battle to define what the culture of a nation is, these latter entities (such as political parties, unions, small businesses, non-profit organisations, and cultural and religious groups) usually play an important role in the West. But whenever they start to recede, the “official culture” promoted by the State’s competent organs becomes more pervasive. That’s why the straightforward, ultra-confident version of the “Russian identity” promoted by the government and by the presidency is here taken into particular consideration, regardless of its effective correspondence with reality.

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W H O D E F E N D S R U S S I A N VA L U E S ? UK

Russia

Italy

How does one retail company relate to markets with different values? In the images above, three different Ikea ads are presented, mirroring different versions of the universal concept of the family. In the frames taken from a TV advert aired in the UK, a kitchen space is located on a quickly rotating platform. This is the metaphorical space in which a father and a mother seamlessly exchange their roles: cooking, buying groceries, caring for the children. That’s quite a different scenario from the Russian ads. At a summer lunch in the countryside, a whole family is religiously listening to the grandfather’s memories, while the grandmother is in the kitchen, cooking alone. Finally, in the poster conceived for the Italian market, a male couple is entering an Ikea store hand in hand. “We are open to all families”, reads this ad, that in 2013 caused some polemics in a national context still reluctant to acknowledge civil rights for gay people.

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A RUSSIAN EXCEPTION...

“ A N O T H E R S E R I O U S C H A L L E N G E T O R U S S I A’ S I D E N T I T Y I S L I N K E D T O E V E N T S TA K I N G P L A C E I N T H E W O R L D . [ . . . ] W E C A N S E E H O W M A N Y O F T H E E U R O - AT L A N T I C C O U N T R I E S A R E A C T U A L LY R E J E C T I N G T H E I R R O O T S , I N C L U D I N G T H E C H R I S T I A N VA L U E S T H AT C O N S T I T U T E T H E B A S I S O F W E S T E R N C I V I L I S AT I O N . T H E Y A R E D E N Y I N G M O R A L P R I N C I P L E S A N D A L L T R A D I T I O NA L I D E N T I T I E S : N AT I O N A L , C U L T U R A L , R E L I G I O U S A N D E V E N S E X U A L . W E H AV E L E F T B E H I N D S O V I E T I D E O L O G Y, A N D T H E R E W I L L B E N O R E T U R N . P R O P O N E N T S O F F U N D A M E N TA L CO N S E R VAT I S M W H O I D E A L I S E P R E - 1 9 1 7 R U S S I A S E E M T O B E S I M I L A R LY FA R F R O M R E A L I T Y , A S A R E S U P P O R T E R S OF AN EXTREME, WESTERN-STYLE LIBERALISM. I T I S E V I D E N T T H AT I T I S I M P O S S I B L E T O M O V E F O R WA R D W I T H O U T S P I R I T U A L , C U LT U R A L A N D N A T I O N A L S E L F D E T E R M I N A T I O N . [ . . . ] P R A C T I C E H A S S H O W N T H AT A N E W N AT I O N A L I D E A D O E S N O T S I M P LY A P P E A R , N O R D O E S IT DEVELOP ACCORDING TO MARKET RULES”

Vladimir Putin Speech at the Valdai International Discussion Club 20 September 2013

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...OR A WESTERNIZED RUSSIA?

The Washington Consensus in Moscow

Stabilize, privatize, liberalize, globalize, and balance the books. The set of policies that John Williamson grouped under the label of “Washington Consensus” is a useful reference to understand how Russia, since 1991, has carried out the complex path of integration within the international economic scenario. Important results have been accomplished in the past five years, the most notable being the accession of the Federation to the WTO in 2012. However, one may wonder: can this path of Westernization, once started, ever be interrupted through political decisions?

From 120th in 2011 to 20th in 2018

Russian priorities to 2018

20th

Improving the investment climate

Russian authorities intend to dramatically raise Russia’s position in the World Bank’s Doing Business ranking

Integrating with the global economy Increasing transparency in the economy Developing infrastructure

92th 120th

Education 2011

2018

2014

Healthcare

ew friends

International organisations or agreements joined by Russia World Trade Organisation International Bank for Reconstruction and Development (as lender) Paris Club Partnership and Co-operation Agreement (PCA) with European Union

Russia enters in WTO in July 2012 after 18 years of talks. The World Bank believes that WTO accession will add up to 11% to the country’s GDP in one decade

International Organisation for Standardisation International Monetary Fund European Bank for Reconstruction and Development World Customs Organisation 1991 1994 1997

The scent of WTO

2009 2012

Let’s privatize! According to a privatisation program adopted in June 2012, the Russian government will fully or partially divesting its share in the following companies:

Source for all the infographics: PwC 2013’s “Doing Business and investing in the Russian Federation” E N O U G H

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More Malls: More West?

On the other hand, to use with the definitions of the political scientist Andrei P. Tsygankov, the historical division of Russian rulers into the two opposite categories of “Westernizers” (those who claim the quintessentially European nature of Russia, and therefore promote Russia’s integration with the West) and “Civilizationists” (or Eurasianists: those who claim the peculiarly separate identity of Russia, strongly rejecting the influence of Europe) has become again a valid tool for observing the recent changes in how Moscow regards its neighbours. Indeed, from 2012 on, an increase of tensions with the United Stated and the European Union, on issues such as the enlargement of NATO’s area of influence, sexual minorities’ civil rights, and the disputed state of the democracy in the largest nation on the planet, has widened the gap between Russia and the developed countries. The President, Vladimir Putin, long regarded as a pragmatic patriot, willing to build good and stable

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Less Kiosks: Less Russia?

relationships with the West, is now shifting to a more identitarian choice. Speeches that cite an economic, moral, and cultural isolation as a necessity to protect Russia from external contamination and to resist from foreign pressure have started to be heard more frequently in the palaces of power, especially after the annexation of Crimea in March 2014 and the consequent economic, diplomatic sanctions inflicted on Moscow by a US-led international coalition. A few weeks after those events, in the annual Government performance report in front of the State Duma, the Prime Minister, Dmitry Medvedev, hinted at some “adjustments” in the national development approach: “In response to artificial restrictions to economic ties, we will use additional incentives to reduce dependency on imports. Moreover, we have ambitious goals in certain sectors: to fully meet demand with domestic production”. Putin has well explained how “the question of finding

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Where Do You Come from, Baby? “French wine, German cars, Japanese robots, Columbian coffee, Italian fashion, Singaporean efficiency, Belgian chocolate. Somewhere in our minds, these products and services are associated with particular countries owing to their legacy or culture or lifestyle, which automatically leads us to perceive them as ‘premium’.” Source: The Economist Going Global

Not only businesses are making the most out of the “Country of origin factor”. Nations, too, have been progressively forced to cope with it. No matter if sincere, specious or even made-up, the association between a product and a precise geography has become so common and strong that also the reverse mechanism has been put in operation. A group of experts worldwide is arguing that the best way for ailing national economies to preserve some hope in the future is to find their particular niche on the brand ring, and to concentrate their productive efforts there. Of course, this very concept may find some legitimation within David Ricardo’s renowned law of the comparative advantages. Yet, the idea of national branding — so appreciated by politicians and the editors of influential glossy magazines — presents a slightly different flavour, related more to cultural stereotypes than not to variables of profit. Not all corporations are able to affect the reputation of a country in the same way. Even though the financial and energy sectors play a crucial role in sustaining the Russian economy, their impact is almost non-existent on a brand scale. No matter how much we strive to define the contributions of Gazprom to the idea of Russianand strengthening national identity is [. . .] fundamental ness — or to say it like Putin, to the features of the Rusfor Russia”. It’s a cultural battle that entails a critical sian civilization, it appears evident how smaller firms like analysis of the world’s dominant economic paradigm: Burberry, Ferrari, or Hermès have a bigger stake in the “Practice has shown that a new national idea does not discussions on what Britishness, Italianness, or Frenchdevelop according to market rules”, the Russian presiness may be about. Indeed, if you needed to provide the dent said in September 2013, in a conversation at the name of a single economic force that can determine what Valdai International Discussion Club, and he also warned against the idea of “mechanically copying other countries’ people ultimately think about a country, including how much you are willing to purchase something coming from experiences”, dismissing the supporters of liberalism as there, you should probably say retail. “far from reality”. In this context, despite the magnitude of its natEven though the tensions between the business ural-resource-based economy, Russia is not creating reality and government-fuelled jingoism are not the much value through the retail sector. This is reflected new to the history of Russia, in the present day they in the kinds of brands that Russia is presenting to the have become more emphasized. To understand where world and to its own consumers. In the context of the this conflict might lead to, we need to take a closer look patriotic campaigns promoted by the nation’s highest at a series of specific retail sectors, in order to observe authorities, this inability to produce brand recognition that mix of top-down decisions, free market agents, and appears particularly inconvenient. consumer actions that is typical of urban routines.

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It’s a Brands’ World This infographic investigates how the kinds of goods and services that a nation is producing may affect the country’s reputation and identity in the context of a globalised economy. Each firm is numbered according to its origin as well as to its position within the Brandirectory 2014’s international ranking of the Top 500 Most Valuable Brands. Not unexpectedly, Russia’s main corporations come from the financial and energy sectors. In this list there is also a retail operator (Magnit) and a telcoms company (MTS). However, these firms are barely multinational, having their activities in Russia or CIS countries only. The issue is: Can these businesses really contribute to promote Russianness at an international level, not to say to define it or protect it?

3 12

34 brands (top: telco, banking, retail)

194 brands (top: hi-tech)

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USA

37 brands (top: banking, telco, insurance, cosmetic)

44 3

503 110

BRAZIL 220

112

121

230

284

177

5 brands (top: banking, energy)

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166

106

414

RUSSIA

SWEDEN

314

3 17

UK GERMANY

127

319 19

9 brands (top: insurance, telco, retail)

148

202

Source: Brandirectory.com, Global 500 2014, The Worldâ&#x20AC;&#x2122;s Most Valuable Brands

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JAPAN

5 brands (top: automotive)

2 SOUTH AFRICA

32 brands (top: telco, banking) KOREA CHINA

347

268

1 brand (telco)

406

INDIA

154

240

315

34 brands (top: telco, automotive, engineering)

ITALY

306

9 brands (top: banking, energy)

7 brands (top: retail, hi-tech)

FRANCE

129

381

413

474

12 brands (top: hi-tech, automotive)

139

241

40 brands (top: automotive, hi-tech)

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Oil for Breakfast

The visualization shows the percentages of different productive categories composing the aggregated Russian exports (above, dominated by mineral products and metals) and imports (bottom, in which you can see the presence of consumer goods such as textiles, animal products, foodstuffs, and vegetable products). In 2011, exports had a value of $506 billion, while imports totalled $310 billion. The European Union is the major trade partner of Russia and accounts for 49% of trade turnover, followed by APEC (Asia-Pacific Economic Cooperation) countries with 24%, of which 10.5% was with China only. CIS countries account for 14.1% of trade turnover.

Source: The Atlas of Economic Complexity atlas.media.mit.edu E N O U G H

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Food imports

India

.

Turkey



Brazil

China

.



.

South Africa Germany Japan

.

Italy

Saudi Arabia

Russia

.



Egypt

. .

.

.

Sauidi Russia

Food exports

It seems a paradox that a country that is the largest in the world, which is far from being overpopulated has a negative trade balance on agricultural products. Yet this is the situation in Russia. In 2010, food imports were valued $36.5 billion, while exports reached only $9.4 billion in value. Moscow is an exporter of low-value goods, such as crops, while it imports much more expensive products, such as meat and processed food (at the same time, Russia is also the world’s largest importer of apples, paying $600 million per year for them). According to the Federal State Statistics Service, “Foodstuff and agricultural raw materials” imports comprised 16% of the aggregated national imports in 2010, while food exports covered only 2% of all national exports. In this regard, a striking resemblance can be noted with the food trade balance of Saudi Arabia, a nation in which food imports accounted for 15.7% of national imports, while food exports represented only 1.2% of the total (in 2010). Despite having been an agricultural power not so long ago, Russia is today comparable to a country eight times smaller and largely occupied by desert.

.

.

. . .



.

.

.

. .

Brazil

Egypt

Turkey

India

South Africa

Italy

Germany China

 Russia

. Saudi Arabia

. Japan

Source: Tradingeconomics.com, “The agri-food sector in Russia: Current situation and market outlook until 2025”, Joint Research Centre of the European Commission. Data refers to 2010 E N O U G H

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Market Pyramid of Textile Clothing & Accessories in Russia, 2012 (Total: €35,000 mn.) Luxury Luxury monobrand stires and multybrand boutiques

₷ 14,000

Italy

Premium ₷ 7,000,

Italy, France Germany, Switzerland

₷ 6900

Monobrands and multibrand specialty stores, department stores, shop-in-shops, independents

Upper medium

Italy, Germany, France, UK, Finland, Austria

₷ 3,000 ₷ 2,900

Domestic and international monobrand and multibrand retail chains, department stores, independents, distance retailers

Medium priced market

Russia, Spain, Sweden, Germany, Italy, Spain, France, Turkey, UK, Finland, USA, Poland

₷ 1,000 ₷ 900

Domestic monobrand retail chains and discounters

Low medium priced market (25% by value, 35% by volume) ₷ 500

Russia/China, Turkey, Belarus, Ukraine, Eastern EU

₷ 400

Open markets, TC’s

Low priced mass market (10% by value, 30% by volume) ₷ 200

China, Turkey, Russia, Central Asia

Source: European Fashion and Textile Export Council (EFTEC)

Wearing Russianness

The international mass apparel market is dominated by Western firms. A large number of them (such as H&M, Zara, Gap, Nike, Adidas, Levi’s, M&S, Victoria’s Secret, Polo Ralph Lauren) are popular not just in Northern America or Europe, but also in Asia, Latin America, and Africa, where they are present with flagship locations, or franchises. Populous countries such as Brazil, Indonesia, Malaysia, and China have developed their own brands, but still it is quite rare for a non-Western brand to become well-known in the other half of the world. Exceptions are represented primarily by the Japanese firms Muji and first and foremost, Uniqlo (right page, on the bottom), whose strategic marketing point is to highlight their national traits. But what about Russia’s apparel companies? One of the most interesting case is probably that of Gloria Jeans, a young brand whose 22% net profit growth in 2013 has been higher than the performances of H&M (+10%), Inditex (+5%), and only slightly lower than the +26% obtained by Fast Retailing, the group which owns Uniqlo. The collection of Gloria Jeans presents no hints of its Russianness (right page, on the top), even though this very factor might represent an added value, especially in the context of the increasing fascination of the West for Soviet aesthetics. Notably, this is already happening in the high-end market. To find similar proud references to the national past, the works of fashion designers such as Denis Simachev, Helen Yarmak, or Valentin Yudashkin may be considered.

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Japan

Russia

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Kalle Lasn

FI G H T I N G C A P I TA L I S M WI T H S M A L L- S C A L E RE TA I L Interview by Daniele Belleri

Kalle Lasns is a difficult charac-

ter to converse with, not because he is reluctant to talk. On the contrary, he is eager to speak. The problem is that, from the set of interviews he has made in the past, either prior to 2011, in his role as the founder of the “anti-consumerist magazine” par excellence, Adbusters, or after 2011, as the acclaimed putative father of the Occupy Movement, Lasn has customarily performed essentially two kinds of interviews only, both belonging to the fairly uninteresting genre of propagandistic expression. In the first, the person holding the recorder is an ardent follower of the old hero of the Left. In the second, the interviewer wants to demonstrate that Lasn is an insane, bizarre extremist, aiming to have Lasn react with loud, bitter sarcasm. In both cases, a flat version of his character comes out. No trace is left of the complex biography of this energetic, foreboding, yet cheerful, activist. As he was born in the Estonia of 1942, Lasn has closely known

communism, being then able for the rest of his life to steer clear from the Marxist-Leninist orthodoxy. Despite being heavily critical of capitalism, he is well aware of its mechanisms, and for many years worked for international companies. Indeed, after a childhood spent in Australia, he moved to Japan in the late 1960s, and he established there his own market research firm. He then moved to Canada in the 1970s, working as a video-maker. Since the late 1980s, he has organized some of the most notable initiatives against Western consumerist culture, including as “Buy Nothing Day” and “TV Turnoff week”. He is also a writer and a theorist: his concept of “culture jamming”, which promotes the hijacking of brand images and values, has been appropriated by artists and activists worldwide — just think of Banksy in the UK. He now lives in a farm in Aldergrove, sixty kilometres out of Vancouver. That’s the unlikely location from which, in the late summer of 2011, the hashtag

#occupywallstreet was launched, sparking off a series of protests in many countries worldwide. The following interview has been an attempt to create a “third way” to speak with Lasn by challenging him without prejudice. Above all, what I’ve tried to do has been to scratch the surface of his rhetoric style, trying to go beyond those propagandistic mottoes, soundbites, and obsessions ("With capitalism, people have lost their soul”, “We, the people”) that represent the dominant materials from many of his past dialogues with journalists. It’s not up to me to decide whether this has been a successful attempt or not. I just hope this text can show a version in which our protagonist looks (slightly) more open to shades of grey, doubts, contradictions, or unexpected references, such as the unlikely praise of the “individual entrepreneurial zeal” that holds a central place in Lasn’s ideal vision of urban routines.

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KALLE LASN

Your fight against consumerism culture took place in the West and resonated powerfully there. But if you had to start your activist campaigns in Russia right now, how would you act? The real challenge is how would you convince people to consume less, if they only recently started to experience a life without material deprivation? I don’t think there’s any way of dealing with that. You simply have to accept that. When Estonia became independent I went back there for the first time since I was a child, and I met people who, for the past sixty years, had had nothing, and were forced to live under severe deprivation. At that point, in the nineties, it was impossible for them not to desire to have a pair of branded jeans, or a car. Of course, I can remember myself: after WWII, when my family settled in Australia, all of a sudden we bought a house and we bought a car and we had wonderful Christmases. It was impossible to cut this impulse to consume, and to have all these wonderful things that you were deprived of previously. I think it is really impossible to do that with the first generation in a country. Yet, after that, it is possible to change culture. Therefore, in a nation like Russia, I guess it is finally possible to confront the fact that people in America, Canada, and Australia have actually lost something really valuable as they still live in the American dream. These people have been told that you can be happy if you buy, and they have already seen hundreds and thousands of colour shows and billboards and magazine ads as teenagers. By the time they reach adulthood, they are already living in a kind of false happiness. In a way, they are no longer 100% human beings. If you can point out this fact to people in Tallinn or in Moscow, I think that when the present youngsters grow up and have children, then they will take their country in some kind of a new direction. In your view, what forces can possibly slow or limit the influence of Western capitalism? If I think about Russia, I would argue that the strongest force of this kind is nationalism. What do you think about it? Would you prefer a nation to cultivate its own identity, whatever the consequences of this might be? One of the great experiences I had in my life was when, in my mid-twenties, I went to Japan and started a company there, and lived there for five years. Well, while making some television documentaries on Japan I had the occasion to see what happens to a nation that loses its identity. When I was in Japan in the early days after the 1960s, during the economic miracle, it was an incredible moment: This nation that was just recently defeated in a war were growing up in the most dynamic and fantastic way, to become the number two economy in the world. And yet, a few years after that, I started noticing that the dynamism wasn’t there anymore. The young people who were growing up in post-war Japan seemed to be very ambivalent. They had one foot in Western culture and one foot in the old

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traditional Japanese culture. And they didn’t know where they were standing anymore. All of a sudden they became weak. Their “Samurai spirit” was somehow lost. So my feeling now, looking back at that, is that it was a big, big, big mistake for Japan to embrace so wholeheartedly the American dream. And now, for many generations in the future, they will have to pay a price for that. So it doesn’t matter if embracing nationalism may have consequences in terms of militarist or imperialist actions, as we have been seeing in Russia in the first months of 2014? What I’m saying is: don’t choose someone else’s identity. Keep as much as possible of your history and your national identity and try to fix the flaws within the latter. I love Russian culture; of course you made some big mistakes too, but keep your roots somehow, and try to fix the blemishes. And if you do that, if you continue to have this very deep pride in your own culture, then in the next ten, twenty, or fifty years you will have a chance of succeeding. If you wholeheartedly embrace the American dream, like the Japanese did and like the Chinese are doing now, then you are maybe killing your soul in a way that is very hard to repair. Does this also apply to you personally? In your personal resistance against capitalism, do you feel you belong to any kind of national culture, which has played a role in protecting you from capitalism?

“Don't embrace the American dream so wholeheartedly. Keep as much as possible of your national identity. Of course, Russia made some big mistakes too. But keep your roots somehow, and try to fix the blemishes”

I think that with a few exceptions, and maybe Russia is one of those, our national identity has been taken over by capitalism. So in this case the interesting thing that is happening is that a new kind of global identity is starting to form. Somebody like me in Vancouver or some friends in Istanbul or in Brazil: there are one hundred million young people around the world who feel that the future doesn’t compute, and they all believe in eating differently and living differently and starting businesses differently and trying to create new kinds of political parties in their place. So what we have? We have people like me who on the local level grow their own vegetables or don’t go to the supermarket too often. But globally I’m trying to make campaigns against the giant corporations. So it goes back to the old slogan: you act locally but you also act globally. I think this new global identity will be the big cultural force of the future.

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Let’s now talk about one of the most evident manifestations of capitalism in the physical space, retail. In the last two decades, a city like Moscow has been dramatically shaped by retail, not always in the most efficient and inclusive way. In your opinion, how should retail be disciplined in such a context? The first general consideration that must be done is that the current leading economic system and theory is flawed. That being said, how can you regulate retail? I think there are some very basic modes of tweaking the current system in order to let your culture develop in different ways. We are talking about long-term strategies. For example you can establish an ecological market; that is a market that tells the ecological truth about how products are made. This would represent a deep shift in the way you think about economics, and maybe in the next twenty years it allows you to have a completely kind of retail feeling in your country. Also, if you limit the power of some very, very large multinational, and if you do not allow these huge powerful firms to come to your country, and basically start to tell you what to do and how to run things, this might have a huge payoff. In this regard, I want to tell you another story from Japan. When I first went there, in 1965, every neighbourhood I went into was alive, full of vegetable stores and rice stores and cafés and drinking places, little drinking places in back alleys. It was an exuberant and exciting reality: It was just like living in a city really driven from the bottom-up. But as I went back to Tokyo, more and more, I saw those little grassroots entrepreneurial places slowly disappearing. Now they’ve been all replaced by supermarkets and by fast food chains, so that, in the end, the city has become really boring. So one thing that I would really advise people who are running places like Moscow is to tell them: come up with rules, come up with regulations that keep the big corporations out, and really try to enhance the bottom-up, little stores that give vibrancy to your city. You just described localism as a possible strategy for your fight. Now I would like to know what you think about other phenomena emerging in the last years in the retail world, such as the Slow Food movement, the sharing economy, or the de-growth theories. Do you recognize the emergence of trends telling people to consume more consciously? If many people are well aware of the flaws of the all-consumption model, are we already in a post-consumerist world? Honestly I don't think that consuming more consciously is the solution to the problem. Of course, it helps, and I am not against it. But the solution on long run is another one. Let's take a look at what's happening in America with a huge corporation like Walmart. When Walmart is trying to open up a big store in your city or in your neighbourhood, you have to decide: are you going to let Walmart come in and do this? This, of course, will kill a lot of the little stores.

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“Come up with rules, come up with regulations that keep the big corporations out, and really try to enhance the bottom-up, little stores that give exuberance to your city”

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Many people and economists reply, “Walmart is cheap, now's a hard time for everybody, and Walmart gives you the cheapest price, so let's definitely go there”. But there is also another side. Actually that cheap price of goods coming from China does not reflect their true cost; if we measure the cost of replacing those little stores with one big store, we figure out that the neighbourhood and the people living there in the end will suffer more — because the economic vibrancy of their place actually diminishes. That is to say: What is the true cost of allowing a Walmart to come into your neighbourhood? Let's measure it: what does it really mean for families and individuals, and for the entrepreneurial zeal of the people living there? What I'm trying to tell you is that we have to look down into the theoretical foundations of economic science. We have to look at how the new-classical paradigm that is taught at the university: these foundations are actually wrong. We have to come up with a new breed of economists who think about the economy in a different way. And once we change, and we shift the theoretical foundation of economic science, then we will find out that we will make better decisions, and we will keep the mega corporations out.

I know you live in a farm, not in a city. And when you talk about consumerism, you are somehow referring to a very urban-and-suburban mode of development that emerged in the late 20th century first in the US and later in Western Europe. Do you think that the best way to discard the capitalistic system is to abandon the city, or can you keep the urban form? Well, for historical and demographic reasons I don't think it is possible for most people to live in the way that I do, in my five acres, fifty kilometres away from the city. At the same time, I noticed that the young people working here at Adbusters, who are all city dwellers, have come up with some kind of interesting hybrid lifestyle, where they are recycling their compost, and they are growing their tomatoes on their balconies, and hopping on their bicycles in the weekend and going outside of the cities and starting an active relationship with nature, or with farmers. And I think this will escalate over the next few years because I don't think that human beings are meant to be completely cut out of nature. This element is part of the new dream that is developing: a dream that is alternative to the American one, even though we still don't know its exact form.

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Let's shift topics now. I would like to ask you something about how you have been using the Internet as a crucial element for your campaigns. Of course the Occupy movement has been a very powerful case. Yet the web space appears to be increasingly appropriated by retail companies, both in terms of advertising and in terms of using the vocabulary of Internet communities for commercial purposes. Is the Internet becoming the strongest tool for promoting consumerism and retail? I think the technological breakthrough has changed the whole dynamics between protest as activism and political structure. In Russia, China, or in some African countries, the governments are really scared of young people using Twitter and Facebook, or making flash mobs in malls, like it happened in Brazil. By the moment we are simply mesmerized by the fact that we can gather thousands of people to protest into a park, and we think this is fantastic and we are all hypnotized by that. And yet, these uprising means less and less, since we are struggling to create a follow-up. Create a swarm is one thing: but then how you continue, how do you actually use that swarm, how do you actually make a demand to the government and push that demand through? We haven't figured that out yet. On the role of the corporations in this context... If I look back at the history of communication, then, the corporation has always done that. They took over the television and turned it into a mass advertising tool, and they took over the magazines and turned it into an advertising medium, but nonetheless we can still use television for exploding mind-bombs and we can still come up with magazines like Adbusters that try to catalyse the revolution. So I think there's not anything new about that. I think we simply haven't quite learned yet how to use the potential of the Internet, and respond to the corporations. Do you consider yourself an optimist? Well, I must admit, I’m not as optimistic as I used to be. I think we have to fight. We have to go down and lose, we have to go down and fight again. This is the human spirit: to fight for something that you believe in. At the moment, this sort of bubble economy we have, the kind of economics professors we have, the kind of mega corporations we have, they make up a power structure that is still omnipotent and incredibly powerful. I have a funny feeling that for our side to eventually win, to have a sort of shifting of the paradigm, and of the way the world works, we would need some kind of 1929 moment when the global economy really will collapse. Not just in the way it did in 2008, when we had a really dangerous moment but then we came out of it and now, hallelujah!, we seem to be on demand again. We need to have a real global crush: something that will last for many years and that will scare the shit out of everybody. I think we need that kind of a crush before we wake up and start winning. ♦

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Logistical Pains “In postindustrial economies, we no longer produce but buy. We buy, so we must ship. Without shipping there would be no clothes, food, paper, or fuel.” George, Rose. Deep Sea and Foreign Going, Inside Shipping, the Invisible Industry that Brings You 90% of Everything. Portobello, 2013 “В России две беды — дураки и дороги” “In Russia, there are two misfortunes — fools and roads” Apocryphal (sometimes attributed to Aleksander Nikolayevich Radishchev)

One of the most intriguing definitions of logistics, as given by Cabinet magazine editor-in-chief Graham Burnett, presents it as “the formal science of spatio-temporal optimization”. This statement, of course, sounds fairly general, but if we translate it onto some specific conditions, namely one place and one time, we see it becoming an original frame in which to read the given conditions of a certain country, at a certain moment in history. What do logistics tell us about Russia in 2014? Sadly, it puts the country in an unfavourable position. The Russian Federation not only has one of the smallest logistics market of all the BRICS countries (with $49 billion in 2009, it is one tenth of China’s, one third of Brazil’s and as big as South Africa’s logistics market). It also has a less efficient system, at least looking at its position in the World Bank 2014’s Logistic Performance Index, 90th. The overall impact of logistical costs is particularly high, exceeding 20% of Russia’s GDP, a figure higher than in relatively large countries such as China (18%), Brazil and India (9.4%), and in the US (as reported by the RosBusinessConsulting group). Clearly, as the world’s biggest country, spanning 11 time zones, and facing three oceans and two seas, Russia is not your typical country. Yet many different factors contribute to such a poor result, not all coming from natural conditions. A 2012 DHL report indicates a shortage of quality infrastructure as well as a series of dysfunctional elements in the daily business of the market; bureaucratic hurdles (customs clearance is probably the single biggest obstacle), a lack of competition, insufficient transparency, and limited logistics know-how. At the same time, logistics remain crucial for a country heavily reliant on foreign trade, whose ambitions, in light of the prospect of further integration with the rest

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Who Makes Logistics Better?

1. Germany 2. Netherlands 4.04 3. Belgium 3.92 9. United States 3.53 28. China 3.43 34. South Africa 54. India 3.08 2.98 61. Ukraine 2.69 89. Sri Lanka 2.69 90. Russian Federation 2.68 91. Uruguay 2.07 158. Afghanistan 1.88 159. Congo 1.77 160. Somalia 4.12

4.05

Source: World Bank’s 2014 Logistics Performance Index

of the world, are also to link Europe with emerging Asian powers. In this context, the main national focus revolves around the movements of natural resources to be exported. However, this is also critical for consumer goods, especially during import flows.

Future Routes

Much has changed in Russia’s logistics system in the past ten years. Large privatization initiatives have overhauled a sector once monopolized by a state company. In fact, since the national road density is inadequate (averaging about 40 metres of road per square kilometre), more than 80% of all freight movement within the country is done by rail— a quite exceptional situation compared with the air-road-and-water based transport industries of the developed nations. In this sense, Russia is still relying on infrastructures constructed during the Soviet times: a network of 85,000 kilometres, compared with America’s 225,000 kilometres and China’s 100,000

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kilometres. Ports are also becoming increasingly important. Due to progressive changes in world climatic conditions, the Arctic Ocean is now far more accessible for navigation than it used to be a few decades ago. This could represent a dramatic shift in the shipping industry, sensibly shortening the time of delivery of products between the leading harbours of Northern Europe, China, and the United States. In the last years, Russian authorities have approved many projects of infrastructural expansion. On the one hand, this addresses those ports still held under Moscow’s control (when Ukraine and the Baltic states gained independence, many formerly domestic harbours became foreign overnight), with the establishment of about 20 special economic zones around them to boost growth and investments. On the other hand, it deals with congested railways. A 14-trillion ruble, 20-year plan of development was launched in 2008 by Russian Railways. The preliminary phase of the modernisation of the company’s existing structures is set to finish in 2015. The construction of up to 20,000 kilometres of new track will start after the modernisation programme is finished. On an international level, the objective here is to “create a logistical network that will allow “through” [sic] freight services between Europe and Asia”, not to mention the “development of a north-south international corridor as an alternative to the sea route linking Europe with the Persian Gulf and Indian Ocean”. This ambitious project is sometimes referred to as the New Silk Road. In general, the localization of the main hubs for the retail market follows the Federation’s list of urban agglomerations, with Moscow and Saint Petersburg leading followed by Novosibirsk and Yekaterinburg. Yet smaller centres such as Irkutsk (not far from the Chinese city of Manzhouli, which bears 60% of trade traffic between the two countries), Vladivostok, Murmansk, Kaliningrad, and Novorossiysk (the major port in the south) also play a primary position in international trade flows towards China, Korea, Europe, and the Middle East.

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Silk Roads and Arctic Thaws Where logistics meet geopolitics

Source: www.bit.ly/RhV9tj

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Despite an Internet penetration rate (53%) significantly lower than in the West, Russia is already the biggest online market of Europe, with more than 76 million users logging in in 2012. At the same time, the e-commerce sector is still in its infancy. In 2013, only 2% of the Russian retail sales as a whole were made online, compared to the UK’s 10.7%, Germany’s 6.6% and Spain’s 3%. Sources: Data.un.org, Data Insight

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“Dear subscriber, Access to the site is blocked by content-filtering system. You can report about incorrect resource categorization.”

In the future, messages of this kind might appear with increasing frequency on the screens of Russian computers and mobiles. In the first months of 2014, the national censorship system has been reinforced through a series of measures whose final objective is to put the web under governmental control. At the beginning of February, a law has been implemented, which gives the federal communications regulator, Roskomnadzor, the power to block, without a court ruling, websites deemed “extremist” or a threat to public order. Following this, almost three months later, the Parliament has approved a regulation requiring Internet companies to locate servers handling Russian traffic inside the country, and to store user data locally for six months. This very law also states that any blog with more than 3,000 daily visits must be considered a media outlet, and is therefore subject to tighter controls and tougher sanctions in case of offense.

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Online Trade and Foreign Enemies “The integration of the world economy depends less on call centres and trans-Pacific exports of technical services than on the ability to move goods cheaply from here to there” Levinson, Marc. The box: how the shipping container made the world smaller and the world economy bigger. Princeton University Press, 2008

The link between logistics and retail is not just strong, but also one of the more stimulating areas of research in urban studies. For a long time, logistics has received little consideration — we know very little about the opaque yet economically important sea shipping industry. If in the past few years the subject has garnered attention, it is because of a handful of companies emerging and becoming powerful in the last decade. These firms — the most famous case certainly being Amazon — employ logistics on an unprecedented scale, both in terms of geographical extent and of management precision. Their activities are shattering both the way we shop and the way we think about the spaces of our metropolis. Forward-looking scholars, such as the Chicago-based architect Clare Lyster, have argued that the “revolution of logistics” is challenging established urban certainties such as the principle of context in city-making, the primacy of the vertical dimension (the building) over the horizontal one (the flows of services) in the man-made environment, or the separation of architecture and landscape architecture. In any case, putting retail and logistics together means dealing with the Internet, and with the particular activities of online retail. In my view, this young sector represents a field in which the fight between official culture (the state defence of “traditional values”) and the business reality (the advancement of Russia’s integration within the global economy) can find a new dimension, and possibly unpredictable outcomes. In Russia, a country that features Europe’s largest reservoir of Internet users, the e-commerce market has seen an annual 26% revenue growth in 2013, according to estimates by Moscow’s Data Insight. Even if only about 2% of total retail sales are made through the web, this quota is expected to double and grow to 4.5% in 2015, still well below UK’s 10.7% in 2013, but closer to France’s 6%. The importance of e-tail is given for an elementary yet often forgotten reason. This sector involves the two

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battlefields on which the political actions of the Russian authorities are more focused: logistics, as described before, and the Internet. E-tail can touch on some very delicate points. Potentially, it not only allows any Russian consumer closer, independent relationships with non-Russian goods and values. It also approaches the ideal evolution of the capitalistic regime: a supranational, borderless market, where any product can be delivered literally anywhere, in a short time, at an infinitesimal price. Since 2012, the web has been at the core of the Kremlin’s actions aimed at protecting the Russian identity from the influence of the “forces of the West”. This latter expression is derived from a 2012 survey by the Levada Centre, whose purpose was to identify Russia’s supposed enemies in the opinion of the people. This was the result of the survey: United States (indicated by 56% of the respondents), Chechen militants (39%), NATO (35%), and Special political forces of the West (27%). I am focusing on this list, as all its protagonists can be easily meet again in the words of the Russian politicians describing the threats embodied by the net. Indeed, the virtual sphere has been depicted either as US-spy-ridden, lethal for youngsters, or infested by extremists and terrorists. On this basis, the national censorship system has been gradually reinforced through a series of measures whose final objective is to put the web under governmental control. At the beginning of February 2014, a law has been implemented which gives the federal communications regulator, Roskomnadzor, the power to block, without a court ruling, websites deemed a threat to public order. Following this, almost three months later, the Parliament approved a regulation requiring Internet companies to locate servers handling Russian traffic inside the country, and to store user data locally for six months. This very law also states that any blog with more than 3,000 daily visits must be considered a media outlet, therefore subject to tighter controls and tougher sanctions in case of offence. In December 2013, Putin referred to e-commerce in an explicit way, stating that the sector should be put “in order” with more taxes collected from it. Such a remark, quite understandable in the words of politicians of almost any country, is however included in the wider context of patriotism addressing foreign trade as a whole. As Mark Galeotti and Andrew S.Bowen wrote in Foreign Policy magazine: “Putin decried those who were

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Internet Penetration Rate, 2012 83%

France

84%

Germany Italy

58%

Russia Spain

53.27% 72% 87,02%

Source: data.un.org, author’s elaboration

It’s Oh So Russian

Share of Retail Sales Made Online on the National Total 10.7 %

Germany France Spain

Italy

6.6 % 6%

a proportion that is roughly reflected in the fact that 90% of revenue accrues to domestic firms. This may have many reasons, some of them related to logistics (the vagaries of customs clearance, the difficulties to get goods via Russian post), and some others ascribable to the language isolation of the Russian internet. However, maintaining this percentage may be advantageous for those who want to limit both Russia’s exposure to the West and its reliance on economic international ties.

Russia

Source: Data Insight

determined to steal and remove capital and who did not link their future to that of the country, the place where they earned their money.” A few weeks after this call for e-commerce regulation, a couple of events occurred. All of a sudden, the number of documents required for customs clearance increased, provoking protest and even a temporary stop of operations in Russia by foreign delivery companies such as DHL and UPS. Furthermore, a new proposal to impose higher taxes on foreign products bought online (a 30% duty on purchases higher than 150 Euros) has been raised. And after months of talks, the birth of a brand new, national credit card system, an alternative to Visa and Mastercard was announced in May of 2014. As a matter of fact, in an online retail market valued at about 10 billion Euros, only 1 billion is comprised of purchases of products coming from outside of Russia —

“In Russia you have to make more of an effort to create a great customer experience, because you don’t have something like DHL in the West” Niels Tonsen, Lamoda Chief Executive Officer

What has been described in the previous section are the actions of Russian authorities. But what is the situation in the e-tail market? That is to say, how are things moving in the other half of the schizophrenic Russian reality, the one more driven by business than by ideology? To answer this question, we need to return to the initial logistic themes. The Russian e-commerce sector has grown up dealing with the myriad constraints of its local context, and therefore it differs on many points from what you can find in the West. Amongst the issues that any operator has to cope with, the greatest challenge is definitely the following: How to deliver products around the country, given the unreliable national postal service and the essential lack of shipping services such as FedEx or UPS? It is a question that well precedes the renowned “last mile” issue. Rather, it addresses the notoriously poor conditions of the Federation’s roads, with a scattered population that prevents any economies of scale in different regions of the country, and with distances that are unthinkable almost elsewhere in the world. However, all of this concerns what happens inside Russia only. We have already seen how the government is determined to tackle these problems. In fact, an equally dreadful factor is not physical but rather bureaucratic,

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Russia’s E-tail Players, 2013’s Revenues (million dollars)

Ulmart Citilink Wildberries Ozon Biglion Holodilnik - 310 Technopoint Enter 220 Volt Utkonos KupiVip Pixel24 E96 Lamoda Vseinstumenti 1021

868 530 350 334 310 260 207 206 200 190 150 144 140 135

Source: Forbes Russia, Top-20 Russian Online Retailers, February 2014

and it is cross-border transactions. In the World Bank’s Logistic Performance Index, Russia’s score is particularly low, because the rating of the customs clearance processes is dragging down the arithmetic mean. The main consequences of these specific conditions are that you almost don’t find in Russia the usual, big players of online retail that dominate the game elsewhere. It is true that some of the leading domestic firms were founded by foreigners, or funded by investors coming from abroad. Nonetheless, they have been created specifically for the local market. On the side of the e-tail consumers, if a single word had to be found to define their attitude while browsing the web, it would be “mistrust”. It is a mistrust that is first directed towards forms of online payment, particularly the credit card. That’s why almost 70% of orders in 2012 were purchased as cash-on-delivery. But this diffidence also reaches the sector’s operators: how can you be sure that you haven’t been a victim of a scam, and that the product you ordered will arrive intact and well preserved

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to your place? That’s why the most successful players had to invent solutions to establish a positive relationships with their customers. I am now going to describe case studies of some of the most successful firms in e-tail in Russia. I am interested to highlight here three different aspects. One, what distribution solutions they have facilitated. Two, how they have been creating new business models in order both to overcome the hurdles of insufficient local logistics and to satisfy the demand of the market. Finally, I will take a look at how these actions are eventually intersecting with or responding to the government’s new actions on the Internet.

Meet My Fleet

Ozon is arguably the most famous online retailer in the country, and is sometimes referred to as “The Amazon of Russia”, for its ambition goal to deliver almost any kind of goods around the whole country (including service in Belarus and Kazakhstan). Brought to success under the lead of a Frenchwoman, Maelle Gavet, the CEO since 2010, Ozon has a catalogue of about two million products available for purchase. The logistical strategy of Ozon is based on a paradigm of differentiation. Firstly, whereas Amazon relies chiefly on the services of gigantic delivery companies such as FedEx and UPS, Ozon has established its own distribution branch, called O-courier, that also sells its services to other companies in Russia. Secondly, Ozon works in synergy with a plethora of subjects: local and international shipping companies, the national postal system, firms building automatized pick-up points (Logibox, Pickpoint), and networks of physical stores where the orders can be placed instead of from your computer or mobile. As a result, the majority of deliveries in Moscow (where foot couriers are also employed) happen within 24 hours of the order. For far-away cities, orders can take up to 20 days, but the average is about half that. Ozon owns the largest e-commerce logistics warehouse in Eastern Europe, strategically located in Tver, outside of Moscow, on the road to Saint Petersburg. Given Ozon’s objective to become “the biggest online player in Russia”, including services like ticket booking and hotel reservations, this location may become a testing

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ground for those theories that see distribution centres as a brand new, mighty engine for urbanization. About 80% of all Ozon sales come from cash payments at delivery. The company also has a call centre operating around the clock. Each customer receives an initial call as the order is placed, and a second one when the courier is about to arrive at his destination.

Please trust your sales assistant

In Russia, almost one third of all clothing purchases are conducted online, according to a study by the German research company yStats.com. Though the biggest revenue sources remain consumer electronics and household appliances, statistics show that in 2012, nearly one Russian online shopper out of two has purchased clothing, shoes or accessories. The field is dominated by few companies, with ten online firms accounting for almost 50% of all B2C e-commerce sales. Amongst the most popular websites there are Wildberries.ru, KupiVip.ru, and Lamoda.ru. The sector’s prospective growth has also attracted international investors, with Lamoda.ru receiving funding from JP Morgan and KupiVip considering launching an IPO on the Russian stock exchange. Wildberries, whose revenues in 2013 were 223 million Euros, offers free shipping throughout Russia, regardless of the value of the goods ordered. Delivery times can range from one day (for Moscow and St. Petersburg) to 12 days for remote locations. The company processes about 350,000 orders each month, and it has opened a hundred “try-on” stations around the country, in order to build a not-just-virtual relationship with customers. The possibility to try things for free extends also to the goods delivered from purchases made online. A similar policy is at the core of Lamoda’s commercial model. At the moment of the home delivery, each of Lamoda’s five million of customers is given some time to try his or her clothes on, and to decide whether to accept them or return them to the courier, with no fee in case of the latter decision. This, of course, has repercussions on the economics of logistics: it has been estimated that Lamoda is spending about 25% on transportation costs for each order smaller than 100 dollars. The firm is trying to limit these expenses by using its own 400 car distribution fleet. It is accordingly interesting how the very role of the courier is here officially upgraded to that of “sales assistant”, a definition that toys with the idea of a traveling boutique.

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Ulmart Doesn’t Want Imports

Among the many players of the crowded Russian e-tail market, Ulmart is probably the most interesting one. Surely the outspoken attitude of its main shareholder, Dmitry Kostygin, known for having declared to Bloomberg reporters that “Amazon has no chance in Russia”, has brought a lot of attention on the company. Yet this is not just about media frenzy. Focusing on appliances and consumer electronics, Ulmart has developed a retail model that is half way between the virtual and the physical world, demonstrating a capability to adapt to the challenges of local context in a fast and effective way. In 2013, its sales have exceeded 1 billion dollars, making Ulmart the major firm in the national e-commerce sphere, despite its catalogue consisting of “only” fifty-five thousand different products. The geographic policy of Ulmart is comprised of three main points. Firstly, the company is operating not in all of Russia, but in the European regions only, where a disproportionate share of the country’s population live. Secondly, Ulmart can provide home delivery service in a maximum of a few days (through a distribution fleet of its own, made up of about 200 trucks), but the preferred option is to use the company’s “fulfilment centres”. The fulfilment centres are a network of almost 300 small warehouses and pick-up stores located in urban areas, where specific goods can be purchased even without ordering online in advance. Thirdly, and more notably, in the same vein as Ulmart not delivering goods in those areas of the country where few people live, it is also trying to minimizing contact with Russian customs. “We are mainly selling products made in Russia”, Kostygin explained: “We are trying not to import anything, and to work with goods already present in Russia. Distributors or producers ship goods directly to our fulfilment centres.” With its realistic business approach, Ulmart has developed a model that encourages Russia’s independence, ideally pairing business conditions and governmental desires of a Russian autonomy. In the images, two maps comparing the locations of Amazon’s warehouses in Western Europe (each centre is 92,000 square meters) with those of Ulmart’s warehouse and outposts in Moscow (2,500 square meters and 100 square meters respectively). Ulmart also has three national hubs of about 12,000 square meters each. Below are some pictures of Ulmart’s pick-up points taken from Google Street View.

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“This is our invention: We have switched from exurban fulfillment centers to urban or sub-urban fulfillment centers, with carry-out areas too. It’s kind of a pizza delivery. And we do believe Amazon will switch into this model in a couple of years. That’s inevitable. You have to become a bipedal predator in retail. [...] Also, we are trying not to import anything. We are trying to get goods that are already in Russia” Dmitry Kostygin 26 February 2014

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“The distribution companies and online services are giving users a lot of choice. But at the same time they are controlling this choice. It is a top-down situation disguised as bottom-up. […] people are blinded by: ‘Oh my God, I have so much choice!’. But they do not really recognize the control that is required for such choice. It can be scary sometimes”

“Like the Russian government, which is currently using the Snowden disclosures to justify bringing global online platforms and services under Russian jurisdiction, many countries are beginning to support the concept of national sovereignty in cyberspace”

Clare Lyster

Andrei Soldatov

interview with Daniele Belleri, Slon Magazine, April 2014

Investigative journalist, March 2014

“The domestic industries, some of which are dependent on foreign supplies, will receive the necessary support from the Government” Dmitry Medvedev Prime Minister of Russia, 22 April 2014

Conclusion: Russia, 2064

Where is Russia heading to? Can the schizophrenia between political ideology and business reality be somehow reconciled? Until now, we have seen that many important retail sectors, such as food, clothing, and durable goods, might be more resistant to a top-down conversion to national independence, as this objective is increasingly invoked by Russian politicians. This difficulty is due to a couple of interrelated reasons: insufficient domestic production, and the commonly perceived prestige of for-

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eign brands. Changing both factors might require decades of efforts, regardless of any political will. But what if an unexpected guest would suddenly come and overhaul the game’s rules? What if the pace of change could be accelerated, acting on a retail sector that in 2014 is still relatively negligible, and therefore more mouldable? The conclusion of this chapter is envisioning a scenario of this kind. Dealing with the future, the following narration can’t but be a fictional one. However, in the urban routines of 2064’s Russia, the spirit of the time is dictated by e-tail.

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1— E-tail Rules the Country

In 2064, e-tail is the leading form of commerce in Russia. In the main metropolis, the majority of all retail sales are made online, particularly in the food, clothing, and consumer electronics sectors. However, retail has not disappeared from the urban space. Rather, it has changed its role. Online retailers have perfected a mixed, virtual-plus-physical sales system. Also, many sellers have turned their physical shops into “outposts” conceived to attract and lure customers to buy products that immediately (or at any time) will be delivered to any desired destination.

2 — Opened Logistics, Closed Customs

Huge improvements have been made in the logistical sphere. Railways, ports, and roads have been renovated or built from scratch. This has resulted in Russia becoming one of the most efficient nations in domestic distribution. All kinds of deliveries can now be performed within one day (in the major urban centres), and within three days (anywhere else). At the same time, clearing customs has become tougher. Therefore, the import of foreign goods has become particularly expensive and unfavourable — especially for products bought online.

3 — “Buy Online, Buy Russian”

Online retail has become so successful not just because it can take advantage of the web of brand-new transport infrastructure, but also because it is a critical component of State propaganda. Indeed, as the government has gradually put the web under stricter control, asking local and foreign companies to communicate all the data about their customers, e-tail has emerged as an instrument of consensus. People are encouraged to buy domestic products, in order to support Russia’s autonomy. “Buy online, in our safe, patriotic Internet!”, has become a popular TV and mobile ad.

4 — Better, Cheaper, More Patriotic

After a long-term plan to empower the amount of national production in sectors such as food, clothing, automotive, and the hi-tech industry, Russian firms have finally become able to satisfy the vast majority of internal demand. Sustained by State subsidies, Russian firms can sell their goods at a more accessible price, while online retail companies offer special, advantageous conditions of delivery to those clients purchasing national products only. On the contrary, buying foreign goods only can expose you to the risk of being denounced for “anti-patriotic behaviours”.

5 — Less West...

Expelled by the G8 and excluded by the OECD accession since 2014, Russia has reduced its relationships with the West to the bare minimum. Though the European Union is not the country’s first trade partner anymore, and talks for a renovation of the Partnership and

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In the gigantic distribution centres of the e-tail companies, rapidity and precision in processing customers’ orders are the most critical factors for success. Since October 2013, Amazon has employed “robotic fulfilment systems” shown in the picture, acquired for $775 million from the Massachusetts start-up Kiva

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Co-operation Agreement with the EU has been interrupted irreparably, a complete economic detachment would be far too disadvantageous for both parties. Thus Russia will still supply some foreign firms, in particular in Germany, with natural resources and metals.

6 — ...And Much More Asia

In order not to dismantle its gigantic oil and gas industry, Russia has found new destinations for its exports. Three directions have been followed. Firstly, the government has reinforced the Euro-Asiatic Custom Union, involving many central Asian, former CIS countries. Secondly, it has initiated new relationships with China, with which it also runs an independent system for financial transactions (credit cards) and a rating agency. Thirdly, it has strengthened its bonds with countries sharing a similar anti-American attitude, such as Syria and Iran.

7 — Friendly Competitors

The Russian government has put in place many measures to counter the effects of its policy of isolation. Foreign corporations have abandoned the country, but people left unemployed have found a new occupation in private enterprises established to substitute imports with locally-made products. As the survival of these firms is essential for the State’s economy, the competition between them tends to be soft, despite the government’s intention to avoid the mistakes of the Soviet Union and to keep the pace of innovation high, especially in the hi-tech sector.

8 — A Hip Diaspora

Consequences of the new policy of autonomy have been not only a capital outflow, but also a human outflow. Despite the new visa limitations, thousands of Russians have fled from their country, finding asylum in the West. A new breed of entrepreneurs, artists and intellectuals has given birth to a vast debate on the true nature of the Russian identity, involving all spheres of culture and creativity, from design to fashion, architecture to literature. In London, New York and Paris, everything associated with Russia is now considered smart, desirable, and valuable.

9 — Resisting the Black Market

In the autonomous Russia, a thriving black market allows people — especially the richest ones — to still buy goods coming from abroad. French bags, Italian shoes and Californian tablets are available for purchase: not online, but in the permeable, shady physical world. Items stacked in the back of shops are sold at very high prices, yet still slightly cheaper than if they would pass through the national customs. In order to oppose this phenomenon, Russian authorities have established both a Minister for National Branding and a University for National Branding and Innovation.

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Evgeny Butman

O N T H E N AT U RE O F L I M I T S I n t e r v i e w b y Yu r y G r i g o r y a n a n d M a r i a S l a v n o v a

Moscow government authorities often state that Moscow’s ratio of retail provision measured in square meters is behind that of other cities. The title of our book — «Enough Retail» — can be read as a question. We want to understand, on one hand, quantity, what there is plenty of and what is there a lack of. On the other hand, what happens to quality: what retail is and what it can be? I agree, the question is complex and layered. Here it is important to analyse and look separately at all the different formats of retail. Street retail lives according to one set of rules, shopping malls — to others, markets — follow their own rules… It is important to look at the quality of retail and compare it with the spending capacity of the population, as well as with the culture of consumption. For example, shopping centres are collective spaces, and street retail are individual spaces. It is important to analyse short and long-term trends, taking into an account the changes in the urban environment. Do you think there is enough retail in Moscow or is there a lack of it? I think that there is enough, if we are speaking only about the number of square meters. But we do not have quality street retail. We do not have small vegetable markets and butchers in the residential neighbourhoods. Why is retail so exceptional in Paris or London? There are neighbourhoods, which are designed in such a way that you can buy everything you will ever need without leaving your neighbourhood. In London, there is always a variety of choices between small grocery stores. It is the same case in Paris. There are no Ashans and Walmarts, within the city limits, that format is reserved purely for suburban spaces.

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Can we say that Moscow lacks quality in retail? Of course we don’t have enough quality retail. Besides, retail square meters are unevenly distributed throughout the districts and lack modern compact formats. As once with we had experience with statistics on steel production per capita, now we have statistics of retail square metres. What is important to consider is for what strata of the population are these square metres? For example, what is the level of purchasing capacity? It is clear that the districts with lower purchasing power need a lower level of provision of retail spaces. The opposite applies to where there is high purchasing power; retail could evolve into a different form, abandoning discount stores and offering a luxury formats. The quality of retail depends on many factors. Can the city invent a unique concept of retail and implement it? Before being unique, it is important that the concept is functional and convenient. The concept of distinct retail is more appropriate for medium-sized cities, and for isolated districts, in essence, small cities. Take New York as an example, consisting of four separate mini-towns: Manhattan, Bronx, Brooklyn and Queens. Within each separate district, people satisfy their daily needs. And Moscow — is one city, without internal borders. A resident of any district can go shopping to any other district. In our research we saw that Moscow’s territory is overlapped by five or six large radiuses of accessibility of large shopping centres. You will never go to a shopping mall for fresh bread and vegetables. No matter what a huge functional shopping centre looks like, there always has to be space left for the small shops near the home, where the salesperson knows Maria Petrovna and knows that she always gets the same carton of milk, where social interaction happens between neighbours. Curiously, in Moscow there only 3% or 4% of territory belongs to the historical centre, which allows space for small retail. Even in Stalinist houses, not mentioning microraions, there isn’t adequate space. Here we run into the state of commercial real estate. Street retail is currently in bad condition, it does not evolve; it is expensive and inconvenient. Small neighbourhood stores have little chances. And they are the ones, in my opinion, whom the government should care for the most. What would you do in their place? I would invent a program for the support and revival of street retail. I would make an inventory of all buildings not suitable for residence. Later I would work out a system, which manipulates taxes in such a way, that banks would pay much higher property

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tax than, for example, small grocery stores and pharmacies. I would also work on the concept of retail streets, choosing the ones that have the most potential. I would buy these streets with government funds and make a joint-stock company, creating the various distinct street profiles centered on one theme — shoes, clothes. For example, I was in Lisbon in the 90’s; I saw millions of tourists shopping on the street for leather shoes and accessories. They were walking around and shopping, buying the goods, which might not have been the most fashionable, but truly authentic and affordable. Later on, one could privatize the company and fix the profile of the street for the next 15 years, for example. And what else? I would also allocate space in the ministry buildings in the city centre and move the ministries to the New Moscow. And in the vacated buildings I would make few big, impressive Department stores, as it works in other cities. Of course in the centre there should be something similar to Galeries Lafayette (Paris), or Selfridges (London), or Saks Fifth Avenue (New York) — big, beautiful, comfortable, with chandeliers and bronze… Comfortable to visit. Yes, a comfort zone. And as for shopping centres, I would undoubtedly restrict new construction bigger than 40,000 square meters within city limits — this is the size of an Atrium, Erevan-Plaza, Capitoly near the metro Universitet. The city is divided into districts, and each new shopping centre could have a coverage area for this district — here you go, build a new district shopping centre. And what about kiosks? I am a true enemy of kiosks. There is no need to sell food on the street, especially tobacco and alcohol. Compare this situation to Europe where they mostly sell fruits and souvenirs in kiosks. I would restrict all kiosk and underground pathway sales. It is already restricted and people are suffering. They cannot find small accessories, which were so cheap and common at this type of retailer, like watch batteries. Well, as I see it, batteries are the last item on the list of what is sold in the underground pathways. Take women’s lingerie as an example. There is a crowd of people, winter, mud and slush, and here are the bras stacked up. It is awful, it takes away all the intimacy, associated with shopping for underwear. You ask people what they associate with sales there: dirt.

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And you think they don’t like it? No, they don’t. People have to get used to the idea that the city is clean and comfortable. Batteries — of course, are another story. Batteries should be sold in any small trade store with a range from soap to batteries, as they have in Europe. You said you would limit big shopping malls within the city limits. What gives it such scale? First of all, when there is too much retail space, the spaces get filled with shops that are less effective, which take away visitors from the ones that are, leading to decline of all those involved. Secondly, there are traffic problems. I think that large shopping centres are a way to attract a crowd. You know this joke: a cop stops a truck, which is driving recklessly, leaning from side to side. And the driver asks the cop to let him go. He says his load capacity is two tons and he has three tons of butterflies inside, with one-third having to fly all the time. It seems as if the big shopping centres are being built under the impression that Moscow has way too many extra people, and that you must find something for them to do. You have mentioned that you would love to open Department stores… How did these department stores appear, or in our terms, “univermags”? It came from the days, when there were no brands; people simply went to big stores for ready-made clothes, for fabric for the clothes. There were no chains, no monobrands. Unvermag was one continuous space divided thematically into sections. As a rule they were built in the city centre, they were noticeable and beautiful buildings. This format proved to be sustainable and still survives today. In fact, in USSR only this format existed. There were practically no chains. A shopping mall is a platform where chains can compete against one another. Shopping malls can be built fast and programmed with generic content. Univermags do not fit into this format. Univermags did not disappear and the habit of shopping there still remains, but their share in the market is rapidly decreasing with shopping malls taking over, exploiting the market, as does anything generic. In Russia the most practical and effective survives. The beauty is not practical. If the products are priced moderately, they are traditionally associated with local production, and in Russia, there is no production. What do you think: is there a way to replace most of the imports, and in turn support local production, sell our own quality products? There are products in every developed country that are locally produced. But to really make this happen in Russia, the business environment should be different. It is much easier to make this happen in food products and we see that the share of local food in the current market is growing. In clothes and other products we are far from Europe, where in each country there is a distinct share of local brands in the market.

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So in theory it is possible. To create an attractive business climate, free people from taxes… Perhaps it is. There is a common suspicion that retail itself is based on manipulation on different levels, is this true? Well, manipulation, everyone is always manipulating or being manipulated. Generally, the curse of the century is manipulation. At least these are retailers manipulating, with their somewhat straightforward, unambiguous goal — to sell you more. And advertisement, does it carry within it cultural values? Perhaps, only the value of information. But the information is never critical, and at times, not so truthful. In the West, people have learned not to trust advertisement so easily. And in the developing countries, in the new markets, advertisement is taken as pure information. This at times can acquire painful and unhealthy turns. We had a hypothesis, that in Russia, only the most basic techniques of manipulation work, bringing the people down a level lower. Take British advertisement playing wittily with the sense of humour, and take ours — primitive, basic, straight in the face. If advertisement did not work… The void in the absence of culture and education will continue to be filled with the most basic, most primitive, straightforward subjects. Why isn’t anybody making advertisements of how we should be healthy, play sports, go to the theatre, read books? It is hard to promote these ideas; it has to be brought up from infancy. We touched upon the relationship of art and retail in our research. Art is on the frontline of reflecting on retail. And retail, on the other hand, cannot do without art, placing artefacts inside shopping malls, finding other forms. What does it mean to you? You asked me earlier about retail in the underground space. In London, at the corner of Barclay and Piccadilly, there is an underpass that goes to the other side of Hyde Park. And this underpass is covered in beautiful drawings. There is no retail, just art. And in Rome there is a long underpass all covered in paintings, done by artists. In my opinion, the shopping malls exploit the most basic human desires. Art should not be one of them- it should be separate. Although I am not a specialist here, it is possible that modern art suits the role of being an artefact inside a big shopping centre?

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So you are orthodox? It would be more correct to say that I am a realist. Shopping malls and department stores evolved from the idea of functionality. Functionality is the religion of retail. And here comes someone who makes the shopping mall beautiful, if we are talking about cultivating beauty in the consumer. Modern art, on the contrary, does not generate beauty; it has a completely different function. Shopping malls do not get published in architectural magazines and are rarely considered “architecture”. Retail, purely out of profit, could take a giant banner and cover the whole façade or destroy the interior. It is almost formless, liquid. Yes, perhaps contemporary art is most suitable for commercial retail. Do you see any boundaries or limits to retail? Is it becoming not necessary? Can we do without it? Should we control and regulate it? Because all retail really makes is trash and packaging, and we have a big responsibility ahead… I think we are speaking about the consequence, not the cause. The reason is hidden in the conscious of the modern man. He is no longer homo sapiens, but rather a homo consumer. This forms demand. And retail is the supply, a response to the views and desires of the modern man. This new demand originated in the society where people started working not 12 hours a day, 6 days a week, but much less, freeing time, energy, prolonging their life expectancy, bringing up their salaries. Here is the golden billion- they have time and money, which they spend on consumption. Urbanization led to a combination of social and mental factors, that one has to alleviate. Shopping is a drug. I don’t think it is possible to limit and control retail, but it is necessary to examine the limit of the modern consciousness. Sometimes a crisis could fulfil the role of the limit. So a permanent crisis arranged for oneself? And this could help… …change mindsets. Stop substituting shopping for real life. The most fascinating is what would come next? You know this great story about metro stations, where QR codes are displayed and you could buy all the products with your phone through the internet. So if we say we have come to the limit, the full evolution of the homo consumer and retail itself, would it lead us to a revolution in the near future? And if not — what is waiting for us?

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MANIFE FOR MO 2014

STO

OSCOW

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The city of Moscow has enough retail square metres already. The past two decades of Post-Soviet hunger has given retail the keys to the Russian capital. In the transitional period, the sectorâ&#x20AC;&#x2122;s main driver of development has been the need to fill market demand, with little space left for the idea of building a sustainable retail ecosystem. This is reflected in the current distribution, provision, and quality of B2C services in the city. Nowadays, Moscow continues to build large regional centres with vast radiuses of influence, shopping malls that drain neighbourhood street retail, favouring western models, breeding inequality, and moving blindly into the way of even more square metres of retail. This is an important moment to speak of retail as a City Building Tool. Rather than discarding retail, we need to acknowledge it as an irreplaceable human force, which now needs to be pushed in a new direction. We need to give retail the power to revive neighbourhoods, and to fuel the demand for street life and street commerce. In order to fully realize this power, we need to set up the necessary conditions for a new balance between formal and informal, large and small, western and national. A fresh look at the potential of retail as a smart tool for the revival of culture and city space can contribute to fighting the prejudices often associated with the world of commerce, both within the architectural and urban plan-

ning circles, and among the general public. As a western implant, retail has found a way to stay, but still it has not been able to draw an image unique to Moscow. A change of paradigm is now required. Moscowâ&#x20AC;&#x2122;s experience may provide a useful case study not just for Russia, but also for other cities in the world, which are now struggling with the benefits and downsides of globalization. We think it is necessary to embrace retail. It is a vital, purposeful, stimulating force, speaking to the new orders of our society, culture, even art. We do believe retail can make a city better. But to make this happen, not only retail must change: the attitude of the city government towards it must evolve, too. Together, with the awareness of the consumers, retail can find a new internal balance and help to set a different concept of the urban experience. The City of Moscow must develop a deeper understanding of the current way retail works, proposing new models based on proper analysis and research, and integrating the various local communities into the process of reviving neighbourhoods and taking ownership. A driver of new local production. An engine for territorial regeneration. A frontier of emerging technologies. A social and cultural tool, helping to preserve local and national identity. As one of the most revealing mirrors in which society can look at itself, retail is in the spotlight for the future of Moscow.

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1 ENOUGH RE TA I L

Moscow doesnâ&#x20AC;&#x2122;t need more retail. It needs better spaces with a balanced range of diversity and quality.

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2 R E TA I L AS A CITY M A KI N G TO O L

Itâ&#x20AC;&#x2122;s not only about business. Retail can play on behalf of the city, not against it, rendering urban life more comfortable and vibrant.

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3 KN OW YO U R MERCHANTS

Retail should be the subject of regular “health-checks” at the level of each district. All results should be made available on Moscow Government’s Open Data portal.

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4 DONâ&#x20AC;&#x2122;T GO S O Â FA S T A S TO E R A S E T H E PA S T

Retail can preserve cultural and historical heritage, through careful regulation and sensitivity to the past, the Soviet era included.

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5 â&#x20AC;&#x153; RU S S I A N I Z Eâ&#x20AC;? T H E RE TA I L LANDSCAPE

Challenge global brands primacy, fight for identity on the city streets for a more authentic experience. Make Russianness a valuable trait for consumers.

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6 C A RE F O R T H E T WO MILLIONS

Donâ&#x20AC;&#x2122;t make social stores: Make every store social to provide all Muscovites who are living on the minimum wage with affordable, qualitative goods.

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7 N U RT U R E MICRORAION RE TA I L IDENTITIES

Each residential area, in particular the most disadvantaged, should have a retail strategy which encourages small businesses and local community involvement.

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8 R E TA I L A S A Â C U LT U R A L AG E N T

Attach shopping facilities to the most visited cultural institutions, orÂ place cultural institutions inside shopping facilities. A contemporary art exhibition inside Auchan might be the first step.

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9 GUIDE THE FUSION PROCESS O F T H E P HY S I C A L A N D T H E VI RT U A L Anticipate the effects of e-tail’s inevitable growth on brick-and-mortar businesses. Prevent the collapse of physical retail’s more vulnerable sectors by promoting their transformation into experiential destinations.

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10 AC KN OWL E D G E T H E U RB A N VA LU E O F THEÂ INFORMAL

With their capability to swiftly respond to local demand, kiosks represent an added common good, worth integrating into the legal economic system.

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11 A DVE RT I S I N G A S A SIGHTSEEING

Dedicate a particular public site to creative, award-winning advertising, atÂ once reducing the visual noise elsewhere and creating a new attraction for tourists and locals.

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12 D I A LO G U E: AÂ NEW COMMON L A N G U AG E F O R R E TA I L AC TO R S

Public-Private-Partnerships and intelligent regulations can raise the market standards without constraining the economic growth.

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GOOD SIDE OF EVIL 1.Key European Retail Data. 2012 review and 2013 forecast. – ESTC/GFK - p. 7 2.Городской маркет еды // Сообщество в социальной сети

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Facebook. – 2014. – [Электронный ресурс]. URL: https:// www.facebook.com/CityFoodMarket (дата обращения: 13.06.2014) 3.Tonkiss, F. Space, the City and Social Theory: Social Relations and Urban Forms. – Cambridge: Polity Press, 2005. 4.Serreli, S. City Project and Public Space. – New York: Springer Science, 2013. 5.Kayden J.S. Privately Owned Public Space: The New York City Experience. – Canada: John Wiley & Sons, Inc., 2000. 6.Longstreth, R.W. City Center to Regional Mall: Architecture, the Automobile, and Retailing in Los Angeles, 1988. 7.Appadurai, A. Disjuncture and difference in the global cultural economy, in S. During (ed.) The Cultural Studies Reader. – London: Routledge, 1999. – c. 220-232. 8.Hogan, J.P. Cultural identity, pluralism, and globalization. – Washington: Library of Congress, 2005. 9.Fiske, J. Understanding popular culture. – London: Routledge, 1989. 10. Myers, K. Understains: the sense and seduction of advertising. – Comedia Publishing, 1986. Group. 11. Darja Reuschke. Public-Private Partnerships in Urban Development in the United States. – 2014. – [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http://www-sre.wu-wien.ac.at/neurus/reuschke.pdf (дата обращения: 13.06.2014) 12. Барьеры развития механизма ГЧП в России. – М.; НПФ «Экспертный институт», 2010. – [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http:// www.niro.nnov.ru/?id=8164 (дата обращения: 17.06.2014) 13.П.Гагарин, «Государственно-частное партнерство как инструмент реализации масштабных проектов». – 2013. – [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http://www.gradient-alpha.ru/assets/docs/ PPP-Research-14.03.2014.pdf (дата обращения: 17.06.2014) 14.7 бед IKEA в России // Cайт журнала Forbes. – 2014. – [Электронный ресурс]. URL: http://m.forbes.ru/article. php?id=43414 (дата обращения: 17.06.2014) 15.MD Group выходит на большую дорогу и профинансирует трассу в Южном Бутово // Kommersant.ru «Коммерсантъ. Издательский дом». – 2013. ¬– [Электронный ресурс]. URL: http://www.kommersant.ru/ doc/2083807 (дата обращения: 17.06.2014) 16.[Quote] Attention, Shoppers: Your Dreams in Aisle 3. - Sharon Zukin, 2003 17.[Quote] Public–private partnership // Wikipedia.com. – 2014. – [Электронный ресурс]. URL: http://en.wikipedia.org/wiki/ Public%E2%80%93private_partnership (дата обращения: 17.06.2014) 18.31% fewer town centre stores by 2020, says Javelin Group report // Javelin Group – 2014. ¬– [Электронный ресурс]. URL: http://www.javelingroup.com/en/press-release-white-paperhow-many-stores.aspx (дата обращения: 17.06.2014) 19.Alex Sukharevsky, McKinsey, interview, 2014 20.ООО "Интернет Решения". – 1998 – 2014. – [Электронный ресурс]. URL: http://www.ozon.ru (дата обращения: 17.06.2014) 21.Интернет-магазин Ашан. – 2014. – [Электронный ресурс]. URL: http://www.auchan.ru/ (дата обращения: 17.06.2014)

22.Virtual Change Room Launch at Robina Town Centre // Youtube.com – 2012. – [Электронный ресурс]. URL: http:// www.youtube.com/watch?v=1QqP4pFFuv4 (дата обращения: 17.06.2014) 23.The Airwalk Invisible Pop Up Store // Youtube.com. – 2011. – [Электронный ресурс]. URL: http://www.youtube.com/ watch?v=4erNe_NpdyE (дата обращения: 17.06.2014) 24.«Виртуальный магазин в метро»: итоги // hi-tech@ mail.ru – 2013. – [Электронный ресурс]. URL: http://hi-tech. mail.ru/news/virtual-shop-summary.html (дата обращения: 17.06.2014) 25.Pretail: Why consumers now love to SHOP for products and services at concept stage // trendwatching.com. – 2014. – [Электронный ресурс]. URL: http://trendwatching.com/ trends/pretail/ (дата обращения: 17.06.2014) 26.UPS researching delivery drones that could compete with Amazon's Prime Air // theverge.com. – 2013. – [Электронный ресурс]. URL: http://www.theverge.com/2013/12/3/5169878/ ups-is-researching-its-own-delivery-drones-to-compete-withamazons (дата обращения: 17.06.2014) 27.Amazon testing drones for deliveries // BBC news. – 2013. – [Электронный ресурс]. URL: http://www.bbc.com/news/ technology-25180906 (дата обращения: 17.06.2014) 28.Urban world: Cities and the rise of the consuming class // McKinsey Global Institute. – 2012. – [Электронный ресурс]. URL: http://www.mckinsey.com/insights/urbanization/urban_world_cities_and_the_rise_of_the_consuming_class (дата обращения: 17.06.2014) 29.E-commerce and the future of retail: 2014 [slide deck] // Business Insider. – 2014. – [Электронный ресурс]. URL: http:// www.businessinsider.com/the-future-of-retail-2014-slide-decksai-2014-3?op=1 (дата обращения: 17.06.2014) 30.[Definition] Pretail: Why consumers now love to SHOP for products and services at concept stage // trendwatching.com. – 2014. – [Электронный ресурс]. URL: http://trendwatching. com/trends/pretail/ (дата обращения: 17.06.2014) 31.[Quote] Doug Stephens, Interview to Anna Maikova, 2014

ROUTINE PORTRAITS 1.Официальная статистика. Население // Федеральная статистическая служба. – 2014. – [Электронный ресурс]. URL: http://moscow.gks.ru/wps/wcm/connect/rosstat_ts/moscow/ru/statistics/population/ (дата обращения: 17.06.2014) 2.Global Cities Retail Guide. Moscow // Cushman& Wakefields. – 2012. – [Электронный ресурс]. URL: http://cwglobalretailguide.com/moscow/#tabs-402-0-2 (дата обращения: 17.06.2014) 3.Ilona Lepp. How Russian retailers can prepare today for tomorrow’s gains. // Nielsen Consumer 360, Nielsen Russia and Northeast Europe. – 2014. – [Электронный ресурс]. URL: http://www.consumer360.com/how-russian-retailerscan-prepare-today-for-tomorrows-gains/ (дата обращения: 17.06.2014) 4.Maciej Przybysz. How to win with the russian shopper // Nielsen Consumer 360, Nielsen Russia and Northeast Europe. – 2013. – [Электронный ресурс]. URL: http://www.consumer360.com/how-to-win-with-the-russian-shopper/ (дата обращения: 17.06.2014) 5.Марина Курганская. В подземных переходах откроют мини-магазины "Перекресток" и Metro. – 2014. – [Электронный ресурс]. URL: http://www.m24.ru/articles/43572 (дата обращения: 17.06.2014)

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6.“Marketing Index 2013”, TNS–Global Russia 7.Retailing 2020: Winning in a polarized world // PricewaterhouseCoopers & Kantar Retail. – 2006 – 2014. – [Электронный ресурс]. URL: www.pwc.com/us/retailandconsumer (дата обращения: 17.06.2014) 8.From X to Y global exploring // Saatchi & Saatchi. – 2010. – [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http://www.swissmediatool.ch/_files/ researchDB/383.pdf (дата обращения: 17.06.2014) 9.The Globe Shopper Index, 2014 10.Юлия Ястребова, Роман Тимощук. Мы с вами становимся свидетелями зарождения нового класса потребителей – Smart Consumer // AdIndex.ru. – 2013. – [Электронный ресурс]. URL: http://www.adindex.ru/publication/interviews/marketing/2013/09/5/101840.phtml (дата обращения: 17.06.2014) 11. Индекс «Среднего чека» // Ромир Мониторинг. – 2014. – [Электронный ресурс]. URL: http://romir.ru/indexofaverageticket/ (дата обращения: 17.06.2014) 12.Доходы москвичей за 2013 выросли до 55 тысяч рублей // Российская газета. – Столичный выпуск №6323 (51). – 2013. ¬– [Электронный ресурс]. URL: http://www. rg.ru/2014/03/04/dohod-site-anons.html (дата обращения: 17.06.2014) 13.Тихонова Н.Е. Низший класс в социальной структуре российского общества. ¬– Социологические исследования, 2011, № 5 14.Эльмар Муртазаев. «Иди на мир с открытым забралом»: интервью с Сергеем Галицким и Аркадием Воложем // Сайт журнала Forbes. – 2014. – [Электронный ресурс]. URL: http://www.forbes.ru/milliardery/255627-idi-na-mir-s-otkrytym-zabralom-intervyu-s-sergeem-galitskim-i-arkadiem-volozhem (дата обращения: 17.06.2014) 15. Радаев В. Захват российских территорий. Новая конкурентная ситуация в розничной торговле. 16. Campbell C. The Romantic Ethic and the Spirit of Modern Consumerism 17. Project Meganom, Strelka Institute for Moscow Urban Forum. Archeology of periphery. –– Moscow: Printmarket, 2013. 18.Winter Rainer. The practices of everyday life under global conditions. On the relationship between popular culture and post-modernism. – [Электронный ресурс]. URL: http://www.rainer-winter.net/index.php?option=com_content&task=view&id=3&Itemid=24 (дата обращения: 17.06.2014)

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SHOPPING MALL: FROM QUANTITY TO QUALITY 1.Анна Орлова. Colliers International Press Release // Colliers International. – 2012. – 10 августа [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http:// www.shopandmall.ru/files/TC_Colliers.pdf (дата обращения: 17.06.2014) 2.Cherdantseva O. Lezhneva V. Going out. Entertainment – no longer just an anchor tenant… // Jones Lang LaSalle Report. – 2011. – март [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http://www.jll.ru/russia/en-gb/Research/JLL_Russia_Going-out-EN_March_2011.pdf?d846723c8bc5-4702-a04d-71471a0409be (дата обращения: 17.06.2014)

12. “Temptation Employee at Workplace” conducted Falcongaze LTD in 2012 13. The Joy of Shopping: It’s All in the Mind // FITCH, WPP Company. – 2014 [Электронный ресурс]. URL: http://www. fitch.com/think-article/the-joy-of-shopping/ (дата обращения: 17.06.2014) 14. Lemmon, Barry. Finding faster growth // TNS global. – 2014 [Электронный ресурс]. URL: www.tnsglobal.com (дата обращения: 17.06.2014) 15. Zimmerman, Ann. As Shoplifters Use High-Tech Scams, Retail Losses Rise. – Wall Street Journal Online, Oct. 25, 2006

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T I M E I N VA D E R S 1.Eyal Nir, Ryan Hoover. Hooked: A Guide to Building Habit-Forming Products // Amazon.com. – 2014 [Электронный ресурс]. URL: http://www.amazon.com/ (дата обращения: 11.05.2014) 2.Коммисарова Татьяна. Как формировать ценность на рынке. – 2011 [Электронный ресурс]. URL: http://www.hse. ru/ (дата обращения: 17.06.2014) 3.Labor and Employment Moscow. 2012: Statistical compilation. - Moscow: The Department of Labor and Employment the city of Moscow, 2013. - 120. 4.Populations légales en vigueur à compter du 1er janvier 2013 // INSEE. – 2013 [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http://www.insee.fr/fr/ppp/bases-de-donnees/recensement/populations-legales/pages2012/pdf/dep75.pdf (дата обращения: 17.06.2014) 5.Bains Baljit. 2011 Census first results: London boroughs' populations by age by sex. – GLA Intelligence, 2012. 6.Coote Anna, and Jane Franklin. 21 hours: why a shorter working week can help us all to flourish in the 21st century. – London: New Economics Foundation, 2010. 7.Досуг Круглосуточно // 24time.ru. – 2014. – [Электронный ресурс]. URL: http://www.24time.ru/category.php?id=54 (дата обращения: 17.06.2014) 8.Сервис для наблюдения за покупателями // watcom.ru. – 2014 [Электронный ресурс]. URL: http://www.watcom.ru/ services/shop_mechanics.php (дата обращения: 17.06.2014) 9.Управление недвижимостью // Colliers FM. – 2014 [Электронный ресурс]. URL: http://www.colliers-fm.ru/ (дата обращения: 17.06.2014) 10. Горлова Юлия. Столичные торговые сети увеличивают количество круглосуточных магазинов // Jones Lang La-

18. Milner, A. D. and Melvyn A. Goodale. The visual brain in action. 2nd ed. – Oxford: Oxford University Press, 2006. 19. Freedman, Lauren. The 2011 Social Shopping Study // The e-tailing group. – 2011 [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http://www.powerreviews.com/assets/download/Social_Shopping_2011_Brief1. pdf (дата обращения: 17.06.2014) 20. Intriligator, James and Gary Haime. In-Store Stand Out. // SBXL. – 2014 [Электронный ресурс]. URL: http://www. sbxl.co.uk/what-we-do/in-store-stand-out (дата обращения: 17.06.2014)

LIMITING THE UNLIMITED: NECESSITY OR CHOICE? 1.Список социальных магазинов // Портал открытых данных города Москвы. – 2014 [Электронный ресурс]. URL: http://data.mos.ru/datasets/750 (дата обращения: 17.06.2014) 2.Неравенство и бедность // Федеральная служба государственной статистики. – 2014 [Электронный ресурс]. URL: http://www.gks.ru/wps/wcm/connect/rosstat_main/rosstat/ru/statistics/population/poverty/# (дата обращения: 17.06.2014) 3.Официальный сайт Правительства Москвы // mos.ru. – 2014 [Электронный ресурс]. URL: http://www.mos.ru/ (дата обращения: 17.06.2014) 4.Маркетинговые исследования рынков России // TEBIZ group. – 2014 [Электронный ресурс]. Систем. требования: Adobe Acrobat Reader. URL: http://tebiz.ru/pdf/marketfoodstuff.pdf (дата обращения: 17.06.2014) 5.Minimalism for families with children // Joshua Fields Millburn & Ryan Nicodemus. – 2014 [Электронный ресурс]. URL: http://www.theminimalists.com (дата обращения: 17.06.2014) 6.Бедность в России // Youtube.com. – 2013 [Электронный ресурс]. URL: http://www.youtube.com/watch?v=JWtQP_ bmu_I (дата обращения: 17.06.2014) 7.Ожирение и избыточный вес // Информационный бюллетень ВОЗ N°311. – 2014. – май [Электронный ресурс]. URL: http://www.who.int/mediacentre/factsheets/fs311/ru/ (дата обращения: 17.06.2014)

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414 All reasonable efforts to secure permissions for the visual materials have been made by the authors of each essay. We apologize to anyone who had not been reached. SHOPPING HABITATS 1. http://www.2do2go.ru/uploads/653a2ca969af617790df689d0b999c0c_w180_h180.jpg http://www.2do2go.ru/msk/places/30390/torgovyy-centr-zolotoy-vavilon 2.http://www.esosedi.ru/onmap/torgovyiy_tsentr_metro_ cash_and_carry_n11/5018406/index.html 3. author’s photo 4. http://www.aeteh.com/events/2011/n_030311.html http://www.aeteh.com/im/events/2011/1_1.jpg 5. http://www.commerce-realty.ru/malls/5/ https://lh6.ggpht.com/9guGs5TZ_mmaIBrWD_yYdX8OrJ8KQa_xf-1b1XmliNwnrtvNhLm5KupUISeYokW4w21K1Q=s153 SHOPPING MALLS: FROM QUANTITY TO QUALITY Advertising 1. Evropeisky shopping mall: Moscow info list http://infolist-msk.ru/view.php?id=1563 Life and Death of Shopping Malls 2. Aerial view of Westlake shopping center, San Francisco: credits Derrick Coetzee, Common Wikimedia http://commons.wikimedia.org/wiki/File:Aerial_view_of_Westlake_ Shopping_Center,_San_Francisco.jpg Shopping Mall Paradox 3. Moscow First McDonalds on Pushkinskaya Square: credits Old Moscow Website http://oldmos.ru/old/photo/latest/all/300 4. Escalators at the Shopping Mall: credits Anita Maris, DailyMail http://www.dailymail.co.uk/news/article-2078991/Big-HighStreet-names-collapse-days-despite-2-5bn-day-sales-boom. html Where is the Limit? 5. Vegas shopping mall: credits Crocus Group http:// kashirskoe.vegas-city.ru/entertainment/ 6. Dubai Mall construction http://www.elakiri.com/forum/ showthread.php?t=219130 Malls in Focus 7. Vegas: credits Ya Potrebitel website http://yapotrebitel. ru/c/articles/page/14 8. Afimall City: credits Welhome Real Estate Consulting http://www.welhome.ru/torgovaya-nedvizhimost/pomeshchenie-t-1600 9. Evropeisky: credits Zdanie.info website http://zdanie.info/ 10. Atrium: credits Ros Spravka website http://msk.ros-spravka.ru/catalog/shopping_malls/atrium_torgovo_razvlekatelnyy_kompleks_trk/ 11. Mega Khimki: credits Skidki Mira website http://skidkimira.ru/catalogue/tradecenters 12. Gagarinsky: credits Alexey Sinyakov, RBK Daily http:// www.advertology.ru/article117838.htm 13. Gorod: credits Time Out magazine http://www.timeout. ru/msk/place/11005 14. Zolotoy Vavilon Rostokino: credits Real News website http://real-news.biz/gruppoj-immofinanz-zakryta-sdelka-po-pokupke-torgovogo-centra-zolotoj-vavilon-rostokino/ 15. Metropolis: credits U-Kon Systems website http:// www.u-kon.ru/torgovyj-centr-metropolis-g-moskva-shopping-center-metropolis-moscow.html 20 Urban Criteria 16. Tokyo Midtown Center (outdoor): credits AECOM http://www.aecom.com/deployedfiles/Internet/Capabilities/ Architecture/images/Tokyo%20Midtown7-690.jpg 17. Westfield Stratford: credits Zingarate website http://www. zingarate.com/network/londra/page/19 18. Tokyo Midtown (indoor): credits Tokyo Midtown website http://www.tokyo-midtown.com/en/ 19. Tokyo Midtown (indoor) — 2: credits Tokyo Midtown website http://www.tokyo-midtown.com/en/

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20. Westfield Stratford — 2: credits Edouard Moreau 21. Yorkdale Shopping Centre: credits Indiamart http://www. indiamart.com/maruti-railing-world/glass-canopies.html Interview 22. June Williamson: credits June Williamson Malls: the Bigger the Better 23. Westfield Stratford — 3: credits The Independent http://www.independent.co.uk/news/uk/home-news/ westfield-stratford-city-14bn-shopping-centre-set-toopen-2353547.html 24. Westfield Stratford — 4: credits Living Groofs website http://livingroofs.org/gary-grant-blog/240-grantgreenwall LIMITING THE UNLIMITED: NESSESITY OR CHOICE? Smart strategies: 1. http://live4fun.ru/joke/474349 2. http://www.health.com/health/article/0,,20410098,00.html 3. https://www.flickr.com/photos/blinkutza/2583763306/in/ photolist-4WjsPd-5CoGH1-8N541z4)http://www.theguardian.com/global-development/poverty-matters/2014/feb/24/ fairtrade-20-much-achieved-much-to-be-done 4. https://www.flickr.com/photos/28686960@ N06/4969766245 CONSUMER MANIPULATION: PRESSING YOUR BUY-BUTTONS 1. Cover Image: Banksy’s Apeman http://3wymkl3lkak82e1u8f2n3nqvtoy.wpengine.netdna-cdn.com/spain/ files/2014/01/06-apeman-banksy-wallpaper.jpg alternative: http://www.modernism.ro/wp-content/uploads/2012/06/you-are-not-banksy-nick-stern-4.jpg 2. Cover Image: Louis Vuitton chest on the Red Square http://www.thestar.com/content/dam/thestar/news/ world/2013/11/27/giant_louis_vuitton_suitcase_on_red_ square_sent_packing/vuitton_red_square.jpg 3. Cover Image: Buy life http://i896.photobucket.com/albums/ ac169/JennyWildz/BUYLIFET-SHIRTCELEBRITIES.jpg 4. Interview photo: V. Klucharev http://www.neuroeconomics.neurobiotech.ru/sites/default/files/pictures/Marin%20 %20Puskaric%203.jpg THE GOOD SIDE OF EVIL 1. Funart http://www.bullshift.net/data/images/2013/09/wbcd-wallpaper.jpg 2. Activism by Ivan https://lh3.googleusercontent. com/-3LA8F00pIrs/S21kQcjgmOI/AAAAAAAAjJc/g4Syan6qtIA/s720/DSC02933.JPG 3. Luzhniki1997 http://oldmos.ru/old/photo/view/74324, source http://retromosfoto.ucoz.ru 4. VDNKH2007 by Eelke Feenstra at Flickr.com 5. Preservation Tool at malls.ru 6. Preservation tool by Maria Slavnova 7. Moscow Shopping by Adam Baker http://www.flickr.com/ photos/atbaker/76486057/ 8. Moscow Shopping by Katy Asinskaya 9. Moscow Shopping by Katy Asinskaya 10. Moscow Shopping by Katy Asinskaya 11.Funart by agor_noga http://www.ljplus.ru/img4/a/g/ agon_noga/aug41.JPG NO RETAIL 1. No retail by Katy Asinskaya 2. Airwalk_Pop_Up_NY http://www.bestadsontv.com/files/ print/2010/Nov/32618_Airwalk_Pop_Up_NY.jpg 3. Amazon_delivery drones http://www.gannett-cdn.com/ media/USATODAY/USATODAY/2013/12/02//138600456300 0-USA-NOW-still.jpg 4. MediaMarkt metro pop-up virtual store http://img-fotki. yandex.ru/get/9358/164196049.3d/0_cc35b_67dd07fd_orig 1-9. collages by Maria Slavnova

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ARTICULATING RETAIL Catalogue: 1. Boris Mikhailov. Tea Coffee Cappuccino. http://www. dalpine.com/en/book/tea-coffee-cappuccino 2. Vladimir Arkhipov. Hand-Made Russia. http://www.interviewrussia.ru/hudozhnik-vladimir-arhipov-ya-sam-ne-ponimayu-zachem-v-rossii-sushchestvuet-sovremennoe-iskusstvo 3. Sergey Bratkov. Slogan. http://www.reginagallery.com/ ru/node/584 4. Philip Dontsov. Father. http://old.kandinsky-prize.ru/ hronika/uchastniki-vistavok/2007/doncov 5. Anna Zholud. Household Appliances. http://www.aidangallery.ru/authors/gelud 6. ELECTROBOUTIQUE. Shop. http://www.electroboutique.com/works/ 7. Svetlogorsk, Russia. Graffiti. http://artvandal.livejournal. com/tag/Светлогорск 8. Ekaterinburg, Russia. Graffiti. http://artvandal.livejournal. com/tag/Екатеринбург 9. Kolomna, Russia. Artvandal. http://artvandal.livejournal. com/tag/Коломна 10. Vladivistok, Russia. Billboard. http://www.primorye24. ru/news/exclusive/13038-vo-vladivostoke-vnov-isportili-plakat-s-reklamoj-protiv-vandalizma.html 11. AES+F. From The Feast of Trimalchio project. http:// www.museum.ru/N39408 12. Alevtina Kakhidze. The Most Commercial Project. http:// www.alevtinakakhidze.com 13. Alevtina Kakhidze. The Most Commercial Project. http:// dresscodeperm.ru/news/13/401/ Inventory Of Subversions 1. Louvre Museum’s Carrousel du Louvre shopping mall. http://www.huffingtonpost.com/2012/03/12/huffpost-arts-interviews-ron-english_n_1335586.html?ref=topbar 2. The National gallery shop in London in 2008. http:// www.hurriyetdailynews.com/shopping-malls-become-anunexpected-art-space.aspx?pageID=238&nID=26151&NewsCatID=385 3. The National gallery shop in London in 2014 with more sophisticated retail approach. http://www.hurriyetdailynews.com/shopping-malls-become-an-unexpected-artspace.aspx?pageID=238&nID=26151&NewsCatID=385 4. Vatican Museum’s gift shops. http://www.thedrum.com/ knowledge-bank/2011/12/19/brands-and-art-living-harmony-sake-advertising 5. Walls of shopping mall ION Orchard. http://english. al-akhbar.com/node/8463 6. Moscow Tsvetnoy Central Market. http://www.the-village. ru/village/service-shopping/shops/105785-gid-po-univermagu-tsvetnoy-2010-11-17 7. Bradford Kelleher. http://www.nytimes.com/2007/11/06/ arts/06kelleher.html?_r=0 8. Guggenheim Abu Dhabi. http://www.guggenheim.org/ abu-dhabi 9. Louvre Abu Dhabi. http://en.wikipedia.org/wiki/Louvre_Abu_Dhabi 10. Murakami Louis Vuitton shop. http://www.louisvuitton. com/front/#/eng_US/Journeys-section/Friends-of-theHouse/Personalities/Takashi-Murakami 11. Takashi Murakami The World of Sphere. http://wemake-money-not-art.com/archives/2008/05/is-there-anyone-left-in.php 12. Signature of Kidult. http://www.streetartnews. net/2013/09/crisis-day-sale-street-art-by-kidult-chanel-paris.html 13. Kidult. http://kidultone.com 14. We say bravo to your approach. http://kidultone.com 15. Kidult. http://kidultone.com 16. Liquidated Logos by ZEVS. http://www.artspace.com/ magazine/interviews_features/zevs 17. Visual Kidnapping by ZEVS. http://www.gzzglz.com/ video-visual-kidnapping.html 18. Liquidated Logos. http://www.theoutsiders.net/artist/ zevs 19. Karl Lagerfeld http://www.nydailynews.com/life-style/ fashion/lagerfeld-mixes-art-fashion-chanel-article-1.1472621

415 20. Karl Lagerfeld Chanel’s Fall/Winter 2014 show. http:// www.thedailybeast.com/galleries/2014/03/05/shop-til-youdrop-at-chanel-fall-winter-2014-paris-fashion-week-photos. html 21. Soft butter by Bvlgari. http://www.peddymergui.com/ portfolio/soft-butter-by-bvlgari/ 22. Elmgreen & Dragset — Prada Marfa. http://en.wikipedia. org/wiki/Prada_Marfa 23. Prada Marfa. http://en.wikipedia.org/wiki/Prada_Marfa 24. Prada Oasis (see 24.) and Damien Hirst’s Pharmacy Juice Bar. http://hauteliving.com/2013/10/prada-oasis-damien-hirsts-pharmacy-juice-bar/401475/ 25. The “Prada Oasis” store by Miuccia Prada and Damien Hirst. http://www.damienhirstqatar.qa/en/fifty-six-spotsartwork 26. Playboy bunny and the concrete “box” and car just outside Marfa, Texas. http://hyperallergic.com/73377/why-isplayboy-erecting-a-neon-bunny-in-marfa-texas/ 27. 300 online art ventures. http://www.forbes.com/sites/ kathryntully/2013/03/30/would-you-buy-art-online/ 28. Pablo Delgado. http://artvandal.livejournal.com/141628. html 29. Banksy Tesco, 2009. http://www.fortunespawn. com/2009/05/08/london-2009---day-8---banksy-holiday 30. Banksy Sorry! The lifestyle you ordered is currently out of stock, 2004. http://streetartlondon.co.uk/blog/2011/12/12/ banksy-out-stock/ 31. Banksy Cross of consumerism, 2004. http://www. complex.com/art-design/2013/11/banksy-greatest-works/ consumer-jesus 32. ARTVANDAL at Kolomna, 2013. http://statigr.am/tag/ артвандал 33. “Pro Bono Promo” artist Dorota Pankowska. http://twentytwowords.com/graffiti-artist-paints-major-brands-logosaround-town-using-brands-products-paint-18-pics/ 34. Farhad Moshiri & Shirin Aliabadi Operation Supermarket: Tolerating Intolerance. http://universes-in-universe. org/eng/nafas/articles/2008/farhad_moshiri_shirin_aliabadi 35. Jani Leinonen End of an Ideology, 2013. http://www. showroomhelsinki.com/artists/jani/jani_leinonen19.html 36. Jani Leinonen. From the series All bad that happened to others is now happening to us. http://www.showroomhelsinki.com/artists/jani/jani_leinonen19.html 37. Jani Leinonen Death of Gucci. http://www.pinterest.com/ herykinkuvis/kantaaottava-taide/ 38. Jani Leinonen Shoes Liberation Army, 2010. http://janileinonen.com/ru/ 39. Liu Bolin. http://en.wikipedia.org/wiki/Liu_Bolin 40. Liu Bolin Alber Elbaz for Lanvin, 2011. http://www. moillusions.com/liu-paints-lanvins-alber-elbaz-jean-paulgaultier-and-others/ 41. Supermarket of Art. 2013, Vienna. http://www.wien.info/ ru/locations/supermarket-of-art 42. Artel Of Disabled Color Blinds “Artists-Pachkuny” Art For Various Classes Of Consumers. http://forum.artinvestment.ru/blog.php?b=202756 43. Art galleries of (rich) connoisseurs. 2006 http://irishnationalstud.ie/stud/1/stallions/ 44. Desire Obtain Cherish (DOC) aka Jonathan Paul Addicted At Birth. Mixed Media, 2012. https://www.facebook.com/ desireobtaincherishdestroy/timeline?filter=2 45. CF Art Group opened Point of receiving concepts from the population. http://en.wikipedia.org/wiki/Open-source_ software 46. The process of unwrapping the products. http://www. amazon.com/Unwrapping-Standards-Simple-Process-Manageable/dp/0970945558 47. Damien Hirst. http://www.damienhirst.com 48. Konstantin Latyshev Muscovite girls. 2000. http://issuu. com/artguide/docs/artguide_n1_web 49. Vladimir Kozhukhar Tekhnomarket III, 2004. http:// www.reginagallery.com/ru/node/864 50. Natasha Struchkova, #10 From The Series Futurussia, 2008. http://www.reginagallery.com/struchkova_natasha/ works/10_series_futurussia 51. Nikolay Ridniy Provisions, 2009. http://www.reginagallery.com/ru/exhibitions/завоеванный_город?work=722 52. Nikolay Vasilyev Tape art, 2012. http://street-tape-art.

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416 blogspot.com 53. Alain Guerra and Neraldo de la Paz. http://www.guerradelapaz.com 54. Ben Frost. http://www.designfederation.net/interviews/ interview-with-ben-frost/ 55. Dmitri Provotorov. http://www.winzavod.ru/galleries/ fotoloft/?id=510 56. Equivalent by Anastasia Kopytseva, 2012. http://archiv. artguide.ru/en/msk/events/1/4910 57. Garbage Panda by Alla Elesinova and Natalia Fomicheva. https://www.streamfinder.com/internet-radio-station/39745/ garbage-panda-garbagepanda-net/ 58. Afimall in Moscow attracts visitors with gigantic matrioshkas. 2010. http://afimall.ru 59. Dmitry Tsvetkov. http://www.krokingallery.com/english/artist_16.html 60. Michael Elmgreen and Ingar Dragset This Space Can’t Be Yours. https://www.perrotin.com/artiste-Elmgreen_et_ Dragset-32.html 61. Liu Bollin. http://www.theguardian.com/artanddesign/ gallery/2013/dec/29/the-invisible-man-liu-bolin-latest-artin-pictures 62. Banksy. http://banksy.co.uk 63. Icy and Sot. http://icyandsot.com/old/ 64. Gabriel Kuri, Trinity (Voucher in triplicate), 2006. http:// dailyserving.com/2011/04/gabriel-kuri-at-the-ica-boston/ 65. Holly Levell Supermarket Stitch. http://www.angelinthenorth.com/2012/10/16/stitching-sculptures-from-every-dayobjects/ 66. Art Group “EliKuka”. http://artika-project.ru/andy-warhol/ 67. Aestheticization of trash. https://www.zotero.org/groups/ lcenvs/items/itemKey/V5NSHS89 68. Zupan’s supermarket. Portland, Oregon, USA. http:// www.zupans.com 69. Art group Electroboutique. http://www.electroboutique. com 70. Hassan Hajjaj. http://artvandal.livejournal.com/140558. html 71. Natasha O’Connor. http://voices.suntimes.com/arts-entertainment/the-daily-sizzle/lyric-opera-exhibit-showcases-cait-oconnor-traviata-costumes/ 72. iMilk by Apple. Designer Peddy Mergui. http://www. peddymergui.com/exhibits/ 73. Ron English Super Supper, 2010. http://www.huffingtonpost.com/2012/03/12/huffpost-arts-interviews-ron-english_n_1335586.html?ref=topbar 74. Food Liberation Army. http://janileinonen.com/ru/ 75. Napalm blast. http://www.complex.com/art-design/2013/11/banksy-greatest-works/napalm 76. Stas Volyazlovsky exhibition Kiosk Between The Two Towers, 2011. http://artaddict.net/events/article/585/ stas-volyazlovsky-regina-gallery77. AES+F Feast of Trimalchio. http://www.flashartonline. com/interno.php?pagina=articolo_det&id_art=418&det=ok&title=AES+F 78. Egor Koshelev Oral Monstaz from series Phobia, 2009. http://www.reginagallery.com/exhibitions/phobia?work=KOS-00034 79. CF Art Group “the most expensive art object”. http://forum.artinvestment.ru/showthread.php?p=2266492 80. Vladimir Semensky. http://www.11-12gallery.com/artists/vladimir-semensky#works 81. Alexander Gronsky Background. http://www.alexandergronsky.com 82. Exhibition of Andrey Bartenev and Ksenia Sobchak “History of one centipede”. http://en.shoefaces.com/ksenia_sobchak.html LASTING NOSTALGIA 1–6. Martha Coe-Galeotti 7. Weiyuan Xu http://www.flickr.com/photos/xuweiyuan/1401126259/ 8. Blververas http://www.flickr.com/photos/71584862@ N00/1236117223/ 9. Katy Asinskaya

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TOWARDS A RUSSIAN AUTONOMY Welcome Schizophrenia: 1. Image of Dmitry Kostygin: credits Evgeny Dudin for Kommersant http://www.kommersant.ru/doc/2342361 2. Screenshot from Youtube videos: credits Russian Army Choir, Ikea Russia, Ikea UK http://www.youtube.com/ watch?v=qlOUBaTjTIc, http://www.youtube.com/watch?v=k5jVg_L9nPM 3. Ikea Italian advertising: credits Ikea Italia 4. Russian mall image: credits James Hill for the New York Times http://www.nytimes.com/2013/01/02/business/global/with-a-mall-boom-in-russia-property-investors-go-shopping.html 5. Kiosk in Moscow: credits Elena Comincioli Towards a Russian Autonomy: 1. Gloria Jeans website: credits Gloria Jeans lookbook 2014 www.gloria-jeans.ru/lookbook/20/ 2. Uniqlo adverts: credits Uniqlo http://www.uniqlo.com/ 3. Russian border: credits Wikisource http://upload.wikimedia.org/wikipedia/commons/0/04/China_-_Russia_Railway. jpg 4. Map of railways — credits Africabusiness http://africabusiness.com/wp-content/uploads/2013/02/Karta_Africa.jpg 5. La Moda: credits Bloomberg, name of the journalist www. businessweek.com/articles/2014-02-06/russian-web-retailer-lamoda-deploys-own-delivery-service 6. Map of Amazon warehouses: credits Amazon Careers website http://amazon-operations.co.uk/locations 7. Map of Ulmart centres: credits Ulmart website http://www. ulmart.ru/help/moscow/contacts#tab3 8. Moscow locations of Ulmart centres; credits Google street view 9. Kiva warehouse: credits http://www.kivasystems.com/