style in progress 1/2023 – Susanne Tide-Frater & Raphael Gielgen

“CITIES HAVE TO CONSIDER THEIR FUTURE FROM THE FUTURE’S PERSPECTIVE”

Empty storefronts, non-shoppers, boredom: heavy problems seem to drown city centres and their retail landscape. And the bigger an issue, the wiser it is to broaden your view when looking at it. That is why this discussion about the future of city centres does not feature store owners and their landlords, but a trend scout and a retail strategist who share a reputation as visionaries: Vitra’s Raphael Gielgen and Brown’s Susanne Tide-Frater (read more about them in the bios attached to their pictures). They discuss retail concepts that attract new generations to the city centre, find the key to bringing back foot traffic, voice their opinions on the role of governments, and the notion of turnover per square metre, and they also reveal what will be more important for a store than the actual goods.

Panel host: Stephan Huber. Text: Petrina Engelke. Illustration: Tibo Exenberger@Caroline Seidler

Let us start with my personal view of the future of city centres. I believe a lively, diverse, and, of course, economically sound retail structure is the cement that holds cities together. Would you agree on that?

Susanne Tide-Frater: Of course, absolutely. I am an archaeologist, so I know that from early Greek history. The marketplace, the agora, has always been where exchange takes place. And I do not think you can take that away. Secondly, I have always believed that the future of retail depends much less on the offers but rather on how we as humans live, how we work, and how we play. And I think this is now truer than ever. The pandemic, as well as economic and social issues, may have accelerated this development, but I believe it was already underway. Retail as we know it – you know, a store full of goods presented on a rigid fixture, selected by a buyer – just does not appeal to new generations, as that is not how they function. They enjoy concepts that combine spaces, where they can spend time, be entertained, browse, and exchange. This interaction is extremely important. However, I think the current retail proposal very rarely considers this. So that is my first observation: we need to change.

Raphael Gielgen: I think our future will be dominated by a generation of people who no longer identifies with buying more and more things. I believe we are entering the era of the non-shopper, and a next generation of creators. They do not necessarily all want to produce something themselves, but I would say producers will be more accepted when they participate in a circular economy and work out of the web 3.0, giving smart actors visibility through decentralisation.

Do you think this will happen swiftly?

Raphael Gielgen: Yes, for two reasons. Number one: 90 percent of people 20 years and younger spend most of their time on Twitch, on TikTok, et cetera, and their attention is much more absorbed by extended realities, also known as augmented realities (AR), than by any physical realities. Number two: our economy is in dire straits, and this could be a turning point, again – in the same way that the Covid crisis changed our work life. In order to go to work, it does not matter anymore where you live or where you are at the moment. I believe change will be jumpstarted by this cocktail, mixing the economic situation and the growth of web 3.0. At the same time, well thought out physical retail gained in strength during the pandemic, because it allowed for personal interaction.

Susanne Tide-Frater: I think this opposition that we lived with for the last 10 years, you know, physical versus digital, that is completely caduque. It is over. These two are inseparable. Stores will remain important as an entry point or a gateway to the brand, as they provide a possibility of encounter and trying things on, a possibility of physical interaction with a product and even other creators. I believe that this will remain extremely important, and one will be intertwined with the other in a future metaverse, which will actually be enriching for, rather than competing with traditional retail. I do not even want to call these new concepts retail concepts, because they might be part of clubs or wellbeing places where you incidentally shop something, yet you might have pre-selected the goods online.

Raphael Gielgen: Right. During the last three weeks, I was in New York, Boston, Seoul, and Tokyo, looking at what is going on in this regard, for example at the Pan Am Store in Seoul. These stores are like museums, only perhaps 3 percent is retail. They do not match the term “retail” anymore, just like the office is no longer an office. And look, I am 53, I do not belong to the group these concepts cater to. I suppose none of us three does. Compared to us, they live on a different planet, and their own rituals are the only thing that brings them together physically.

Susanne Tide-Frater: Exactly.

Raphael Gielgen: And their rituals are not similar to the rituals we had 10, 15, or 20 years ago.

Absolutely. What does all that mean for the role of city centres and their future development? Raphael Gielgen: A major current issue for city centres, especially in big cities, is a loss of traction, a loss of professionals and commuters, and a loss of tourists and peo-ple nearby. City centres are not frequented as much, and this challenge cannot be solved by a large developer. It can only be solved by a joint commitment to come up with new ideas, involving local authorities, landlords, and developers.

Susanne Tide-Frater: Yes, Raphael, I think this is the key. It matches what I have observed. As long as landlords and city councils focus so hard on turnover, they will not revive city centres. They need to take time to invest into the future and bring in young entrepreneurs rent-free. They need to foster exciting new concepts, like hubs. Otherwise, city centres will never be revived again.

Can you give an example of such a new retail concept that might help revive a city centre?

Susanne Tide-Frater: I believe that even talking of retail is probably misleading. These are hubs. Let me give you an example that has been around for a while: Soho House, a chain of clubs that originally were workspaces. They then became a communication space where people could meet, like an out-of-office office. They now have wellbeing hubs, health, food, music, entertainment, and they also include spaces where you can buy furniture or fashion. Yet it is not a store at all. It is a club. They understood the importance of interaction very early. But what Soho House is lacking is an incentive for creators. I think new store concepts need to offer that as well.

What about digital technologies?

Susanne Tide-Frater: For me, everything is omnichannel. You have to be able to enter the brand, rather than the store, at any moment from anywhere. However, I think service is still extremely important in this new retail world. So, you get to have your own experience in the store, but you do not take products with you, they will be delivered to you wherever, whenever. I mean, for obvious reasons, nobody will go into the city centre by car anymore. Discovery will be the city centre’s appeal and delight. So any brand that wants to maintain a physical space in the city centre has to really think about very distinctive, exclusive elements which can only be offered there.

Does that mean consumption will become a side effect of the overall experience in a city centre?

Susanne Tide-Frater: Yes. And yet, even now, many stores still have that notion of turnover per square metre, which kills them. I find that surprising. After all, anything you do in a physical space will translate in turnover eventually, but that is not directly linked to the actual retail space. And if retailers and brands do not start thinking very differently about this, their retail will be dead. This is why big chain stores no longer exist in city centres, as I just observed on London’s Oxford Street. These stores have nothing to offer that goes beyond what could be bought online.

Raphael Gielgen: And by the way, if you only offer an average or mediocre experience, then convenience is the driving force. Like ordering food: you only want to have food, and someone brings it to your house. That is not experience, just convenience.

Susanne Tide-Frater: Exactly. Sure, convenience is a strong driver. On the other hand, is not convenience also the killer of creativity?

Raphael Gielgen: No! Because there are people who do not care about creativity and experience. They just want convenience. Just like some people want to consume what you would consider junk food.

And we have to deal with it.

Raphael Gielgen: Yeah, sure. And there is this idea of big brands serving several social milieus, but even that is over. You have to have an attitude, you have to be clear and really precise about who you are, what you produce, and what you want to offer as a service, as a product. If you do that well, you have a message. And if you have a message, you have the content for omnichannel. But if you do not know who you are, if you have no position: game over.

How does the rediscovered focus on local products and on cultural connection, as opposed to the earlier utilisation of globalisation, fit into the trends you are observing, Raphael?

Raphael Gielgen: I think that aspect has been existing for a long while, out of several perspectives. One perspective could be driven by authenticity. Another perspective could be driven by sustainability. Another one could mean supporting your local community.

Susanne Tide-Frater: It is not all about small and local artisans, however. One aspect of this is suppressed culture, and I think that is another opportunity. A redefinition of culture has to be underway, as the global Kardashian magma is hardly going to interest anybody in a few years. Culture, identity, community, and small initiatives are going to be emotionally important for this generation.

Raphael Gielgen: But in the end, these kinds of activities are comparatively small. I, too, love the “buy local” movement, but that could never solve our issues and serve our demand. If we all started to really focus on local products only, we would have to face massive economic questions and problems. Globalisation, on the other hand, was a good idea, but we turned it into modern colonialism. We, the developed countries, tried to generate the highest profits by getting cheap labour, cheap energy et cetera elsewhere. Sure, we also brought some progress and prosperity to these countries, but that was not the idea behind globalisation.

But do we not see right now that our economy has to change anyway, for pragmatic reasons?

Raphael Gielgen: Yeah, sure. I think the best example is what Patagonia has done. An economical change towards future markets full of opportunity for everyone means a change of both the system and its actors. It is like learning a new language: new grammar, new phonetics, new words. It is totally different. I would say in 10 or 15 years, 30 or 35 percent of companies will be part of a Patagonia style economic system. And leading business schools like University of St. Gallen or MIT Sloan in Boston will teach this approach. Will this still be a market economy?

Raphael Gielgen: Yes, it will be one, but with different mathematics.

The way we work now seems to change cities, too. In London and in Frankfurt, whole districts are changing because people do not go to their offices like they used to. What is this new way of life doing to city centres as former epicentres of daily life?

Raphael Gielgen: I think there is no single answer to that question. If you talk about financial districts, yeah, financial districts are dead. But not every city is driven by financial businesses. Paris, for example, will always be a vibrant, energised, and liveable city because the code of Paris is different compared to Frankfurt and London. Or look at Helsinki: it is only a small city, but I honestly believe Helsinki will be fine, because it has given itself a purpose beyond business and offices. Cities have to think about their future from the future’s perspective, not from today’s perspective. They will fail if they start designing their future from their status quo, trying to reinvent themselves within the limitations of what already exists. That will never guide us to a kind of preferred future. Instead, we have to jump into the year 2032 or 2035 and think about what will exist then, and how that could help us redefine who we are. From our future city’s perspective, what are our key activities? Why do they feel authentic to us? Why does this have value for every citizen? And who is a partner of this ecosystem, be it culture, business, or education?

Susanne Tide-Frater: Very, very well said, Raphael. Now, I know Birmingham City Council very well from my work with Selfridges there in 2004. And I would say that these people do not necessarily have the educational background to think that way. How would you tackle this? How would you advise a city council?

Raphael Gielgen: I would say they may not be trained in broadening their view. But designing the future from the future is not an intellectual approach, it is a hack. So, I would advise them to surround

themselves with insights which already exist and then, to get out of this frame, describe the impact before creating a map of actions. If they start to design the future from the future, they will come up with an image and get people involved who never wanted to be involved before. Are we now talking about a reinvention of democracy, too?

Raphael Gielgen: If you want to call it that. I, however, would not. It makes this approach seem much heavier and more difficult to understand.

Susanne Tide-Frater: What we are saying is that, actually, it is not about retail as such, but it is about regenerating the purpose of city centres.

Do you both think that politics, government, or legislation should be more influential in this transformation process?

Raphael Gielgen: I am not a fan of regulating everything through taxes. Sure, due to our resource situation, most of our lives must become circular. Not tomorrow, but in the near future. But I think giving guidance through a broader vision will create turning points, rather than giving guidance through permission and taxes. But do you think a critical mass of people will change their behaviour driven by purpose alone?

Raphael Gielgen: Not overnight, no. Just look at big fashion retail platforms’ share prices. These are an important indicator of which path our industry will and will not take. We are now entering a phase with lower consumption in major parts of the world. And this is an opportunity. We know that people are rethinking what they do and are starting to change course, but this takes time.

Susanne Tide-Frater: I agree, but that will not come from politics. It will be due to pressure by the generations of the future and by wise companies. Admittedly, there are not a lot of them. Having a sustainability officer is just a patch. Political solutions face the problem that representatives in a city council are elected for only a very short period of time. So they are not prone to long-term plans. That is why I think the solution will only become political if there is pressure.

Raphael Gielgen: I have a good example. The real estate industry in Europe is faced with ESG requirements. These requirements clash with older buildings, where the landlords never invested in upgrades like insulation, energy efficiency, and so on. By now those upgrades have become too expensive, so these buildings turn into stranded assets, because large corporations do not want to invest in loans or other activities in this part of real estate. And that shows you how a market regulates itself.

What does that all mean for the role of city centres in the near future? Should retail be afraid?

Raphael Gielgen: (laughs) I do not believe that all the players and stakeholders in the retail business are asleep at the wheel. They know about the current situation, and they know what lies ahead of them. I think what is happening now is a struggle between vision and risk awareness, between rebels and balance sheets, and between leaders and managers. We will see who will succeed.

Susanne Tide-Frater: I think pure retailers will struggle unless they become a company. I do not want to use the term “brand”. And I think a lot of them will not have the market intelligence and vision to succeed. That is necessary to regenerate not only a retail scene, but an architectural environment that houses many, many other things. I think there are plenty of opportunities for those who really want to succeed. But not without, as Raphael phrased it, shaping the future by looking into the future.

SUSANNE TIDE-FRATER: In a nod to her formal education, Susanne Tide-Frater refers to herself as an archaeologist of the future. As a sought-after retail consultant, she has a track record running from rejuvenating UK department dinosaurs Harrods and Selfridges to overlooking augmented retail at digital disruptor Farfetch.

RAPHAEL GIELGEN: Trend Scout Future of Work Life and Learn: That is Raphael Gielgen’s title at Swiss furniture design legend Vitra. Officially, he lives on a sustainable farm near Regensburg, but, in reality, he spends most of the year on the road, visiting cities around the globe to observe the most exciting developments.