Arizona Retailers Experiment With Ways To Get More Of Your Money

Published: Tuesday, April 12, 2016 - 5:08am
Updated: Tuesday, April 12, 2016 - 10:46am
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Christina Estes
An employee rings up a sale at the Urban Outfitters CityScape in downtown Phoenix.
Christina Estes
Phoenix-based online mattress company Tuft & Needle recently opened its first brick and mortar store.
Christina Estes/KJZZ
Visitors to the Tuft & Needle showroom in downtown Phoenix can test out mattresses in semi-private rooms.
(Photo by Christina Estes - KJZZ)
Urban Outfitters located at CitySquare in downtown Phoenix welcomes many 25 to 35 year old shoppers.
Christina Estes
Shoppers at the Urban Outfitters store in downtown Phoenix are exposed to omnichannel retailing.
Christina Estes/KJZZ
Urban Outfitters store located at CityScape in downtown Phoenix.

On a sunny Saturday morning, dozens of people leave their beds to lie in someone else's.

Shea Talasmaynewa and Silvia Escobar walked into the Tuft and Needle showroom off 7th and Grand avenues in Phoenix where they were ushered into a dimly lit room and left alone.

“What we like to do is give you guys a few minutes to hang out and see how you like it," a Tuft and Needle employee told them before asking if they preferred the door open or closed.

“People appreciate the experience," CEO Daehee Park said. 

Park and his partner launched Tuft and Needle three years ago. In 2015, the online mattress company opened its first showroom at its corporate headquarters here in Phoenix.

"We started with one room, " Park said. "Instead of trying to perfect everything from the get-go, we opened the doors and let customers come in and interact with it and give us feedback and tell us what more they wanted.” 

They added more rooms to test the mattresses, a lounge area and bottled water. Tuft and Needle also collected feedback and used that to open its first standalone store in San Francisco earlier this year.

“We don’t know if that’s the first of many or the last one," Park said. "It’s purely still an experiment at this stage, but we’re optimistic about it.”

Traditional stores still make up the overwhelming majority of sales in the United States. According to the Census Bureau, ecommerce accounted for slightly more than 7 percent of total sales in 2015. But online purchases are climbing faster — rising nearly 15 percent last year compared to just 1 percent for retail. That’s led to some omnichannel retail experiments.

“It means we try to reach our customer on multiple levels, not just in a store face to face," said Jade Noble, manager of the Urban Outfitters store at CityScape in downtown Phoenix.

Noble said many of her 25 to 35-year-old customers are big into social media, so employees encourage them to post photos featuring their purchases or showing how they style outfits. Downloading the Urban Outfitters mobile app can lead to coupons and personalized offers.  

“Let’s say you come in once a week and you always shop shoes," she said. "It’ll send you suggestions of shoes or when we get in new styles or hey, you purchased these shoes. You might like these styles that are available online.”  

Not all customers would want this, but a 2013 survey by global business consulting firm Infosys found a lot do. Nearly 80 percent of consumers were more likely to buy again from a retailer that provided ads targeting their interests, wants or needs.

Then there’s this idea:

“The idea of pop-up shops, so shops that exist briefly," said Erin McInerney, vice president at RED Development in Phoenix.

She spoke at a recent Urban Land Institute conference and encouraged retailers and developers to find ways for people to close their laptops, look up from their phones and walk into stores. McInerney said stores don’t have to be traditional brick and mortar. They can move.

“Millennials, and again I think the larger economy, are demanding something special and a here today, gone tomorrow type scenario is special," she said.

Back at Tuft and Needle’s showroom, Escobar and Talasmaynewa are ready to buy. They can’t walk out with a mattress, though. Tuft and Needle only takes online orders. While Park doesn’t see that changing anytime soon, he is definitely in the never-say-never crowd.

"How we view things is we’re agnostic to the channel," said Park. "The channel might be online; the channel might be brick and mortar and in the future maybe there’s something else that we don’t even know that’s coming. You know, maybe we’ll do some kind of virtual reality shopping or something."

The key, he said, is flexibility and being wherever customers want them to be.