CEO The Store, The Americas
WPP's Global Retail Practice
The United States saw a rise of cities in the Industrial Age, followed by a pilgrimage of young families to the suburbs after World War II. But today we are looking at a far different picture.
It's well known that over 50 percent of the world now lives in urban areas, a figure that is on the rise. The move towards urbanization in the United States can be attributed to a number of factors, from socioeconomic causes to real-estate values. While these developments are complex, one key factor for brands is the continued development of the service economy and the growth of tech. Increased employment opportunities in America's cities, including with tech startups, combined with exorbitant real-estate prices, has created a number of opportunities.
The first involves new definitions of convenience. Younger singles, couples, and new families that choose an urban lifestyle are ripe for services and products that offer a faster, easier way to do things. They are willing to spend money to save time. As a result, brands are developing new solutions in the form of delivery services, higher priced prepared meals, and subscription services for bringing curated goods into the home.
The other big opportunity, which was perhaps first defined by Starbucks, is to create environments that welcome customers and allow them to stay, meet, and work. These are successful because urban consumers tend to have smaller living quarters and relish the opportunity to linger in comfortable environments. These new "third places" continue to make city environments workable for young people starting out.
Retailers in cities across America have also embraced the idea of creating “living room” spaces that incorporate community needs into their concepts. Designs for flagship stores, such as Nike Town and Lululemon, go well beyond expressions of a brand in uniform ways and have evolved into spaces that reflect community culture and aspirations.
In the book The Experience Economy: Work Is Theater & Every Business a Stage, authors B. Joseph Pine II James H. Gilmore showed that society has entered a new era in which experiences are more valuable than goods. Retailers and brands that recognize the mandate to deliver experiences contribute to a more interesting urban core: a new cityscape that mixes technology, culture, and wellbeing.
For example, Whole Foods’ urban formats bring these three together under one roof, with food, fitness, education, and community spaces in the same place. Others are mixing commerce and social events. Tom's Shoes recently launched Teen Vogue Night, which aims to bring activists, innovators and creators together for a better tomorrow.
In other words, cities are changing, and the brands that recognize and lean into new needs around convenience, experience, and community will be the winners—even as the changing urban core moves to wherever it will go next.