McKinsey & Company opens retail store in Mall of America
Consulting firm McKinsey & Company has opened a retail store at the Mall of America. The venture will test various emerging technologies and analyze customer behavior to help the consultancy better advise its retail clients.
The shop, dubbed Modern Retail Collective, opened on 27 September in the Mall of America in Bloomington, Minnesota – the country’s largest shopping center. McKinsey's retail outlet occupies the nearly 5,000 square feet formerly held by fashion retailer Abercrombie & Fitch.
The innovative new store from the premier strategy firm will test emerging technologies and omnichannel strategies which could help bricks-and-mortar retailers stay relevant in the age of Amazon. The initial partner brands will be four fashion and beauty brands – Elevé Cosmetics, Kendra Scott, ThirdLove, and type:A Deodorant. Current technology partners on the project include Microsoft, Square, and Zebra Technologies.
McKinsey aims to rotate brands and vendors approximately every three months, and to keep the store open for 12 to 18 months.
The customer experience at Modern Retail Collective will feature mobile hotspots to access product details and create a virtual shopping basket, as well as smart mirrors to take measurements for apparel fitting. Cryptocurrency will also be among the payment options at the store.
"Retailers are experiencing many pressures as they navigate the evolving retail landscape. As a result, stores are closing left and right, with more than 8,000 US store closures announced so far this year," Tiffany Burns, McKinsey’s retail stores practice lead for North America, said. "Modern Retail Collective will provide insights to retailers exploring opportunities to re-imagine the store through new in-store experiences and technologies that will enhance customer experience and overall store performance."
McKinsey’s research highlights that 60% of apparel "journeys" include a digital portion, whether for research or purchase. Furthermore, omnichannel shoppers tend to spend more, purchase more frequently, and engage over longer time periods than single-channel shoppers. Going omnichannel in an effective manner, then, becomes a pressing imperative for many retailers.
"Modern Retail Collective will unlock the power of multiple technologies working together to cultivate pioneering insights retailers need to transform their customer experience," said Praveen Adhi, partner in McKinsey’s Chicago office and retail operations lead, Americas. "Through this project, we’ll produce cutting-edge data and analytics to help retailers define their own vision for their store of the future."
McKinsey doesn’t expect to make any money on the store, instead treating it as an investment to collect valuable data – seeing what works and what doesn’t, where people spend the most time, and what they respond to most favorably. The insights, in turn, will help the strategy firm better advise its retail sector clientele.
Mall of America, meanwhile, will waive rent for the space, while the rotating roster of retailers will pay a fee to offset some of the consulting firm’s costs.
"Mall of America recognizes the importance of evolving the consumer experience and has been leading efforts to help current and new tenants alike succeed in the everchanging retail landscape," Jill Renslow, SVP of business development for Mall of America, said. "Modern Retail Collective will offer brands a flexible environment to test new technology and discover what resonates with their customers. We are honored to collaborate with McKinsey, such a well-respected innovator in the retail industry, on this endeavor."
