The few times I’ve been to the Oculus mall in downtown Manhattan, I’ve had the same feeling that I have whenever I see a horrible big budget movie, “How could so many people not have realized that this was going to come out terribly?” This article in Curbed, excerpted below, goes into the details of the challenges that the space faces. Real estate investors are sometimes geniuses, and sometimes not.
“The challenge [not the only one – FL], says Greg Portell, a partner with the retail practice of management-consulting firm Kearney, will be catering to the commuter crowd, officegoers, and area residents without turning off the mall’s other constituencies — destination shoppers including tourists and residents from other parts of the city who are looking for an exceptional experience. ‘They’re down in the World Trade area. You don’t want a bunch of low-end stores,’ he says. ‘You want people to go down and go, ‘’Wow, this is amazing.” Not, “Oh, I picked up a can of soup today. Unfortunately, you don’t really get to choose because all three of them are there,’ he continued. ‘You have to tailor it to all three because word of mouth is a powerful driver.’ In other words, if the Oculus starts being seen as a discount, convenience hub, you might lose the shopper looking for a unique gift.’”
Next, a longread by a writer who has lived in China for 20 years, and recently visited after having been away for almost a decade. It documents what life is like there—basically, a lot different than ours. It’s a consumer’s, but definitely not a worker’s, paradise. The whole piece from China File is fascinating. The pull quote below gives both the flavor of the piece and a summary of some of the writer’s findings:
“The excellent quality of the food—and the swiftness of its arrival when ordered by app—is also connected to involution. A friend who owns a chain of restaurants told me he has to constantly offer discounts and do special promotions because all of his competitors are doing it. Chinese consumers find and buy almost everything online, and the algorithms feed them the best deals. Customers also rate restaurants ruthlessly on the apps, so lower prices do not mean a tolerance for lower quality. Every yuan is harder.”
A key takeaway that is implicit in the piece: the apps/price discovery/pricing pressure/no barrier to entry dynamic means that Western brands should definitely not count on China as a growth driver.
Faye Landes advises emerging consumer companies, including footwear, apparel and accessories brands, on-line retailers, and fitness concepts on general strategy, hiring, scaling and fundraising. Faye’s work is informed by her career as an analyst at Cowen & Company and Consumer Edge Research as well as her time as a guest lecturer at Princeton’s undergraduate course in entrepreneurship. To join her Weekend Reading mailing list, sign up at faye@landesadvisors.com.
