Trendwatch 2020: The Renaissance Of Brick-And-Mortar Locations As Ad Space

Traditional brick-and-mortar shopping offers customers more than an opportunity to purchase—it’s a chance to have a personal interaction with a brand. From the unique way a brand merchandises items down to the lighting and design, music and employees, a brick-and-mortar store experience is just that: an experience. As customers continue to move towards a digital landscape, brands are exploring new ways to break through the digital noise and offer customers tactile, sensory, and personalized experiences—effectively turning built environments into ad space.

Similarly, commercial real estate developers, architects, and investors are exploring new ways to reinvigorate historic, underused, or shuttered spaces that once served traditional brick-and-mortar purposes but struggle to remain robust in a digital economy. Brands and real estate developers alike are turning to firms like Skylight, a placemaking and venue development firm that combines adaptive reuse, redevelopment, and forecasting to transform traditional and struggling commercial spaces into immersive brand experiences.

Skylight specializes in developing “intentional short-term real estate opportunities” for brands—most often activations, pop-ups, and launch events. Conceptually, these opportunities are designed to reenergize an underutilized built space and give customers a tangible experience with a brand. Over the last decade, Skylight has developed brand experiences for such companies as Amazon, Hermes, Nike, Hulu, Spotify, and Tesla. Brick-and-mortar locations include The High Line, St John’s Terminal, the Historic San Francisco Mint, the Row in Los Angeles, and New York’s Bleeker Street corridor.

We recently sat down with Stephanie Blake, CEO of Skylight, to learn more about the firm’s approach to brick-and-mortar and her thoughts on the ongoing push and pull between built commercial spaces and the digital economy.

Skylight is known for creating what you refer to as “intentional short-term real estate opportunities.” What do you see as the benefits to this approach?

SB: Intentional short-term real estate opportunities are the physical manifestation of the “drop” economy. It’s a disruption (and re-imagination) in both real estate and retail / brand approach to innovation and development.

It’s not replacing permanent brick-and-mortar concepts, but it is reimagining the industry in the way co-working companies changed the way we use office space and share ideas and resources to promote innovation…In a world where new collaboration, co-creation, and constant iteration is needed to maintain consumer interest, short term real estate plays provide the platform to showcase these moments while gathering intel and insights that inform the next move.

For example, Skylight worked with Nike and Virgil Abloh to find a home for their Nike “Off Campus” experience, which was created to showcase a collaboration between Nike and Off-White. Skylight brought the multi-day activation to 23 Wall Street, the former home of JP Morgan. The event, which included an immersive museum, programming, and a retail space, sold out almost immediately.

Short-term real estate opportunities have allowed brands the short-term flexibility to take RISKS and EXPERIMENT with different concepts, based on the willingness to suffer losses if costs are significantly lower.

Can you talk about your statement that one of the biggest real estate trends for 2020 will be the utilization of the physical and built environment as ad space?

SB: Storytelling is more important. The built environment provides something that screens cannot. There is a desire to reach consumers where they are with these stories, and brands are taking notice of the way audiences go about their daily routines, particularly in cities.

The physical and built environment can be utilized as ad space. At Google over a decade (15 years) ago, the focus used to be ‘how do we convince brands to move spend from traditional media to online?’ The pendulum is swinging back, but now with new tools informed by digital products and the growing importance of data.

Brand communities, referring to any investment of time or money that customer makes into a brand beyond purchase/transaction (think Harley Davidson die hard fans getting tattoos of the brand + meeting with other fans) is the most valuable brand equity that brand aim to achieve. Skylight has followed this shift first hand through our event and client experiences; while brands historically spent marketing dollars on traditional product launches and showrooms, we are noticing a transformation to experiences that aim to form brand communities and bring fans together.

For example, The Stalls at Skylight ROW DTLA hosted a sprawling, multi-sensory production in support of Billie Eilish’s debut album. The Billie Eilish Experience welcomed over 3,000 devoted fans for a weekend of art, technology, and the unexpected inspired by the artist’s own experiences with synesthesia. Conceived by Billie Eilish herself, and produced in partnership with Spotify and Adobe, the former produce stalls were transformed into immersive rooms imagined along the themes of the tracks on her album, “When We Fall Asleep, Where Do We Go?” This provided a tangible experience in which Billie could demonstrate her unique point of view as an artist, celebrate a career milestone, and give fans a platform for engagement and community in her home city.

What are your thoughts on the future of traditional brick-and-mortar retail?

SB: Cities were built around adjacencies—the pop-up economy responds to this by sharing space within communities and affinity groups…ALL brands need to consider a physical space, even e-commerce, direct-to-consumer brands still seek out brick-and- mortar opportunities to reach consumers.

Multi-brand formats, and even store-in-store residencies that showcase a brand and its partners / collaborators embody the co-creation model where 1+1=4. There should be core pillars or elements that give the brand environment a specific messaging and point of view, or some defining element that differentiates the store from others in a very competitive retail landscape where it is more difficult to get customers in store.

For example, Skylight created an urban landscape at the intersection of art, commerce, and culture: Love, Bleecker, a collective of locally-based, digitally-native brands, each paired with contemporary artists.

Eleven new brands have joined the corridor since Skylight debuted the project, resulting in a 63% decrease in vacancy with brands that share audiences and similarities to Love, Bleecker’s tenants. Skylight created and ran a comprehensive programming calendar engaging the neighborhood residents and NYC locals, and fostered community amongst the merchants. Over 120 unique events filled the corridor, igniting community building and experiential retail.

It’s interesting that digital brands are embracing the built environment. What is driving that?

SB: Digital saturation has spurred a movement toward IRL experiences for brand engagement with consumers, but it’s also informed the way that we approach them. Just as A/B testing is essential for innovation in the tech space, in-person interactions across a variety of markets, demographics, and formats / settings is crucial for companies to keep pace with breakneck changes in consumer preferences and behaviors.

This post first appeared on Forbes.com. To see the original, click here.