What: Tal Zvi Nathanael, C.E.O. and founder of the innovative Showfields retailer is interviewed in Global Retail News.

Why it is important: Many department stores want a flexible and hybrid retail, but that move requires many specific talents they don’t have in-house. By partnering with “The Magic Box”, a new pop up programme, they accelerate their ability to innovate.

Showfields started in 2019, and currently has 2 stores in New York and Miami. Occupying nearly 1,500 sq.m of sales area across 2 floors, each shop has an area dedicated to art, F&B, a bar and a modular event space, and hosts about 80 brands. New brands which had never been on public offer before are also curated. The assortment is constantly changing, with a theme change every 6 months. In June 2021, the Showfields.com platform, which is a multi-vendor marketplace, was launched.

What is your turnover?

TZN: We do not disclose numbers but I can tell you that Showfields has been profitable since day one. We have a staff of 70. The majority are for marketing, designers and IT engineers.

How does your commercial agreements with brands work?

TZN: Our business model was devised to allow a low barrier of entry for both DTC brands that were considering brick and mortar as well as brands looking for space to experiment with new concepts. Brands pay a monthly membership fee to appear at Showfields (in our physical stores, shop-in-shops and on our website). Brands can rent a space from USD 2,000 to USD 12,000 per month, for about 10-25 SKUs. The fee is not proportional to turnover as Showfields does not apply variable rents. The most important aspect for us is to remain independent in our choices. When we list a new brand, we prefer to ask ourselves: “Will it be really innovative for our customers?” rather than “Which brand will sell the most”?

Data is at the very heart of your business model. Can you explain this?

TZNl: Like any retailer, Showfields collects a lot of data, and we share it with brands as part of their membership. Brands know how many visitors entered the store, what are the associated email addresses, etc. We give them the exact same K.P.I.’s as those that they gather on a website. Our data includes street to store conversions, inside store traffic, impressions, engagement, sales, e-mail (C.R.M.) and experience interactions.

What is the potential of retail media?

TZN: Retail media used to be off a retailers’ radars, but that’s changing as margins erode. Online retailers are more advanced in this area. But all retailers should have to look at Amazon’s and Walmart’s strategies to understand the value potential of data. Thanks to this data, retailers allow brands to build and offer a tailored experience for customers. Retail media explains, in part, the rush to open digital marketplaces that we are seeing in Europe, already far more advanced than in the U.S.A.

There are many silos to break through amongst retailers, brands and media agencies. What is the next frontier in this area?

TZN: For me, the goal is to have an offer that is as personalised offline as it is online. The next frontier will be when retailers offer a fully integrated media platform by giving visitors a different in-store experience that changes as matching profiles develop.

Why did you create Showfields?

TZN: Many stores were no longer capturing the customer’s attention. At the same time, the cost of entry into brick and mortar is prohibitive to brands. DTC brands eager to open a pop-store in Soho (for instance) would have to pay at least USD 100,000. At Showfields, costs are 10 times lower. Our goal is to remove the barriers to entry so that brands can make inroads into physical retail.

What about Showfields’ expansion?

TZN: By the end of 2021, we will open a 3rd store in the U.S.A. as well as 1 in Asia. In addition, we are launching a pop-up program called “The Magic Box”. We aim to set up ‘shop-in-shops’ for shopping centres, department stores and hotels. The model says that retailers don’t buy the inventory. We act as a partner, not as a tenant.

Showfields in Global Retail News