A new Third Place:
The retail-lifestyle hybrid

Okay, first notice that I am purposefully not using the word ‘experience’. We are past that. Now we can get to the fun, imaginative and inspirational retail world that is blending with lifestyle spaces to make everywhere we go an opportunity to socialize, explore, and be productive.

The idea of ‘The Third Place’ was commercially popularized by Howard Schultz of Starbucks, but also discussed in psychology as places where people find community. However, and particularly in light of recent news, Starbucks may have relinquished its previously secure position as a safe and enjoyable space between home and work.

The New Third Place

Here at Magid, we’re starting to see this blending of retail into common areas everywhere we go. In NYC alone, there is a laundromat with pinball and a bar, and you can hardly stroll through a public park these days without smacking into and snacking through a gourmet food market like Smorgasburg. As we mentioned in a previous article, the first ever nap cafe has opened in NYC and with it, a cafe of healthful menu items that can materialize with a few taps of an iPad. There are also several WeWork co-working locations that regularly rotate in promotional partners who serve up everything from health services to cheese tastings.

In our exploration of these types of spaces, we also conducted our own little ethnography of the new concept shop Story, which has recently etched out a ‘work space’ as part of their playful storefront that features a curated new crop of products every couple of months under a specific theme. Currently, Story is dressed up in business-casual products and outfitted with several ‘deep work space’ cabinets, that were rather tiny, as well as an open-area with couches on the showroom floor. The space is free to book and comes with complimentary WiFi and Master & Dynamic headphones. It’s no wonder that Macy’s has just swooped in to buy the company as it has a lot of potential for the larger brand. The multi-use of the space is extremely smart and ripe for a large brand to pick up on, if done well. If Story continues to dress up as a Third Place destination, here’s to hoping they work out a slightly larger, more accommodating area for people to spend more time. More time in the store means more time with the brands.

What’s driving this trend?

This mashup blend of retail/social center/workspace speaks to larger shifts that we’ve seen coming down the pike for years. Schultz was on to something with The Third Place, and to me one of the fascinating things is what has driven these changes.

• The rise of freelancers—More and more of the population are working freelance or remotely, which coupled with the rise of living in smaller and smaller spaces in cities makes the rise of alternative spaces make sense.
• Traditional retailer woes—Retailers big and small are suffering as consumers move to digital. In NYC, many storefronts are empty. Many retail brands are scurrying to marry experience with brick and mortar to try and make themselves relevant again but struggle to find the right formula.
• Growing need for work/life balance—As the work v. life walls continue to crumble and as the Millennial tidal wave breaks over the workplace, the desire for work aesthetics/values to mirror personal preferences has become a priority.
• Desire for community (just as there’s a decline of traditional avenues for community)—Many of the “joiner” type organizations that dominated the landscape of Boomers are a lot tougher to access, if not extinct. The sense of community connection was built through engagement with civic organizations, churches, social groups, and even bowling leagues. Into that void comes new ways to create a sense of belonging and community.

All four of these trends have been out there for years, but when you think of all that we are observing with these work/social/retail spaces it brings them together in a real way. Generational dynamics add rocket fuel to every one of these trends.

Where will this go?

Given the trends listed above and the need that physical retailers have to engage with their customers, we anticipate that many traditional retailers will test similar concepts. An important first step in this process is for retailers to first understand the core need their concept will address versus creating an experience just for the sake of an experience.

Observing cutting-edge Third place options has got me dreaming up more ideas I wish would come about. This is only the beginning, after all.

Instead of just an Amazon brick and mortar store, could it also be a local library? Could the DMV be a showroom for BMW/MINI  to test drive during your drivers license exam? It may be too many federal regulatory hoops to jump through for that integration for now–but one can dream. And this type of collaboration is imaginative and fun–for brands, consumers, and communities. It adds convenience and adventure, and it makes retail exciting again. It’s experience alright, but with purpose.