The New Rules In Retail

Mobility. Convenience. Exclusivity. By drilling down on these shopping concepts, entrepreneurs and new business leaders are reaching out to the public in ways that traditional retailers cannot.


The experience of going to the store to make a purchase is rapidly being transformed. Both eager entrepreneurs and seasoned industry stalwarts are expanding beyond the standard brick-and-mortar experience. Retailers have gotten creative in the ways they reach their customers, appealing to their desire for convenience and curiosity for new experiences.

For example, Callahan & Associates is located at the corner of K Street and 17th Street in Washington D.C. These streets make up two sides of Farragut Square, a busy daytime commercial and business district. And Farragut Square is just one part of the Golden Triangle Business Improvement District, home to busy Metro stations, upscale dining and retail options, and countless high-profile organizations — including law firms, national associations, and political lobbyists.

Commercial real estate here has never been cheap and the cost of establishing a full-time presence can be quite the barrier for many new businesses. Yet, one can also walk around Farragut Square and find many examples of entrepreneurship— industries and individuals who have found loopholes in shopper expectations by refusing to play by traditional rules.

These upstarts are the new face of retail in the 21st century, and their success has big implications for all types of established business models, including financial ones. Below, we profile three distinct paths in the evolution of retail and explain while thinking small and maneuverable may not be a bad thing after all.

Shwarma And Banh Mi To The Right, Pizza And Frozen Custard To The Left

When I have friends and family come for a visit, I like to bring them to Farragut Square for lunch. I can throw a stone from my office window and hit two Subways, two Au Bon Pains, a couple killer delis, and an amazing Indian buffet. Still, I prefer to take my guests to the food trucks that line the curb every single day.

The phrase “food trucks” used to conjure a couple of unappealing mental images. These included the rolling “roach coaches” that haunted construction sites with their tepid coffee and sandwiches as well as the ubiquitous “dirty water” hot dog carts found at many major downtown intersections. But in an age where multiple television networks (and dozens of major primetime shows) are devoted exclusively to the preparation and consumption of foodstuff, the culinary elite and skilled up-and-comers have turned to the formally humble mobile kitchen as a legitimate way to bring their dreams to the masses.

A thoughtful look back will reveal that mobile food has always been a critical part of American history — from the chuck wagons that helped explorers conquer the West to the calliope sounds of every child’s favorite, the ice cream truck.

But according to Smithsonian Magazine, the modern food truck revolution began with taco trucks in the suburbs surrounding Los Angeles. Early foodies discovered that some of the best local fare could be bought from these non-descript vehicles.

By 2009, food truck revenue had grown to exceed a billion dollars annually across the globe, according to Forbes, and this growth shows no signs of stopping anytime soon. At just 10-33% of the cost of a brick-and-mortar location, these affordable options have opened the gate to a whole new segment of small business owners.

But the medium has also been adopted by some of the most powerful players in the food service industry. Chick-Fil-A, Panera, and Taco Bell have all pursued different food truck strategies to get new products to the public or reach areas where they do not have traditional locations.

The Credit Union Takeaway: Be Mobile
Mobile strategies don’t always have to hinge upon cell phones or self-service options. Sometimes, being convenient requires actually being there in person. For a small portion of what you’d pay for a traditional branch, you can secure a RV or other vehicle with the necessary equipment to serve members wherever they are. Or, you can use these locations as back ups if normal branch operations fail due to hazardous weather or other disaster.

Put A Dollar In The Slot. Get A Cupcake

In addition to making sure I have my house keys, work keys, and wallet in hand before I leave the house every morning, I also make sure I have a couple of shiny quarters or crisp dollar bills in my pocket. As a non-coffee drinker, I have to hit up my building’s soda machine for my morning caffeine fix if I want to be anything approaching productive during the day. Of course, vending machines are not just supplying soda and junk food these days. Retailers from around the world have found that they can manage inventory from a central location and use vending machines to distribute their products successfully.

The National Automatic Merchandising Association traces the origins of the modern vending machine back to 215 B.C., when an enterprising Egyptian invented a device to dispense temple holy water in return for a coin. The timeline then jumps to the 1880s, when booksellers in the United Kingdom began to use coin-operated machines to dispense postcards and tobacco boxes.

America’s first exposure to this technology was in the form of small machines that sold gum on New York City train platforms. But by 1902, entire coin-operated restaurants (called “automats”) had opened in Philadelphia and other large cities. As the decades passed, it became even easier to find walls of machines ready to serve up everything from snack food to ready-made sandwiches, junk food, and cigarettes.

For the longest time, these machines depended upon the consumer having the ready cash and coin to make a purchase. But the arrival of card payment technology didn’t just make these purchases simpler; it also allowed vending machine companies to move beyond small or disposable items to a whole new category of high-quality (and high-cost) goods.

Examples include Rollasole compact shoes for the lady who is tired of toddling around in heels, or a fresh-baked cupcake after the trendy Sprinkles bakery has closed. Have you run out of your Proactiv skin-care system? No need to wait for a new shipment to mail — just pick one up at the closest kiosk.

While a variety of business practices and changes in the entertainment industry have led to a continuing decline in revenue for video-rental chain Blockbuster, the arrival of Redbox machines at stores across the country surely played a part. With a touchscreen and a card swipe, anyone can now rent a new release movie or video game for less than $2 a day without membership or late fees.

The Credit Union Takeaway: Be Efficient
Members aren’t opposed to self-service. In many cases they actually prefer it, especially when it comes to transactions or other low-value interactions where speed and efficiency are key. From using remote video tellers units to cut down on wait time in branches, to dispersing gift cards, stamps, or other goods through your ATMs, credit unions have a whole host of options to make self-service not just easy for members but profitable for the institution.

Here Today, Gone Tomorrow

This past summer, you could always find a Callahan employee or two spending their lunch hour in Carpe Librum, a pop-up retailer around the block from our offices. For a few months out of the year, a local non-profit used this space to sell used books, CDs, and DVDs.

It was a great place to get a bargain, all while supporting the District of Columbia public school system.

“Pop-up retail” or “flash retail” is the trend of opening a retail or restaurant location on a short-term basis. The name pretty much explains the trend — a new store just “pops up” one day in a previously vacant spot. It remains open anywhere from a few days to a few weeks, and then the opportunity is gone in a “flash,” so to speak.

At the moment, it’s a very chic concept. During the winter season, WIRED magazine opened a pop-up store in New York City featuring the latest gadgets, gizmos, and electronic devices on everyone’s gift list. Studios have also commissioned entire storefronts to promote the premieres of certain movies and sell exclusive merchandise.

The concept is also popular with new product launches. Companies like Baublebar and Fleur de Mal have put their toes in the proverbial retail sales water by using flash locations to introduce their new, respective jewelry and lingerie products. Likewise, Nestle opened a pop up coffee shop to introduce its line of Nescafe Dolce Gusto coffee pods to the public.

The Credit Union Takeaway: Be Nimble
For all the trendy names and new products sold, pop-up stores are not an unfamiliar business model for most. Halloween and Christmas stores sell costumes, decorations, and trees only during the seasonally appropriate time of the year — often in recently vacated storefronts. And who doesn’t find it tempting to stop at the fireworks stands that seem to appear in so many parking lots each year around Independence Day? Credit unions too can tap into this spirit of spontaneity and temporarily repurpose underutilized spaces in the community for special events, to promote new products, or even to research and test-drive new markets in a more affordable way.

A Pop Up Success Story

With more than 1,500 stores across the nation, Target is the second-largest retailer in the United States, according to the company. But all the brand awareness in the world does not mean much to shoppers if there’s no convenient store near them, as was the case a few years ago in both Manhattan and the District of Columbia. With real estate scarce and expensive in the finite confines of these specific markets, Target decided to check both regions’ appetites for its brand before making a larger commitment. Instead of sticking a toe in to test the water, the company opted for a boat.

Target’s 220-foot floating showroom spent two weeks each in New York and D.C. during the heart of the holiday shopping season. Space was at a premium, so Target showcased only the hot items for that year — including the toys, jewelry, tools, and gadgets that everyone was clamoring for most. Shoppers climbed aboard and were handed a checklist featuring every item on display. Patrons could then peruse the inventory, placing checkmarks beside each item on their lists they wanted to buy. At debarkation, one Target employee would ring up the purchase while another collected the merchandise from a nearby, land-based temporary distribution center.

In addition to the priceless publicity the events generated, Target learned that the folks of midtown Manhattan and the nation’s capital were indeed big fans of the red bulls-eye. Subsequently, Target has opened stores in both locations to the delight of area shoppers.