On a mild Friday afternoon, with a weekend approaching that will afford him few places to go, Ross Bailey can’t help but smile at his circumstance. “It’s funny to say all these things at this precise moment where we’re all sat in isolation,” he says. “But I also truly believe that’s what we’re longing for—to get back out there and to discover, and to meet and to connect.”
Bailey, 28, is the founder and CEO of Appear Here, often called the “Airbnb of retail space,” a company that connects brands looking for temporary store locations with the landlords looking to rent them. A Forbes 30 under 30 nominee when he was just 23 years old, Bailey, whose clients have included Nike, Apple, Netflix, and Chanel, has come to be known as something of an authority for his vision and thought into the retail biz.
Which is what makes this all so difficult. Though he is a self-described bull on retail’s eventual recovery, a global shutdown is nonetheless a precarious position for the business he traffics in. From his home office in London's village of Stoke Newington, Bailey discusses what will change when retail makes its comeback, how the best brands are taking in-person experiences and moving them online, and why, in the end, this pandemic may not have the effect on shopping you might have read about. “What this crisis has done has not changed where retail’s going,” he says. “If anything, it’s going to accelerate it.”
(This interview has been edited and condensed for clarity.)
In March, you opened up your Twitter inbox to listen to how Appear Here might be able to best support retailers during this time. What kind of messages came back from that?
Bailey: We got a ton of different messages. Our whole business is about connecting brands [to customers] offline, and [with] this world event that we're going through right now—it's not just an economic change that we're seeing.
Appear Here community how can we best support you over the coming months? DMs open— Ross Bailey (@RossABailey) March 18, 2020
On top of it, what we're seeing is that everything that we stand for—the real-world connection, human interaction, people walking down the street and discovering new ideas, brands and entrepreneurs having the ability to launch offline, the ability to connect to people face to face, the ability to meet an audience and tell their story and create a moment—all of these things that we help empower, we help facilitate, have stopped.
A ton of brands were using Appear Here to do all of those things [in retail]. Then they find cities have shut down. [For] a big brand that uses us—or a massive technology company that might use Appear Here to do an ad campaign or to open up in multiple cities—sure, it's a hit [to close]. But they can maybe survive it. And they sat there going, "Thank God this wasn't a five- or a 10-year lease."
But the small guy that's suddenly not being able to open that store that they've booked for three or four or six weeks—[that] could mean the end of their business. So at the beginning of this lockdown, we offered all of our brands that already booked the ability to move their dates, or the ability to cancel.
And what was really interesting is: More than 70% of brands made the decision not to cancel after we offered cancellations, but instead made the decision to [open stores at] a later date, which is encouraging when you think about how we're going to come out of this. In any kind of economic uncertainty in the past, or [during] any kind of downturn, what you see is that entrepreneurial spirit rises stronger.
If I'm a brand that relies on an in real life (IRL) experience to drive connections to my customers, what's the most important thing I need to be doing during a retail shutdown?
Bailey: It's about continued connection. At the end of the day, the world, from an IRL perspective, has stopped. It's not like a normal economic downturn where things have maybe slowed down. It's gone pause. No one is on the street.
People are launching stores not just to sell and transact, but today they're launching stores to connect, to build community, to tell that story. It's really important that they find other places to do that in the interim.
And what we've seen is brands, first of all, creating incredible content and creating events and joint groups online where they're having hundreds of people sign up and listen to Masterclasses, like we're doing at Appear Here. Or they're teaching classes, whether it's cooking, or we've had florists that are doing flower arranging, or people that do things in the wellness space. They're doing meditation or different things where people can [join].
The point is that everyone right now is, in many ways, alone. Even if you're in your house with your partner, we're far more alone than we've [been] in many senses. The reason we want IRL, the reason we want offline experiences, is because people want connection. So there's an amazing opportunity right now to have an engaged audience that still wants that connection. And what we've seen is the best people that nail the experience offline are finding ways of how they can recreate that the best they can online.
There are some brands doing that phenomenally well. One of the brands that has nailed that is Barry's. Barry's Bootcamp is all about the shouting, the energy, on Instagram Stories every day. And that's because it's actually not [live from] a studio. Because it's not perfectly done, because it's in someone's home, it feels more intimate than ever before. It feels like you're a fly on the wall. It feels very precious to be in someone's home and watching what they're doing. There's a real sense of connection that they’ve created offline that is very similar to when you walk into someone's world.
You mentioned Barry's, which has been a great example of a brand using video and livestream well to connect with its audience. What are you seeing in terms of offline experiences in other ways, digitally or otherwise? What are brands doing in addition to video that are really working right now?
Bailey: From a food perspective, we've seen some really interesting stuff. One of the brands we work with, Tart London, they've been empowering their community to make dishes at home by delivering little physical recipe cards with boxes of ingredients with all the steps they need to take.
Another one that I've seen that's really interesting is a womenswear fashion brand called Henri. They saw an opportunity to transform their actual stores, their physical stores, into what they called like a collection hub, where they're offering boxes of fresh organic vegetables that can feed two people for a week. So they looked at who their customer is and they've gone, "This is our audience. This is what they care about. This is who they are." In many ways, they're saying, "We don't just sell a product." They're saying, "We're a brand. We're a lifestyle." It's been pretty amazing watching a fashion brand in a way become a food convenience store. That was something in the offline world that I thought was really exciting.
Another one I loved was Bleach London—it’s this incredible [brand] doing wild coloring of hair. It's got a real celeb following. They took over Instagram Live, and they did what they called a hair party [online]. So they got everyone from one of the Jagger daughters to Nick Grimshaw, who's a big DJ in the U.K. They got different models and they were all on Instagram Live, doing their hair in the shower and in lots of wild colors. They all got sent a physical kit to their homes. Each one of them got sent a random color.
So [customers] could see that Friday is the hair party. You opt in. You get sent the colors to your house. You pick which vibe you're going for. And then you do it with these different people all at the same time. There was music playing, and they were literally having a Friday night sort of slumber party. It was just great watching people failing, watching people trying to do their hair and it not really working. And then the people from Bleach London giving the skills and giving the expertise. Suddenly everyone's on [the same] level, right? The celebrity, the model, the salon, the person wherever they are in this exact moment, are having this shared experience. I thought that was pretty amazing.
Your company has enabled retail spaces in some of the largest, most iconic cities in the world—Appear Here does business in London, Paris, New York, Los Angeles, etc. Not coincidentally, these are the population-dense places that have also been in perhaps the largest state of crisis during this pandemic, and indeed may take the longest to rebound. What do you see happening in major cities specifically when it comes to retail going forward?
Bailey: It's really difficult. But I'm optimistic, and the reason why is the more that I've sat here in isolation, and the more that I've sat here with my family, I'm just craving walking down the street and getting a coffee and going into the little bookshop and all of those little places.
What's interesting in these big cities is, before the shutdown—when this was all still happening, but it was all about social distancing and the shutdown hadn't happened [yet]—what we saw was that some of our bookshops and some of our coffee shops were actually doing the best they'd ever done, because while people were at home, they were still wanting to go out and grab a quick coffee, or at least buy a book or do something, because they were bored senseless of being home. And this is even when people understood the threat. So I guess I believe, even when these measures are relaxed, that will come back, so to speak.
However, I think [the recovery of] general commerce is going to be a much longer period because there's going to be a sensitivity still around how we interact. The idea that when this switches off we're just going to walk in a shop and be close to each other, or sit in a theater next to someone else—we've got to somehow overcome this fear. And there's going to be a real fear that didn't exist before, because there's going to be this fear that you could be next to someone that has this crazy [virus] that could potentially kill you.
You mentioned London, Paris, New York, and L.A, and these highly dense cities being the cities that take a bit of time to recover. The reason we also live in these cities isn't because they have faster internet or because they have a nice museum. The reason we live in these cities is because of all the other bits, the 99%, all of the little shops, and the coffee stores, and the restaurants. It's because of all of the content that makes it a place that we want to enjoy and want to live in. I can't see it being a world where we won't go back to wanting to do those things.
My followup to that is: What do you believe may change in the retail store after this? Will we see retailers maybe only accept tap payments and begin to refuse cash at even greater numbers than they already do? Will perhaps things like returns, accepting merchandise back into the store, become a different proposition? What is your sense of what changes, if any, we may see because of this on the retail operations side?
Bailey: Fundamentally, what's interesting with the store is nothing's changed for the past 150 years. You've seen no real innovation. It's still a square box with product that you can buy and sell.
What we've seen over the last couple of years is that—with the rise of direct to consumer, with the rise of the cost of digital advertising, with all of these different things—we're starting to see the store become something else. And we're starting to see the store really become a place where you can connect to individuals.
For the store to exist in the future, the way we measure it, the way we stock it, and the way we build it—all of those things have to fundamentally change. What this crisis has done has not changed where retail's going. If anything, it's going to accelerate it. Retail going forward is about impressions, about media, about connecting to people. What this isolation period has done has only made us crave that human interaction, crave the idea of belonging, more today than less.
My belief is, whether it's 12 months from now or 18 months from now, retail will become more relevant than ever before. Because what you experience, especially when all you can do is be online, is how important the offline world is. As human beings, we are social creatures. We want to connect and we want to interact. And the arena in which that happens is our streets.
To your point of, “How does that change in how the store operates?” We are moving anyway toward cashless; that will, again, accelerate because of what's gone on. With things like returns, we're seeing more and more that stores are becoming a place where you can touch and you can feel and experience stuff, and then maybe online becomes the transaction or the fulfillment piece.
A lot of fashion brands and a lot of retailers that we've seen—they're actually not launching a store to sell product. They're launching a store to create an environment and to tell a story. And walking into somewhere where you get a branded experience—and you have an idea of what the story behind that product is that you then might purchase on your phone—is also relevant.
So all of those things will continue. They'll continue at an accelerated pace because they'll have to, and because the people who will come out of this period, this economic downturn that we'll see following this lockdown, will be the entrepreneurs and the innovators and the people that are forward thinking.
Humans want to connect, and life isn't the same if we're suddenly all terrified that we're going to catch something. I do think that will be short-lived [for] the next 3-6 months or so, but I'm bullish, and I'm excited. I believe in the real world and stores more than ever before.
We may be learning through all this that the experiential retail store could become the ultimate luxury for a company. We may find that not every brand is going to be inclined, or may necessarily have the means, to activate itself through retail as a way to meet its customers going forward.
As the CEO of a company like Appear Here, I can guess where you might land on this one, but do you imagine a future where some retailers may look at the risks and costs of permanent retail as a proposition they no longer wish to continue on with—that they may look at popups and temporary brand activations as the right way forward for them when it comes to retail?
Bailey: You're completely right. [Retailers may] think, “Why do I want to take a [lease] commitment for five to 10 years?” Where does the five- or 10-year lease make sense? It doesn't.
When I set up [Appear Here], I had my own little shop [in London] that I launched during the Queen's Diamond Jubilee [in 2012]. There was this national moment happening, and I was like, "Hang on a minute, I want to be part of this." And I created T-shirts with the Queen on them, and a David Bowie stripe through her face (author's note: Bailey is pictured below, right.)
And I thought, "How do I get these out there?" I tried doing online, and actually I set up a Shopify store. And what was amazing with something like Shopify was, for the very first time, I could create a website online and I could suddenly sell to the world. So I set up my store, but I had an issue: Who is going to find me? If you type “T-shirts” into Google, you're not going to suddenly find some small guy that's just set them up. It's going to be the other big brands.
So it was about discovery. I sold stuff online, but when I created my store in the real world, we gave people access. We made it possible that you didn't need the tenure. It wasn't something that was now just set up for the old, traditional businesses of the past. It was allowing anyone to participate, anyone to access that real world. Then what I saw is that we actually sold far more in our physical store than we sold online. And most of what we sold online was due to people coming into that store. That was a real learning curve for me.
What online gives us is the ability to access [goods] from anywhere and have it turn up in our houses tomorrow. But what I believe humans want more today than ever before is, we don't just want to consume. We want to buy stuff that has a story behind it. We want to buy stuff that means something.
Ecommerce is becoming everywhere, but in my view the store is the arena where we can meet that brand, or meet that entrepreneur, or meet that story behind the product, and really realize why it matters to us.
For the entrepreneur, it's the place to suddenly get discovered. It's the place to go, "Hey, this is what I'm doing and this is why I'm relevant." The experience of someone opening up a store just for a few weeks—with the person in the room who makes the products, who's passionate about what they're doing—that to me is one of the best experiences there are.
You've seen that lease lengths are getting shorter, that people bored of going onto Fifth Ave. or Regent St. in London (pictured below) and walking into a big massive store with just racks of product and rails of stuff. In many ways, that type of store is like walking into an Amazon warehouse. It's like, "Hey, here's everything you can buy, and let's buy it as quickly as possible. And we're going to stay here and maybe the window [displays] might change." I think people are over that. What they want is the ability to get surprised, to have little things popping up and disappearing, and stopping them in their tracks.
Let's finish up with some talk of recovery and how you might see that looking for retail. Even once we're allowed back to a more normal life, as it were, it may be under much harsher economic conditions, where disposable income for many—even for companies—is in short supply. How do you think that may impact retail experiences even once shelter-in-place orders are lifted?
Bailey: I think that the idea of traditional retail is dead. I can't see why someone's going to want to sign a five- or a 10-year lease unless you want that one amazing flagship store. And I still don't think that's the point. You want flexibility. If you have flexibility and you turn retail into a variable cost, in many ways the idea that it's more expensive than any[thing] else isn't true. When we look at the cost of online advertising and performance marketing and everything else—these things are expensive, and what we've seen prior to this crisis is that they're actually more expensive and less accessible than offline.
So if you give [brands] the ability to book a store by the day, week, or month, that offline experience is actually more viable and they get a better return. Coming out of this, [temporary retail] is going to be only more accessible and more effective in terms of the price perspective, because you're going to see prices go down from a real estate value. You're going to see more landlords giving people access. Those landlords that were holding out for long-term leases are going to embrace flexibility more than ever before, which will create a new landscape where brands and entrepreneurs have the ability to pay as they go, to opt in for when something's relevant, and then opt out when it's not. Commerce and online is ultimately the foundation of what people need in terms of how they power their business. But I still believe that the street is going to be the arena in which you discover that store.
Unless you're Amazon, and you're just about pure consumption and buying stuff as quickly as possible, that other kind of retail that's about storytelling, and about products that mean something, and about discovery—that needs the offline world 100%.
From an economic perspective, in terms of job losses and that sort of effect on the economy, in any previous downturn what you've seen is that the entrepreneurial spirit rises stronger. You see more imagination, more creativity, more new ideas, more incredible businesses come out of that than ever before.
And if you're starting something new tomorrow, the way that you get discovered—it's going to be about that thing stopping you in your tracks, making you stand and get surprised by it and it disappearing before you get bored. And then you'll go and buy it online. And the place where that happens will still be the street.
I've heard two terms making the rounds in news coverage of this pandemic as it relates to consumer behavior. The first is "revenge spending," where consumers are eager to get back and eager to spend when they're first allowed to do so.
The other one is "economic scarring," where shoppers are less likely to part with money until there's been a much more prolonged return to normalcy. Which reality do you imagine is most likely of those two for consumers as we start to recover from this?
Bailey: Both of those examples are on the extreme ends of the scale.
Fundamentally, what's going on from a climate perspective, as well as in the world, the idea of just consumption—wanting to buy because it makes us happy and we missed out for a few months—[won’t be] the case. People have this understanding of the impact consumption has on the world. They're going to have that understanding of the impact even more coming out of this—that you don't need to buy as much as you were buying previously, and you don't just need more stuff.
On the flip side, I do think that we're going to see that, when you do buy something, you want it to have more meaning than ever before. So it's not about this sudden revenge spending of people wanting to buy lots of expensive handbags. And I don't think it's going to be that everyone's just not going to want to spend anything. But I do think you're going to see, no matter who you are, when you do go out there to purchase something it needs to be something that is meaningful—that has a story behind it, where you know where it's come from.
There's been a real understanding of the impact this crisis has been having. And I've been seeing people buying vouchers for restaurants for when they reopen, or people buying products from brands even though the product hasn't yet been released, because they want to support the business and they want to support the person behind it.
That idea of wanting to buy something from someone, so it's not just stuff, but also wanting to support the person who's making it, is only going to be something that's more prevalent as we come out of this.