We’ve all heard and read “Amazon” and “death of bricks-and-mortar” in the same sentence many times this year. Expect the rhetoric to continue in 2018, all while brands and retailers continue to adapt to the new normal.
Stories to Watch
• Brand Stores: With foot traffic down, retailers are looking for ways to remain relevant. Some have invested in physical locations that carry carefully curated merchandise. But where commerce is not the main focus, the customer is invited to experience the brand and have a good time. For example, Costa Mesa-based Hurley opened a 4,000-square-foot store last month in Pacific City shopping center in Huntington Beach. It imagined it as a hangout for the Huntington Beach High School Surf Team it sponsors, where students can connect to Wi-Fi and kick back on the store’s couch to watch surf videos. It’s also a place where they can customize a wetsuit or pick up a surfboard to try out. Costa Mesa-based Vans Inc. has something similar in the works in downtown Los Angeles, where it’s building a flagship store at the historic 1930 Singer Sewing Machine Building. The 8,000-square-foot space will also serve as a gathering spot centered on an in-store bar. Incase Designs Corp., a computer accessories brand Irvine-based Incipio Group purchased in 2015, is getting ready to open a creative studio a few doors down on Broadway across from Ace Hotel. The space will offer merchandise found at Apple stores and other retailers, but here resident craftsmen can customize sleeves and cases. The site will also provide free classes, including photography, graphic design and social media, to smartphone and laptop users who buy the company’s accessories. Expect to see more merchants redefining the bricks-and-mortar concept next year.
• Subscriptions: Some brands have taken customization a step further by launching a subscription service. Customers sign up to receive monthly shipments of merchandise—usually consumables—carefully crafted to their tastes and needs. The risk to consumers is pretty low—they keep products they like and send back the ones they don’t. Newcomers to the scene include Stance Inc., a San Clemente-based socks and underwear maker, and Ties.com in Garden Grove, whose Guapbox contains an assortment of accessories that includes ties, pocket squares, beaded bracelets and other trinkets a modern man may need. The trend started with makeup supplier IPSY, Dollar Shave Club, which sells men’s shaving products, and women’s fashion-oriented Stitch Fix, and will likely grow in 2018—it appears to work for both the e-tailer Ties.com with no bricks-and-mortar stores, and Stance, which has a well-developed wholesale network and recently expanded its roster of company-owned stores to six.
• AR/VR: On the virtual reality front, all eyes are on Red Digital Cinema Camera Co. in Irvine. The maker of high-resolution digital cameras, in partnership with Menlo Park-based Leia Inc., is developing Hydrogen, a 5.7-inch Android smartphone that doesn’t require a headset to view 3-D and VR content. The phone is poised to “disrupt the mobile industry with true innovation,” according to quantum physicist David Fattal, who founded Leia in 2014 and now serves as chief executive. Hydrogen’s launch is planned for next year, and we predict it will be a three-peat for Red Digital founder Jim Jannard, who also founded Foothill Ranch-based Oakley and sold it to Italy-based Luxottica in 2007 for $2.1 billion.
Augmented reality—no longer a novelty—continues to change the way consumers shop. Why rely only on measuring the width and length of a couch if you can use an augmented reality-powered app to see it in your living room? Houzz Inc., an online home-improvement idea generator and marketplace whose sales and e-commerce teams are based in Irvine, has launched the View in My Room app that uses augmented reality to help consumers see how a product they found on Houzz will look in their homes. And do you really need to read that car manual if there’s an augmented reality-powered app for that? Genesis Motor America in Fountain Valley doesn’t thinks so. Hyundai Motor Co.’s luxury automaker created the Genesis Virtual Guide, which aside from serving as a library containing some 135 how-to videos, helps users identify parts and features on their G80 and G90 sedans. You should see similar activations next year.
• Car vs. SUV: Genesis’ sister company, Hyundai Motors America Inc. in Fountain Valley ended 2017 with a new president and chief executive, Kyung Soo Lee, and a promise it will boost its vehicle lineup with eight CUV and SUV models by 2020. The effort begins with the debut of the Kona small CUV in March and will include small and large SUVs running on gasoline and diesel engines, as well as hydrogen fuel cell and battery electric technologies. The automaker sold 603,297 vehicles in the first 11 months of the year, a 14.7% dip from the same period last year. We’ll be watching to see if Lee will be able to help Hyundai catch up with the national sales pace next year.
Last Year’s Pick
The Business Journal predicted that San Juan Capistrano-based Emerald Expositions LLC would trade hands in 2017. It did. Many hands—the tradeshow and events operator went public, and is listed on the New York Stock Exchange under the ticker symbol EEX with a market cap of $1.5 billion.
