Here at Agile Retail, we are passionate about the role of stores. We love experimenting with approaches and formats to increase sales and drive brand awareness through connecting with and learning from real customers.
Following the recent collapse of the UK start-up, Sook, we look at what went wrong with the proposition and what the concept of ‘space’ means for physical retail moving forward.
What was Sook?
Sook, the UK-based start-up specialising in retail pop-up ventures, has recently ceased trading after failing to secure its next round of investment.
The company has had its fair share of headlines, and, has provided temporary spaces in some of the UK’s most popular retail destinations; from Oxford Street and Hammersmith to Liverpool One and Bullring Birmingham.
The core purpose was very strong (and we share the perspective). Brands benefit from real-life iteration and getting products into consumers’ hands. The cost and bureaucracy associated with leasing retail space is prohibitive. Flagging high streets and empty locations need excitement and new ventures.
And the Sook proposition worked!
Depop partnered with Sook to encourage their top sellers to connect with their followers in real life and connect with new audiences. Chilly’s utilised Sook to test if a standalone destination outside of their traditional multi-brand environment was a viable option through customer interaction and research. TikTok transformed Sook Edinburgh during the Fringe Festival aiming to teach comedians and influencers how to use TikTok to increase ticket sales. All unique and experimental ventures. Sook also continued working with more traditional brands, such as Debenhams and Mac Cosmetics, allowing the company to keep one foot in convention while continuing to innovate, and this plethora of brand partnerships created quite the buzz.
This press coverage, as we have now discovered, contrasted the company’s financial situation. Sook’s offer was inviting. Physical retail executed cheaper and simpler for brands of all shapes and sizes. Sook went about creating unique brick-and-mortar stores across the country. The brands associated were eye-catching and engaging. Yet the start-up could not secure investment. So, we ask ourselves the question; what went wrong?
What Went Wrong?
With Sook failing to secure the investment to carry on, we asked our customers and our Industry Expert Advisory Board – for their thoughts on what went wrong and why the model hasn’t been successful.
Space and Retail
“The demise of several high street retailers, both large and small, has meant that finding space isn’t the issue it once was. Landlords are learning to adapt and be more flexible, and in turn, the distinctive service that Sook supplied has lost some of its uniquity” said Suzanne Harlow, former CEO of Jack Wills.
The collaboration between Lone Design Club and Landsec is a great example of new ways of thinking from the landlord’s perspective and is bringing a new and exciting offer to consumers through a selection of independent brands. An experiential retail platform working with a prominent retail property company to create a collaborative pop-up proves that flexibility and impermanence continue to counter historical conventions and find success in retail. The total proposition in these cases is the range of independent brands, events, and digital offers, not the space itself.
If landlords have learned to be flexible and pop-ups continue to succeed, what was the issue with Sook’s business model? Part of the problem is executing the rest of the retail offer. The space is of course a requisite factor, however, so is staffing, stock management, market placement, experimentation, and learning from the project as a whole. Everything beyond location is what truly allows a brick-and-mortar storefront to flourish.
Client, Capital, and Customer
Sook did not solely partner with big-name brands. They also presented themselves as a service for companies of all sizes, including micro-businesses. But physical retail is not for everyone, it is a complex, capital-intensive endeavour requiring continuous management and monitoring. “We believe in physical retail wholeheartedly, but you cannot pretend that cash is not involved – as in you need some of it to really get going - and you certainly cannot treat the location and space as the only draw” commented Marcus Fox, CEO of Agile Retail. Sook’s target audience was companies that did not have a physical retail location and as a result, they may have lacked some experience in really being successful in the brick-and-mortar world.
One of the challenges in the Sook model would have been the cost to deliver versus the return for the brand or retailer. “The broader issue with small spaces and shared spaces is that too much cost is put into them and so the expectation of success is rightly very high. But somewhere the rent and labour costs must be absorbed” added Rick Murray, former lead of Accenture’s Retail Practice. Will a two-week pop-up in isolation drive long-term value? This seems unlikely.
A short-term pop-up is also likely to be seen as a marketing cost, and with softer trading here to stay it’s likely that fewer brands would be looking to commit. The flexibility to hire a space for a very small amount of time is alluring, but what can a brand really gain from a short-term space that remains complicated to run and potentially doesn’t reflect your true brand to customers?
“These storefronts would be purely a brand-building interaction, not hugely different to a billboard. Hours or days means consumers might interact with the brand once, but not really discover them and consider them over the time it takes to drive recognition or reappraisal” suggested Matthew Cushen, innovation consultant and Managing Partner at Worth Capital. Instead, a consumer may notice and indulge based on a reduced awareness, purchase a product, and return a week later to find the store has disappeared and another brand has moved in to replace it. The eternally shifting nature of these locations results in an experience that the consumer can only interact with for a short time, most likely the one time they see it.
If the space itself is flexible this leads to a fleeting presence in the life and mind of a consumer. If the brand is flexible this leads to a constant evolution within the physical space while remaining in the lives of consumers for as long as the storefront remains open.
What Can Go Right?
Agile Retail
We’re committed to the power of physical retail, placing brands where the customer wants to see them at all the times they want to shop. Not only building brand awareness but encouraging reappraisal and consistent revenue and advocacy.
Physical retail is more than just the physical location. Increasingly so, as consumers and commuting are disrupted and shifting more than ever.
An agile retail model is not just about an agile property. It’s about agile and effective solutions to managing stock, organising great talent to showcase the brand, experimenting, keeping legal, inspiring interiors, and the myriad of all the other things that go into making stores really work for consumers. That’s what we’ve set out to offer for the 2024 consumer and brand.
We think whilst noble, Sook didn’t go far enough; perhaps focusing too much on ‘just providing space’? We think the real value of being a disrupter in this area is in being great at ‘doing it’; obtaining the relevant space on flexible terms, providing people and expertise to profitably run the store and collaborate on marketing initiatives. Think of the importance of the team on the ground representing the brand and interacting with customers – perhaps the most important ingredient of all. These are all background enablers that take the hassle away from the brand or retailer and enable the proposition to take centre stage.
Looking to the future, it is highly likely that retailers and brands will continue to challenge their store portfolios, thanks in part to the example set by Sook and in part in response to the ever-evolving retail landscape. Space will not be the only issue, creating a space that works for your brand and allows you to test and learn, gather feedback, develop relationships with consumers and learn some lessons to take forward is essential.
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