RETAIL-TECH

Can co-retail for commerce become what co-working has been for companies?

According to Clara Lindsten, co-founder of startup Co-X, it helps retailers and property owners to capitalize on their assets in a new way, get a better return on their square meters, and find and operate new and relevant content in their commercial spaces.
By JOHAN MAGNUSSON
January 02, 2023

Boys Don’t Cry is a Stockholm-based design agency which has gained substantial knowledge from consulting in the retail industry during the last decade, working with clients like adidas, H&M, Matas, Kicks, and Absolut Vodka on innovative retail concepts. Clara Lindsten, an industrial designer who’s worked with retail innovation with Google X before joining the team, explains that by working in the field, a sense of urgency was identified and studied.

— We realized that there is a huge problem in the world of commerce that is really worth solving, she says. When we looked around for partners that shared this interest, we found Fredrik Palmgren, who co-founded Centigo, a 300+ person management consulting firm known for its unique decentralized self-management organization. We teamed up with him some years ago, where we together developed a multiplayer business design model, and that collaboration led us to the foundation of Co-X.

The founder team.

Co-X was born out of dialogues within a network of entrepreneurs and agencies in Stockholm. The team is distributed over 6 different expert firms, directed and coordinated by the founder team — and the network is growing by the day. The concept is a multiplayer co-retail development and operations platform, helping commercial real estate actors turn their spaces into co-retail marketplaces.

— It offers context and flexibility to brands to run micro shops in shared spaces. We sell this offer to brands, and then provide the operational platform that makes shared spaces function as one unified whole, including check out, payments, inventory management, coordination, and reporting, Lindsten explains, continuing,  

— We launched just a month ago together with our first client, the property owner Unibail Rodamco Westfield (URW), with the opening of Depart.a.mental, a popup featuring 32 digital female-founded brands. We’ve enabled URW to join forces with an independent sales team and a bunch of creative agencies and operate the collective Depart.a.mental concept. The joint venture offers ’retail as a service’ to brands, who are given the opportunity to sell directly to end consumers without middle hands. It’s really interesting to see how the brands help each other to drive traffic and engagement — and the customers get the chance to find really unique stuff from innovative brands.

— Our vision is to give new opportunities for local entrepreneurship to revitalise urban street life, matching the opportunity of the best of online with local presence and attention, says Oscar Hafvenstein, co-founder of Boys Don’t Cry and co-founder and CEO of Co-X.

The goal, according to Clara Lindsten, is to unbundle traditional retail and ’rebundle’ it into a local network of creatives, service experts, property owners and brands that complete each other. 

— For end consumers it means the revival of the local multibrand stores with real personality, energized by digital-native brands and empowered by our collaboration platform, she says.

— We also aim to solve the retail crisis, because we believe that consumers need interesting and rewarding physical retail and that our cities need to be vibrant and fun. Physical retail should be strengthened by digital development, not replaced, says Oscar Hafvenstein.

Depart.a.mental.

Around five years ago, the retail crisis really hit Sweden and made it obvious to the whole industry that the former era of retail was coming to an end. 

— Sure, e-commerce had taken its toll, but the problem ran deeper than that, says Lindsten. A decades-long era of growth for the many retailers and brands was ending. During that era, due to globalization, everybody could take a bet on opening their own stores. The independent multi-brand retailers were out-competed by brands. It became a single-player, mono-brand retail world. It became harder and harder for consumers to browse and find new inspiration. Where do I find the most exciting pair of jeans when there are jeans everywhere and nowhere at the same time? Sure, there are some multi-brands and department stores still around, but they mostly come from the older era and lack modern consumer appeal. Retail productivity went down when everyone did their own stores, and multi-brands died. In a hyper-competitive digital world, it is too hard for anyone alone to be good at all parts of retail. 

And we see a boom for retail-tech. What makes Co-X so unique?

— It spans the field of many success factors and ties them together: digitalization, true values of physical retail, network effects on many levels, sharing economy of places and capacities, Omni channel for real, and the combination of the strength of the independents with the power of scale, says Lindsten. A creative soul can actually build a capital intense destination without having to have all the answers by themselves and our success is fully dependent on the success of others — in comparison to other platforms that actually compete with its users, such as Amazon. Our payment solution makes physical space function on the foundation of an e-commerce solution. This is how we can promise ’true co-retail’ and that there is no reseller middleman. No other similar actor, such as Shopify or Klarna, has the same focus on the multiplayer aspect combined with split transaction functionality, meaning that we serve multiple brands and hosts that the end consumer in real-time purchases from.

How can it help retailers, brands, and property owners?

— Retailers and property owners can capitalize on their assets in a new way, get a better return on their square meters, and find and operate new and relevant content in their commercial spaces. Brands and consumers get new ways to find each other. The challenge for many brands is that they have increased costs for customer acquisition and would need the physical traffic, but investments in traditional retail are too high. Co-retail for them is like co-working for companies. It’s the same demand for more flexibility, less initial investments, and more professional services. We expect that co-retail will have stronger growth than co-working, the problems that can be solved are more business oriented and we’ll go for driving the category, with a network effects based defendable business model. Current physical retail is far too complex, capital-intensive and slow for prototyping and play. Co-retail enables every player to do what they do best, matched together and connected in operations by the Co-X platform into a fully functional excellence-oriented consumer experience. 

Is it especially helpful now, given the macroeconomic factors?

— Yes. In short term, now that we see the likely stroke of recession, co-retail can be the option for many actors given the cost efficiency of co-lab spaces. For the providers of commercial real estate, it’s a way to offer ’as a service’ instead of capital-intensive projects that clients are fast to abandon in challenging times. In a longer perspective, digitalization forces businesses to change or die. We can enable incremental change into a more digital structure for traditional players and a way for the digital forerunners to tap into the assets of the old-school physical world of commerce.

And in what other ways do you see retail develop, now and onwards?

— Either we will see a depressive future with islands of luxury in a wasteland of poverty and segregation, like London in the 19th century where Selfridges stood as a magical place surrounded by misery. Only stores like some super five-floor Nike palace deluxe would survive. Or if it goes the other way, the sharing economy breaks through within retail. We build the digital infrastructure that enables us to become wise with how we use resources and treat human potential. The bright future would less drain the physical city life for the benefit of Silicon Valley and loneliness in front of digital screens. 

And for you, what are your future plans?

— The future that we strive for is a world where retail has become smart, sustainable, and distributed, where local commercial initiatives are possible and lucrative. We want to empower local heroes and local communities and help them to collaborate without the hazards so that each actor ships in what they know best. Most of all we strive for a landscape where precision co-retail has replaced the mass- and over-production of traditional retail. With precision, we mean sustainable, well-designed, well-produced stuff that we actually need; quality above price, says Lindsten. She adds:

— Flexible and data-driven multibrand co-retail gives room for the specialized, the experts, and the passionate brands, that most often care about both the consumers and how and where their products are produced. Commerce needs to change, not end.

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