Houdini just opened the world’s first ”circular store” — here’s what they’ve learned
Angelica Molin, Global Head of the Swedish outdoor brand’s D2C channels: ”We give the customer the choice of how they want to access Houdini garments and the user the destination for maintaining, rebooting, or reselling them.”
By JOHAN MAGNUSSON
September 28, 2023
According to Molin, who’s also the project leader for the new retail space Houdini Circle which is opening in central Stockholm today, there’s always something to learn from others.
— Be it peers in our industry or elsewhere, she says. I guess cross-pollination between different sectors, civil society, and academia has been our best breeding ground for value creation — and nature is our best teacher.
For the mentioned space, Molin and her team have certainly learned a lot — more on that later — and much because it’s the first of its kind.
— We give the customer the choice of how they want to access Houdini garments and the user the destination for maintaining, rebooting, or reselling them. Instead of dividing up our assortment into sections that can only be bought new, only bought second hand, or only be rented, Houdini Circle’s assortment is open to all of those options: Any item in the store can be rented, bought new, or even subscribed to.
— This store isn’t just about offering more sustainable alternatives to traditional retail and consumption. It’s also about giving our users a sense of autonomy over their options. If you only go skiing once a year, do you really need to own a ski jacket? Or would it be more convenient to just rent it for a week? If you need a shell layer jacket for your bike commute to work every day, maybe you do want to own it but have the choice of buying it second-hand or new. And maybe if you need different garments at different times of year because of changing weather or locations, you may want to have a changing wardrobe every three months, but you might not necessarily have the money or the space to own all those garments. Then a Houdini subscription can be perfect.
— The space is as much about decreasing our dependency on new consumption and production, as it is about giving users options that acknowledge changing needs and personal preferences.
Are you sure that it’s the very first ’circular retail concept’?
— It’s the first concept we’ve come across in our 30 years in the business that flips the traditional model on its head and puts the user front and centre when thinking about a smarter, more convenient and sustainable future of retail. We have built a model that’s entirely based on what our users might want and need and were able to plug our services like rental and second-hand, which we’ve had for years, into it. As far as we know, it’s the first concept of its kind where all varieties of alternative business models come together under one roof, where it’s the user and not the brand that dictates how garments can be accessed, says Molin. She continues:
— Sustainable and circular innovation in our industry has historically focused strictly on the production side of things, while lifestyle, consumption and value-creation in the user experience have often been neglected. Considering this, there is a great need for innovation and massive opportunities for improvement. For brands recognising their impact here and wanting to take responsibility has mainly resulted in solutions in the shape of add-ons to their main business model that relies on overproduction and -consumption.
What was the most challenging when creating it?
— First of all, our timeline was tight — isn’t it always! But the main challenge was that we had to unlearn so much and bring our partners with us on that journey. The traditional business model of purchasing new influences the way we communicate with our customers, it influences our cash flow and bottom line, it influences our pricing, the way we merchandise, everything. And most of us around the world follow the same rules. So to come up with an entirely new pricing structure that is based on the true value of garments was challenging: How much would someone be willing to pay for a week’s rental of a shell jacket? And would that change if the jacket was new or had already been used? Does that matter, or is that a communication challenge we should tackle? And while we’re on the topic, the communication side of things is challenging too: We’re all so used to the conventional model, we need to make sure that our customers will actually understand their options, how they work and what benefits they have — not simply from an environmental point of view, but from a user point of view too.
What have you learned?
— So much! But I think our biggest lesson is yet to come: How will people receive this and respond to this? I think that will be an extremely interesting learning curve to follow. A lot of work has been done leading to the opening, but so much work awaits once we start getting feedback. After all, this concept is meant to work for our users. We will keep on learning and refining it in partnership with them as we go.
— So, we have a lot of learning to do! This is the first time we go live with something like this, so we will learn and refine a lot over the coming months. Hopefully, when it proves to go well, we can then start looking into expanding the concept internationally or online.
If another brand wants to do a similar thing, where is a good place to start?
— To believe that being forced to change our current way of being, living, and doing can actually bring something so much better. Use your imagination — what would you do if you weren’t contrived to existing models and conventions? Put your customer first and see your company’s progress from their perspective. What matters to them? How can you offer something that is better than what currently exists, on all levels? Molin asks.