Brand is a weekly column dedicated to the intersection of marketing, business, design and culture.
For years, brands have wrestled with a central retail question: when is it better to connect with consumers online or offer a physical store experience? There may be a third answer. What if, instead of letting consumers browse store shelves or websites, you could get consumers to spend time living with potentially great products and brands?
Think of it as IRL product placement. You live your life, maybe take a vacation, and you can control your Airbnb’s sleek coffee grinder with just a few taps on your phone. Maybe a lot products around you are too: the Bear mattress, the West Elm armchair, the coffee from a local roaster, the novelty soap and shampoo, the artistic coffee table book, the Wi-Fi speakers, and more.
Minoan, a venture capital-backed startup pursuing precisely this vision, calls it “native retail.” The company says it has already built a “network” of almost 10,000 locations (mostly short-term rental locations, but also boutique hotels) whose hosts pick and choose products from several hundred participating brands that can help convert your holiday accommodation into a de facto showroom.
Maybe you didn’t fancy a new way to be tempted to buy more stuff. But Minoan co-founder and president Marc Hostovsky says his service fulfills a legitimate need for brands to go beyond “screens and shelves,” or as he puts it: “I felt like ‘there was a gap in retail’. Facebook and Google’s dominance of online ad sales, combined with tools like Shopify and Alibaba lowering the bar for rebranding, has made the digital environment a competitive challenge for brands. Physical retail, on the other hand, is expensive to operate and designed to maximize revenue per square foot, which is not always conducive to showcasing a given product. “It’s hard to get people to know your product these days,” he says. “And it’s best to experience products as they are designed to be used, in the real world.”
Here’s how it works. Say you really like the look of an end table, or the scent of a candle, that your VRBO host left exposed. Then you notice a sign with a QR code and the question “Found something you like?” Scanning the code brings you to a list of everything you can buy in space through a Minoan-built platform. So you order the $100 end table. The brand receives $70 (and fulfills the order); the host takes $15 to “create the moment”, as Hostovsky puts it, and Minoan takes $15.
Hostovsky, along with Minoan co-founder and CPO Shobhit Khandelwal, previously worked for e-commerce company Jet.com, remaining when it was acquired by Walmart. They launched Minoan just as the pandemic shutdowns were beginning – a tough time for a business that depends on the hospitality market. But they stuck it out (and earlier this year raised $5 million from venture capital firm Accel) and found themselves in a post-pandemic moment where retail is in a state of flux: the boost from the e-commerce lockdown has given way to new cravings for experience in the real world. Consumer spending has been surprisingly flat despite inflation and ongoing supply chain issues, and travel is definitely back.
And, according to Hostovsky, many brands are looking for new ways to present themselves to potential buyers. “We hardly do any sales on the brand side anymore,” he says. “It’s almost all incoming.” The current list includes Article, West Elm, Crate & Barrel, Polywood, Pottery Barn, Wayfair and other household names, but also a number of smaller local brands tied to specific locations.
On the host side, while Minoan still works with boutique hotels, it has focused more on short-term rentals. Independent hosts often furnish their spaces with store-bought products. Minoan offers them a platform to purchase products from its participating brands at deep discounts, competitive with wholesale prices, up to 60% off for select brands, according to the company. (Details vary, but depending on the brand, Minoan may earn commissions on these sales.)
The idea is to help hosts save money, but also to make their spaces “buyable,” as Hostovsky puts it, and ideally earn money as a result. As he acknowledges, a number of major hotel chains have long allowed items like bathrobes and pillows to be purchased – and Westin’s Heavenly Bed, launched in 1999, has become a real hit – but it’s often a high-margin, high-friction product. treat. Short-term rental hosts who see this as a potential source of income are more motivated to organize their spaces creatively, he argues, and perhaps in ways directly related to a location (choosing local brands, for example ).
That said, he (unsurprisingly) emphasizes the consumer benefits. “Buying a candle in e-commerce, you have no idea what it’s going to smell like,” he offers as an example. “You basically make the decision based on how something looks, it’s going to smell.” Minoan’s configuration allows you to live with and use the candle (or table or mattress) for days; you know exactly what you are ordering because you have experienced it.
Longer term, Minoan sees “native retail” as a whole new channel that can be applied in all sorts of real-world settings, from restaurants to gyms. It may seem limited black mirror: To imagine visiting a friend and saying “Nice lamp”, only to have your phone come up with an offer to sell you one like this. Hostovsky scoffs at this scenario and argues that online advertising, built around attention diversion and digital behavior tracking, is far more “pernicious” than anything Minoan cooks up.
And for now, hosting may prove to be a singular choice for local retail: a carefully curated environment that Hostovsky calls “a four-wall influencer.” Staying in a perfectly appointed short-term rental can seem like an idealized, albeit temporary, form of existence, almost like living in a three-dimensional advertisement. And sometimes it turns out that it is because that is exactly what it is.
#vacation #retail #showroom