When retail reinvents itself

If the large department store in the city closes, it poses problems for inner cities. An example from Mainz showed how completely new store concepts can work in empty spaces.

Chic carrier bags made from reused plastic from the world's oceans; soaps reminiscent of handicrafts; Houseplants on sale that make even aging student shared apartments stylish: Everything that was offered on FSC-certified wooden trestles and pallets around the disused escalator on the ground floor of the former Karstadt branch is now packed in boxes and transported away.

The lights went out for the second time in the former department store in the middle of downtown Mainz. With the “Lulu Concept Store”, named after Ludwigstrasse, on which the retailer conglomerate is located, a colorful interim use has ended before the planned demolition of the complex.

A touch of the metropolis in Mainz

For three years, the 165,000 visitors, according to the operator, were able to feel a little like Prenzlauer Berg in Berlin in what is otherwise a rather dull part of Mainz city center for Generations Y and Z. Regional start-ups and collectives with regional products also sell a “look and feel” that does not exist in online retail, where the more online-savvy peer group usually hangs out.

Young and young-at-heart customers found in the flea market atmosphere what a screen cannot offer them: a shopping experience in which they could examine the goods together with friends and taste, smell, feel and discuss them. What was reminiscent of a gourmet department in classic department stores had a hip and sustainable feel here. In return, customers also accepted a higher price level.

And one or two drawbacks when it comes to the appearance of the sales area: “The store is dirty, outdated and not prepared” is one internet review, “not a nice place to shop and feel comfortable” is another.

need of the uniqueness

But the perfect imperfection said it all: because behind what looked like spontaneity – as if everything had been quickly and provisionally set up for the store opening in the morning without time for the perfect showroom look – there was marketing. “Lulu” used two store concepts: a mix of “pop-up store” and “concept store”.

The former appears to appear unceremoniously in empty rooms and seems as if it will disappear again just as quickly. According to sales strategists, this time window appeals to customers with a strong need for uniqueness who expect unique, exclusive-looking or even individualized goods.

The industry speaks of “Need for Uniqueness”. The “NFU” is often cited as a motive for customers' actions, explains Waldemar Toporowski, who also researches “pop-up stores” and related concepts at the University of Göttingen: “What is 'unique' can of course change. Artificial scarcity through transience actually increases the pressure to buy.”

An opportunity for start-ups

Dominique Liggins names other goals. He is one of three who organized “Lulu” in an agency and kept it running: “We wanted to make it possible for small retailers and start-ups to try out something here in a prime city center location – something that would otherwise be possible for them is never possible.” This meant that retailers who previously only sold their goods online were able to use real counters for the first time. “Here they were able to try out interaction with customers. It's different than in online retail.”

And their risk was calculable. Starting rent: “150 euros including additional costs for four or five square meters if we saw potential for more customer frequency, quality and enrichment of the product range in the interested party,” explains Liggins. The rental agreement: can be terminated on a monthly basis, completely unusual in a commercial space.

More than 100 retailers at the start

The owners made this flexible savings subscription possible. Tina Badrot is managing director of the project development company that bought the house when it was still rented by Karstadt. When Karstadt moved out, she didn't want to leave the building empty and wanted to experiment instead. “And if I close everything and put up construction fences for four or five years – then bringing the location back to life takes more effort and therefore money. We have allowed ourselves this learning curve and will benefit from it for future properties.”

In this way, the “Lulu” increased the attractiveness of Mainz's city center for years. More than 100 retailers operated their sales alternately or completely throughout this time – sometimes their offer didn't catch on, sometimes it was so successful that they opened their own store.

Small quantities promise exclusivity

With this in and out, the “Lulu” also fulfilled the criteria of the “concept store”: comparable to something between a boutique and a department store, there are practically all types of goods there, and yet everything seems exquisite and unique because instead of mass, only a small selection is offered for sale .

If you want to be known, show yourself rarely – make yourself rare and you'll be a star: This illustrates the problem of the department store, which stacks up goods in order to satisfy customer expectations through quantity. Dealers apparently only brought the best into the “Lulu” and left out the second and third choices.

Department stores have to reinvent themselves

“The 'standard department store' has survived for years with its everything-under-one-roof concept because it offers nothing better than stationary specialist and drugstores or – for clothing – Zara, P&C and H&M or – online – the Amazons and Zalandos,” explains Bernhard Swoboda. He is a professor of marketing and commerce at the University of Trier and knows “pop-up” and “concept stores” from studies that go back to the 1990s.

Almost only department stores that combine tradition – including local products – with luxury and offer a certain quality of product range and advice are successful. “That can hardly exist online, because luxury brands sell online through their own channels, not through Amazon. And personal advice is as rare online as water in a desert.”

Therefore, the success of “Lulu” can be understood as a transitional concept, says Swoboda: “It is a selective, higher quality and certainly attractive experience concept for the target group with a unique selling point in the competition of city retailers and providers. It's the mix that makes it.”

New concepts are worthwhile for cities

If inner cities lose their big crowd-puller department store – can subsequent and interim use à la “Lulu” be a means of exploiting the gap? Department store upcycling as a ray of hope for panicked city leaders and nervous retailers around an orphaned crowd puller?

“This only works over a long period of time if, for example, a city manager professionally recruits new providers and the concept is made ever more surprising and exciting – and all this at low (rental) costs,” analyzes Swoboda.

In the long term, it is worthwhile for cities if a vacant space in the city can be filled with one or two “pop-up” and “concept stores”. “And long-term, because the concept works and contributes to revitalization,” says Swoboda and lists success factors: “Attention, freshness, variety and experience, exclusivity, brand presence or flexibility.”

Mainz “Lulu” as a role model?

Many decision-makers in those cities that have lost their department stores would probably also like all of this: “Since we opened, we have had many visits from people from all over Germany who wanted to take a look at this,” says Liggins. The agency now looks after three other cities and has served as a source of inspiration for others. “What we always tell them: The decision-making processes have to be short – be it with the owner, but also with the authorities. The luck here was that, for example, as the city's former city manager, I already knew many of the contacts.”

Researcher Toporowski also sees it as necessary for success that the city knows exactly what it has to offer: “The residents of a city that serves as a location must have sufficient 'need for uniqueness'. Whether the concept works in a location, its temporary use “It has no natural cause is not an easy question to answer. There are examples of this.”

Planned restart in the new building

Tina Badrot also hopes to create something like this. Because even if the usage agreement ended at the turn of the year, the “Lulu” could be resurrected – as soon as what it now has to make way for is in place: the “Cityquartier LU:” is to be built in the same place, a building complex with enjoyment, culture and trade. At its center: a new “Lulu”.

Badrot's project company is already advertising with “a pop-up hall on the ground floor in which international brands, local crowd favorites and start-ups can present themselves in temporary shop units.”