Can department stores be reinvented with a pop-up approach?
Neighborhood Goods, a start-up that just raised $5.75 million in seed funding, is seeking to reinvent the department store by infusing the model with the continuous discovery and community vibe of a pop-up space.
The first store opening this fall in Plano, TX measures only 13,000 square feet, well below a typical department store’s size.
Like a pop-space, Neighborhood Goods will have a rotating group of about 15 brands at a time with about four or five recognizable multinational, household names as well as a number of local, independent brands. The store will focus on digital native brands that don’t want to sell in a traditional department store setting and lack a broad enough product range for a full store of their own.
Some brands will stay for months and others for much shorter periods with expectations that a visitor will find something new on every visit. The mix will be apparel and housewares, but brands will be able to pilot new products or experiment with fresh ways to engage customers. Matt Alexander, co-founder of Neighborhood Goods, told Xconomy, “Some brands won’t want to sell anything; they may want to create a small cooking class or sponsor a reading area.”
Also, like many pop-up spaces, Neighborhood Goods will have a communal aspect. The format includes not only a bar and restaurant, but event programming, a speaker series, art installations, a publication and podcast. On the tech front, Neighborhood Goods’ app will enable customers to learn more about brands, text staff, have products brought to them and check out.
The store will make use of modular display forms so vendors can easily alter or expand their spaces. Point-of-sale systems and employees are provided if necessary. Lease terms are expected to run shorter and be priced below typical retail leases with terms that give Neighborhood Goods a portion of sales.
“For us, the goal is to create really good reasons for people to come back that aren’t to do with the transaction,” Mr. Alexander told Dallas Innovates.
The funding round was led by Forerunner Ventures and includes participation from Maveron, CAA Ventures, Global Founders Capital, NextGen Venture Partners, Revolution’s Rise of the Rest Seed Fund, Dollar Shave Club founder Michael Dubin and Retail Connection co-founder Alan Shor.
- Neighborhood Goods
- Neighborhood Goods raises $5.75M to reinvent the department store – TechCrunch
- Retail Concept Neighborhood Goods Secures $5.7 Million Investment Round – Women’s Wear Daily
- With $5.75M Start, Neighborhood Goods to Create Stores Within a Store – Xconomy
- As ‘dull retail is dying,’ Dallas founders announce new department store Neighborhood Goods – Dallas Morning News
- Neighborhood Goods is Reimagining the Department Store With Tech, Pop-ups & More – Dallas Innovates
- About Pop Box
DISCUSSION QUESTIONS: Would the department store model benefit from a pop-up sensibility? What aspects of the Neighborhood Goods model make the most and least sense?