Charlie Chanaratsopon sees growing e-commerce, multi-use malls, and online marketplaces as critical elements of retail’s “new normal.”
Chain Store Age spoke with Chanaratsopon, CEO/founder of accessories and apparel retailer Charming Charlie, and technology entrepreneur Keith Richman, who is partnering with Chanaratsopon in a new e-commerce venture called Boosted Commerce. (Charming Charlie filed for bankruptcy in July 2019 and subsequently closed its 260 stores and e-commerce site. Chanaratsopon acquired the chain’s trademarks at a bankruptcy auction in fall 2019, with plans to revive Charming Charlie as an omnichannel retailer. To date it has opened six stores, with 14 additional locations set to open this spring.)
Chanaratasopon and Richman discussed how retail is evolving in the face of COVID-19, and how Charming Charlie is returning as an omnichannel retail brand. They also provided details about Boosted Commerce, a Los Angeles-based boutique acquisition company focused on investing in third-party sellers on Amazon and Shopify. To date, the company has acquired nearly 30 third-party sellers and aims to acquire 100 by the end of 2021.
How will the pandemic change brick-and-mortar retail? Chanaratasopon: None of us could predict six to seven years of retail shifting online happening all at once. For example, my mom and aunt didn’t do much online shopping before COVID-19, but were forced to do so during the pandemic. Most volume will still be in stores post-pandemic. But when years of online shopping gets pulled forward [which has occurred during the pandemic], that’s something that will stick.
The base of e-commerce sales will continue to grow. The year 2021 is the first year all e-commerce sales are projected to close in on $1 trillion, but the majority of retail sales volume will still be brick-and-mortar for years to come.
Quality will be more important. Malls will need to consist of more than four anchor department stores and a food court, and B and C malls must be repurposed to better use. They will need to be converted to mixed-use centers with apartments, office space and retail stores. Top malls will continue to accelerate their bifurcation, as Triple A mall assets will become even greater.
What do you think of Amazon converting mall space into fulfillment centers?Chanaratasopon: Amazon disrupted brick-and-mortar retail, and now it’s coming back and buying malls. I have a lot of experience going into small towns in states like Alabama, Kentucky and Mississippi – Charming Charlie had stores in those places. The local shopping center serves as a destination in smaller towns and I hope they [local malls] come back.
Consumers will be disappointed if the local mall is converted into an Amazon distribution center. But some will have to be converted into distribution centers. The free market will be the proof point to show what an individual shopping center’s use will be and what use is most effective.
What are the advantages to using a third-party e-commerce marketplace vs. launching your own site? Richman: We view Amazon as the world’s greatest mall and retailers want the distribution and the prime location in that mall. Being where all the customers are is a big benefit, and retailers can take advantage of their distribution and fulfillment. Amazon’s demand generation and fulfillment are also a massive value add.
Some retailers might have experience in one of those areas, but not the other. Most sellers haven’t figured out the logistics of shipping products to customers — there is a learning curve. With FBA (Fulfilled by Amazon), you can immediately launch a product with an existing ecosystem.
The Boosted model is to identify sellers reaching customers with a particular product, get them real estate in the world’s largest mall, and take advantage of it. Boosted plans to deliver consumer and consumable products not just to Amazon and Shopify, but to the digital shelf. We will build a great product catalog and distribute it to all channels.
Do you expect Shopify rise to the same level of prominence as leading online marketplaces such as Amazon, Walmart and eBay? Richman: Arguably, they already have. Shopify is making it easy for anyone to launch a store. My nine-year-old doesn’t know how to code, but watched a few YouTube videos and learned how to launch a Shopify store. I don’t believe the alternatives are mutually exclusive.
Fulfillment is the biggest impediment to Shopify reaching the same level as Amazon, as customers now expect everything to come in two days. As Shopify’s back end becomes equivalent to Prime, it will be a massive inflection point and make it just as easy to sell on Shopify as it is on Amazon.
What made you decide to revive Charming Charlie — both online and in brick-and-mortar? Chanaratsopon: We have an email list of 8 million customers across the U.S. Our business did an aggregated $3 billion over the years. What does it look like now in Retail 2.0?
Stores are an asset, not a liability. Stores will need to become venues, reasons for people to leave the house and shop. Quality is more important, as I said before in regard to malls. We previously had 360 stores globally; we don’t need the whole suite again, maybe 75 or so. There will be more interplay between online and the physical store. We will be on platforms in Europe and Asia, and in department stores in Europe. We communicate with our 8 million customers frequently.