As Michele Varian sees it, the past few years were somewhat of a perfect storm for brick-and-mortar retail. “Just as the commercial real-estate market was becoming really unsustainable for small businesses, e-commerce was coming of age,” the designer and longtime New York shopkeeper tells AD PRO.
As a result, many young brands either didn’t have the means and knowledge to dip their toes into physical retail space or simply didn’t bother. But as Varian points out, especially when it comes to unique, handmade items, “people still want to touch and feel things. Especially in our world, where we specialize in the aspirational. It’s about individuality, quality, innovation, uniqueness.
Those are not the kinds of things that sell well online without people having vetted them in person.” So, many small brands, both digital-first and older companies that had been pushed out of their brick-and-mortar spaces, turned to the pop-up shop.
“But even doing a pop-up is wildly expensive,” Varian, whose Howard Street shop sells a variety of furniture, lighting, and accessories both of her design and by other creatives, points out. “You have to build it out, stock it, and landlords would ask for premium prices since it was a short-term lease.” So, a little over a year ago, real-estate broker and business strategist Jay Norris had an idea: Why not create a digital process for existing shops to host small brands in their spaces?
After sharing his idea with Varian (both are Detroit natives who collaborated on the pop-up Detroit Built at Varian’s shop several years ago) while discussing the difficulties of today’s retail climate, the two teamed up and brought on three more partners – Alexander Libkind, Edward Ludvigsen, and David Otani – to create Guesst, a platform to connect retailers and brands around the world.
Jay Norris and Michele Varian, two of Guesst’s five partners.
The site, which made its official debut yesterday, works a little like Airbnb; retailers set prices for their space and negotiate contracts with visiting brands through the platform (both retailers and brands are vetted before acceptance). For launch, Guesst has partnered with venerable New York retailer Steven Alan to curate a selection of brands in what will be a permanent but constantly-rotating space on the Upper West Side, opening on October. “Steven has always been ahead of the curve in the retail world; he’s always been an innovator,” Varian explains. “Those are the kinds of businesses we want to help sustain.”
Though the platform will begin in New York, its founders see no limit to location once it begins growing. “Just from our announcement yesterday, we’ve had interest from brands as far as Australia,” Varian says. “It gives internationals access to the U.S. market.”
To Varian, the idea of hosting other brands in her shop feels natural – in fact, it’s how she transitioned from selling only her own goods to wares by other creatives. “As so many of my neighbors began closing their shops during the recession, I began hosting them in mine.”
At launch, the project is entirely self-funded. “Our strength is that we’re all in the industries affected by these changes,” says Varian of her cofounders. “So we recognize the need. We knew what we had to build and what we wanted to address.”
That goal is both increased accessibility for young, independent brands, and a system in which these brands can take better ownership of their product and business models. Varian points out that platforms like Etsy, while laudable for the opportunity they allow for anyone to sell, also have the negative side effect of letting creatives grow their brands without the knowledge gleaned from working for other creative companies.” They don’t have any knowledge about price structures or how the business works,” Varian explains of small sellers on digital platforms. “So they have pricing structures that are unsustainable.”
In a way, then, Guesst will serve as both a matchmaking service and a kind of de facto lesson in business strategy, providing environments in which small companies can put pricing structure and retail strategy to the test without taking on the massive overhead of a permanent space. Says Varian, “if there’s a possibility we’ve created something that can help small businesses flourish, then we’ve succeeded.”