New Co-Working Space Focuses On Retail Innovation

By Kavita Kumar Star Tribune

WWR Article Summary (tl;dr) A new co-working space in Minneapolis is focused on helping entrepreneurs in retail. At "Third Haus", there’s a large open space they call the “retail experience studio." The studio includes display tables, mannequins and other fixtures where brands, tech startups and retailers of all sizes can experiment with how to merchandise and to roll out new innovative concepts in a physical space.

Star Tribune

After he left Target two years ago, Chris Walton spent a lot of time meeting people at Starbucks to talk about retail. So did Anne Mezzenga.

The two had worked together on Target’s store of the future, one of the innovation projects that got the ax a few years ago as CEO Brian Cornell’s team retooled its turnaround plan.

Afterward, they teamed up together on an edgy retail blog and podcast called OmniTalk, providing candid and often provocative commentary on the retail world, with a special focus on innovation.

“It was like, well, wait a minute, why isn’t a place to go if you’re interested in retail where you can meet people and then you might bump into other people, too?” said Walton. “Especially when retail is such a pulse of Minneapolis. And we’ve always been an epicenter of retail innovation with the first indoor shopping mall, Target, Best Buy, General Mills” and Mall of America.

The two business partners came up with Xenia Retail, a Minneapolis-based point-of-sale technology company. The company’s main project to date is Third Haus, an 8,000-square-foot retail-focused co-working and lab space in the Linden Hills neighborhood of Minneapolis.

With its opening earlier this month, Third Haus joins an increasingly competitive co-working market in the Twin Cities.

The Third Haus concept is housed, symbolically enough, in a former Tuesday Morning store. It’s set up with many of the hallmarks of a typical co-working space: sleek white tables, green hanging plants overhead, Wi-Fi, a printer, lots of outlets, coffee and, occasionally, cookies made by Walton’s mom.

On top of that, there’s a podcasting studio where Walton and Mezzenga record their weekly musings on retail news and interview those pushing the boundaries in retail.

And there’s a large open space they call the “retail experience studio” with display tables, mannequins and other fixtures where brands, tech startups and retailers of all sizes can experiment with how to merchandise and to roll out new innovative concepts in a physical space.

The lab space includes internet-connected lighting donated by Signify, a division of Phillips, that can sense when a consumer is near a certain product. And members can experiment with Xenia’s mobile checkout and scan-and-go technology.

Troy Stelzer, the CEO of Xenia, worked with Walton and Mezzenga on Target’s store of the future concept. They wanted a space where they could continue to toy around with some ideas and showcase their capabilities. His six-person team in Minneapolis now works out of the Third Haus space.

“We spent the better part of a year interviewing and selecting potential partners,” Stelzer said. “Most are complementary to our platform. But some have aspects that are competitive to Xenia. We have to be OK with that and understand the friction makes us both better.”

In the retail lab, there’s also a lactation pod by Mamava, a Vermont-based startup whose mobile rooms for breast-feeding moms have been showing up in sports stadiums and airports.

The company, also a partner in Third Haus, now is experimenting in stores. The idea, in addition to providing an appealing space for working moms in the neighborhood, is to help retailers envision how they can incorporate such a concept in stores to provide a better experience for both shoppers and employees.

“Ever since Chris and I started working on the store of the future, we were thinking of mothers and the workplace,” Mezzenga said. “Here, companies can think through about if this is going on a floorpad, if you’re going to take up that real estate, how do you make sure it’s merchandisable and how do you make sure it fits the brand.”

The Mall of America, which like many malls is looking at ways to stay relevant and more digitally focused in the age of online shopping, has offered to cover 100 community-level Third Haus memberships priced at $15 a month, which would give those who apply access to the lab’s events, workshops and exclusive content.

“We firmly believe in the strength of collaboration and look forward to working alongside Third Haus to promote retail innovation,” Jill Renslow, a senior vice president of business development and marketing at MOA, said in a statement.

Other membership levels at Third Haus include a $60-a-month option that also includes three drop-in co-working days a month and a $200-a-month option that includes daily co-working. The latter two also include discounts to the gyms next door -- CrossFit Linden Hills and AQ Fit Labs, which Mezzenga owns with her husband, Logan Bautch. It’s another perk that they want to see if it resonates with members.

“Everything is sort of in test mode right now,” she said.

GrocerKey, a Wisconsin-based startup with a handful of people who work in Minneapolis, has started using Third Haus as its local home base. On a recent day, an employee from Lululemon’s corporate office was also typing away on a laptop while visiting from Vancouver.

Third Haus’ leaders also think it will be an appealing space for suppliers, consultants and brand representatives who to the Twin Cities once a month to have meetings with Target and Best Buy. And they think they can be an appealing option for the big retailers in town, noting that many of the people who have reached out to them in the last couple of years are those working on new initiatives within those companies.

“This is the way to do experimentation,” said Walton. “You can try to do it within your walls, but as soon as you do that, it’s defined by how you think about things. So come out here and do it scrappily first where you can get out of your box. Which is what a lot of people are doing in New York or San Francisco. There’s no reason we can’t just do it here locally.”

The hope, too, is that the lessons from various experimentations can then be shared either through the podcast, events or special workshop to make it a learning space. Next month, for example, Walton will give a talk at Third Haus about trends shaping the future of retail. And women’s retail collective that Mezzenga recently launched will have happy hours and other events in the space. ___ Distributed by Tribune Content Agency, LLC.

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