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For years, brands have grappled with a core retail question: When is it better to connect with consumers online or offer a brick-and-mortar store experience? Perhaps there’s a third answer. What if, instead of having consumers browse either store shelves or websites, you could get consumers to spend time actually living with products and brands of potential interest?
Think of it as IRL product placement. You’re going about your life, maybe taking a vacation, and the sleek coffee grinder at your Airbnb is available for you to order with a few taps on your phone. Maybe lots of the products around you are, too—the Bear mattress, West Elm armchair, coffee from a local roaster, fancy soap and shampoo, the artsy coffee-table book, Wi-Fi speakers, and so on.
Minoan, a venture-backed startup pursuing precisely this vision, calls it “native retail.” The company says it has already assembled a “network” of nearly 10,000 venues (mostly short-term rental spots, but also some boutique hotels) whose hosts pick and choose products from several hundreds of participating brands that can help them convert your vacation lodging into a de facto showroom.
Maybe you weren’t craving a new way to be tempted to buy more stuff. But Minoan cofounder and president Marc Hostovsky argues that his service meets a legit need for brands to move beyond “screens and shelves,” or as he puts it: “I felt like there was a gap in retail.” Facebook and Google’s domination of online ad sales, combined with tools like Shopify and Alibaba lowering the bar for creating a new brand, has made the digital environment a competitively challenging one for brands to break through. Physical retail, meanwhile, is expensive to operate and designed to maximize revenue-per-square-foot—not always conducive to letting any given product shine. “It’s hard to get your product in front of people these days,” he says. “And it’s better to experience products as they’re designed to be used, in the real world.”
Here’s how it works. Say you really like the look of an end table, or the scent of a candle, that your VRBO host left on display. Then you notice a sign with a QR code and the question “Found something you like?” Scanning the code takes you to a list of everything in the space that you can buy through a platform built by Minoan. So you order up the $100 end table. The brand gets $70 (and fulfills the order); the host takes $15 for “creating the moment,” as Hostovsky puts it, and Minoan takes $15.
Hostovsky, along with Minoan cofounder and CPO Shobhit Khandelwal, worked previously at e-commerce firm Jet.com, staying on when it was acquired by Walmart. They launched Minoan just as the pandemic lockdowns were kicking in—a tough moment for a business that depends on the hospitality market. But they stuck it out (and earlier this year raised $5 million from venture capital firm Accel) and have ended up in a post-pandemic moment when retail is in flux: The lockdown boost to e-commerce has given way to fresh cravings for real-world experience. Consumer spending has been surprisingly steady despite inflation and lingering supply-chain issues, and travel is definitely back.
And, according to Hostovsky, plenty of brands are hungry for new ways to get in front of potential shoppers. “We hardly even do sales on the brand side anymore,” he says. “That’s almost all inbound.” The current roster includes Article, West Elm, Crate & Barrel, Polywood, Pottery Barn, Wayfair, and other familiar names, but also a number of smaller local brands connected to specific locales.
On the host side, while Minoan still works with boutique hotels, it has shifted focus more to short-term rentals. Independent hosts often furnish their spaces with products bought straight from retail. Minoan offers them a platform to shop for goods from its brand participants at steep discounts, competitive with wholesale pricing—as much as 60% off for some brands, according to the company. (Details vary, but depending on the brand deal, Minoan can earn commissions on these sales.)
The idea is to help hosts save money, but also to make their spaces “shoppable,” as Hostovsky puts it, and ideally to earn money as a result. As he acknowledges, a number of big hotel chains have long made it possible to buy items like robes and pillows—and Westin’s Heavenly Bed, introduced in 1999, has become a bona fide hit—but it’s often a friction-filled, high-markup process. Short-term-rental hosts who see this as a potential revenue source are more motivated to curate their spaces creatively, he argues, and perhaps in ways that relate directly to a place (picking local brands, for instance).
That said, he is (not surprisingly) most insistent about the benefits to consumers. “Buying a candle in e-commerce, you have no idea what it’s gonna smell like,” he offers as an example. “You’re basically making the decision based on what something sounds like it’s going to smell like.” Minoan’s setup allows you to live with and use the candle (or table or mattress) for days; you know exactly what you’re ordering because you’ve experienced it.
In the longer term, Minoan sees “native retail” as a whole new channel that can be applied in all sorts of real-world settings, from restaurants to gyms. This can sound borderline Black Mirror: Imagine visiting a friend and remarking, “Nice lamp,” only to have your phone light up with an offer to sell you one just like it. Hostovsky laughs off that scenario and argues that online advertising, built around hijacking attention and tracking digital behavior, is far more “pernicious” than anything Minoan is up to.
And for now, lodging may turn out to be a singular fit for native retail: a carefully curated environment that Hostovsky calls “a four-walled influencer.” Staying in a perfectly appointed short-term rental can feel like an idealized, albeit temporary, form of existence—almost like living in a three-dimensional ad. And sometimes, as it turns out, it feels that way because that’s exactly what it is.