On the Money

Story forgoes online presence, bets on brick and mortar

Reinventing retail
Reinventing retail

The holiday shopping season is well underway and for many, the convenience and value of buying online is a huge draw.

Despite recent trends showing electronic retail sales are on a tear, one retailer is betting big on brick and mortar. In fact, the company is selling nothing online.

Rachel Shechtman is the founder of Story, a 2,000-square-foot store in New York City's west side neighborhood of Chelsea. She opened her doors in December 2011, and she completely revamps the store every three to eight weeks. Everything changes — from the store's design to the merchandise it sells.

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Shechtman explained to CNBC's "On the Money" that Story has the point of view of a magazine, changes like a gallery, and sells things like a store.

"The idea is really looking at a physical space as a media channel and so we have two revenue streams," Shechtman said. "In the same way a magazine has advertisers, we have sponsors, and magazines tell stories by writing articles and taking pictures, and our version of editorial content is merchandise and events."

Rachel Shechtman
Getty Images

Transforming the store every few weeks is an expensive endeavor, let alone the high cost for rent for a New York city storefront. It's also a bold bet in a world where consumers are flocking to their laptops and mobile devices for shopping.

Shechtman, however, insisted her traditional brick and mortar space has an untraditional business model. It's based on a concept she calls "retail media."

Fortune 500 brands such as Hewlett Packard, General Electric, American Express and Target have all sponsored a "story" that is relevant for their brand. To date she has done 28 stories with sponsorships now starting at $400,000.

Today, the store features the theme "Home for the Holidays" sponsored by American Express OPEN. About 2,400 products from 320 different small businesses are featured in a space designed to resemble a person's home, complete with a fireplace, kid's room and even a garage.

The theme goes hand in hand with American Express and its "Shop Small" campaign as well as its nationwide event Small Business Saturday, which encourages people to shop at small local businesses. In November, Shechtman even ran an event on Small Business Saturday, featuring different entrepreneurs and their products every hour. Businesses ranged from jewelry makers to food trucks vendors.

Small business owner Jessica Hendricks, founder of Brave Collection, was one of the featured businesses.

Story "really becomes a platform of discovery to learn about new brands, and it's an amazing opportunity for small businesses like mine to be able to reach new audiences," Hendricks said.

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For the consumer, Shechtman says it's all about the experience, which some appreciate.

"I like the idea that every time you come back you might be seeing all new stuff that you haven't seen before and I think that's what more stores should do," says shopper Kristen Shapowal.

"With everything that's going on with online, we have to create exciting environments for people to get out of their homes and come shopping, and Story really does that," says Brad John. His company, Flight One, was one of the businesses featured.

Shechtman is hopeful her brick-and-mortar innovation will keep the crowds coming. So what's next for the entrepreneur?

While there are no plans to open more stores in the near future, Story's owner says she wants to focus on what she does best: being creative and dynamic.

"On the Money" airs on CNBC Saturday at 5:30 a.m. ET, or check listings for air times in local markets.