Topics: Architecture, social behavior, commercial design, human experience, real estate, retail places, retail real estate

In this episode of ‘Retail Retold’, host Chris Ressa and Kevin Ervin Kelley, AIA, author of Irreplaceable and partner at Shook Kelley, an architecture firm, explore the influence of environment on behavior. It’s a topic Kelley has been fascinated with since childhood.

Kelley shares insights from his architecture and social science approach, including his work with clients like Harley Davidson and Whole Foods. Discussing his book ‘Irreplaceable’, he touches on society’s shift due to digital disruption and the critical nature of maintaining physical spaces for human interaction. He emphasizes the significance of involving retail processes in public venues and the importance of mixing behavioral study in architecture for impactful design. From case studies, he highlights the emotional connection people have with spaces and the need to innovate in physical retail to thrive.

00:00 Introduction to Retail Retold
00:21 Meet Kevin Kelley: Architect and Author
00:41 Kevin’s Unique Perspective on Architecture
02:01 The Founding of Shook Kelley
02:36 The Importance of Environment in Retail
03:52 Kevin’s Book: Irreplaceable
04:36 The Impact of Technology on Human Interaction
14:08 Case Study: Fresen Bros.
17:56 Challenges in Modern Architecture
19:55 The Role of Public Places in Society
21:30 Shook Kelley’s Operations and Services
28:29 The Power of Senses in Design
34:11 Conclusion and Final Thoughts

About Retail Retold:

The Retail Retold Podcast highlights community retailer stories from across the country and gives a behind-the-scenes perspective from business leaders in both retail and real estate industries. The show’s episodes contain valuable insights that help solve the needs of entrepreneurs and real estate pros. Join host Chris Ressa and new guests weekly for amazing insights and thought-provoking stories.

Transcript:

[[00:00:17] Chris Ressa: Welcome to *Retail Retold*, everyone. Today, I’m joined by Kevin Kelley. Kevin is an author and partner at the architecture firm Shook Kelley. I’m excited to have him here. Welcome to the show, Kevin.

[00:00:33] Kevin Ervin Kelley: Thank you so much, Chris. I’ve heard a lot of great things about you, and I’ve been a big follower, so I’m super excited to be here. Thank you.

[00:00:40] Chris Ressa: Thank you. So, Kevin, you have a unique perspective on real estate and architecture. You also wrote a book about that unique perspective. So why don’t you tell everyone a little bit about who you are, what you do, and give us a taste of your book?

[00:01:01] Kevin Ervin Kelley: Sure. I decided to become an architect at six years old. My fixation and obsession have always been about how an environment affects people’s behavior. As a kid, I wasn’t fixated on style, aesthetics, or the beauty of architecture—although I appreciate all that and love beautiful things—but I was more interested in how environments change people’s attitudes. I noticed how environments could make people very friendly and pro-social or very defensive.

For example, I started observing how people approached the post office and why they became irritated, how they lined up at grocery stores, or where they stood or sat in a restaurant. I became fascinated with the subconscious aspects of how an environment affects us—how it can either make us more engaged with a space or make us want to leave. I never imagined there could be a business in it, but then I met my business partner, Terry Shook, while we were both working for a company designing malls. In 1992, we decided to start our own company, Shook Kelley, which focuses primarily on retail or commercial projects, with some institutional aspects mixed in.

We focus on two areas. My business partner handles large-scale macro projects, which could be anywhere from 400,000 to 4 million square feet. I focus more on micro projects, which range from 1,000 to 200,000 square feet. In short, we study how environments affect behavior, focusing on how people convene and come together. This is incredibly important today, as there are many other options for how people get things done, where they go, how they meet others, and how they are entertained. My job is to help retailers like Harley-Davidson, Whole Foods, Kroger, the Cleveland Orchestra, urban districts, and global cities figure out how to bring people to their spaces.

[00:03:06] Chris Ressa: That’s fascinating. Are most of your clients retailers or owners and developers?

[00:03:15] Kevin Ervin Kelley: Both. We have a large volume of developers and owners who have projects all over the United States, and even outside of the U.S. We also work with a large volume of tenants, retail brands, and corporations. Our primary focus has been commercial projects. However, as I mentioned earlier, we are also working with institutions such as universities, colleges, cities, orchestras, and live theaters. These venues generally want to use more retail processes because of the challenges they face.

[00:03:52] Chris Ressa: Tell everyone about your book—what it’s about, and where they can find it.

[00:03:59] Kevin Ervin Kelley: I have a copy right here. I’d love for people to buy it if they can. It’s not a profit center for me; it’s more of a career calling and a cause. It’s called *Irreplaceable: How to Create Extraordinary Places That Bring People Together*.

I try to be sober and realistic about the role that architects play in society. We have many different types of thinkers, all with ideas about how to improve things. Some architects believe everything can be solved through big columns, stairs, and steps, but I don’t. I see architecture as just one aspect of our lives.

Around 2008 to 2010, I started noticing changes in behavior that we all see today. My firm studies people and observes a lot, and we noticed people weren’t making eye contact. They were walking into water fountains, into traffic, and they weren’t present with their own families. Imagine me, every day, sitting out in public with a lawn chair, watching people for weeks or months at a time. We started noticing people on first dates texting the entire time, and families sitting together but never really engaging with each other.

We began wondering, “Is place essential? Do we still need it?” We explored this question from a business perspective and on a social level. What happens to kids who grow up without human contact? What happens when they don’t develop their social skills or learn to make eye contact? These issues started to concern us. We also looked at the larger political and societal implications. What happens when people no longer meet others who are different from them?

For a thousand years, people had to go to the market to get milk and bread, to meet others, and even to be entertained. In doing so, they had to interact with their neighbors, not just exchanging hellos or buying goods and services but also sharing cultural values, rituals, and traditions. These accidental encounters helped societies understand others better. However, if face-to-face contact disappears and people get all their information from social media, it becomes dangerous for society. We know that our society is driven by capitalism, so it’s important that place has an economic position. Our firm focuses heavily on return on investment (ROI), and we have to prove that environment affects behaviors in ways that justify the investment.

[00:07:18] Chris Ressa: I love that. One of the things I find fascinating is that you became interested in how environments affect behavior, and that led you to architecture.

[00:07:37] Kevin Ervin Kelley: Yeah, it’s very atypical.

[00:07:38] Chris Ressa: I would have thought that was more of a social science, right? Maybe something for economists. How did that lead you to architecture?

[00:07:49] Kevin Ervin Kelley: So, when I was in architecture school, we had a building that was open 24 hours, which is typical for architecture schools in the U.S. Other buildings tend to close at the end of the day, but in architecture school, you have your own little studio space. I would look out the window at the art school across the way and wonder, “What’s the difference between an architect and an artist?” I listened to my professors, but I didn’t think they did a great job explaining the difference.

I found that architects often want to be artists, imposing their thesis statement on others and expecting people to fund their vision. For me, the difference was that art is about personal expression, while architecture is about solving someone else’s problem. Architecture is about meeting an audience’s or client’s needs.

What happened to our field is that we became obsessed with style. We fixate on intellectual, abstract, and artistic styles when the real issue we should be studying is behavior. How many people come to a place? How much do they buy? How do they interact? I became focused on those questions. I didn’t initially see a business in it, but when I met Terry Shook, we started putting metrics to it and trying to understand the business side.

In school, one of my professors once suggested that I should be a sociologist. My response was, “No, maybe architecture should be more sociological.” I think we should meet people where they are and stop trying to take them to glass houses if they don’t want to live in them. In our profession, we often try to teach the public what good design is, but the public knows what it wants. I believe we can stretch and expand them, but we don’t need to force them.

[00:11:21] Chris Ressa: Wow, long answer—apologies. Can you give us an example of a project where you found a solution that worked, and why it was so successful?

[00:11:44] Kevin Ervin Kelley: We have hundreds of case studies. The great thing about our process is that we always begin by focusing on the client’s problem, which we call a “positive crisis.” We spend the first third of our time defining the problem as clearly and simply as possible. We ask, “What happens if the client does nothing?” Once we’re clear about the crisis, we create design solutions and ask the client to help measure those solutions’ effectiveness.

We generally get to the problem in three ways. First, we interview the client, and our interview process is more like therapy. Most organizations struggle with change, just like individuals do. We know our behaviors are problematic, but we find it difficult to change. So, we distill the client’s issues and study the industry. Second, we look at the industry’s playing field, understanding how it competes and where the rules are. Third, we study consumers, visitors, or guests. We observe their behavior, looking for patterns and anomalies—subtle deviations that give us insights.

One example is a Canadian grocery store chain called Freson Bros. They had done very well for generations, but then international competitors came in with shock-and-awe pricing strategies. Freson Bros. couldn’t compete on price, variety, or convenience, so we helped them focus on what made them unique. We developed a private label for their Alberta beef, created a sourdough bread program, and designed a smokehouse inside the store. These efforts transformed their chain, making them Canada’s coolest grocery store.

 They won gold in their industry and are thriving because they found a way to communicate value beyond price and convenience.

[00:17:37] Chris Ressa: Fascinating! You mentioned that around 2008–2010, you started seeing changes in how people behaved due to technology. What problems are you solving today?

[00:18:02] Kevin Ervin Kelley: There are so many problems we’re tackling. I’m particularly interested in live venues like orchestras, playhouses, and operas. I didn’t grow up attending these kinds of performances, but I don’t want to see them disappear. We’re over-scheduled and glued to screens for upwards of seven to nine hours a day. Teens especially are spending a lot of time in front of screens. These are hours taken away from human interaction or even going outside the house. There are powerful forces—backed by billionaires and Wall Street—that want to keep us glued to our phones, and it’s threatening physical spaces.

At the same time, younger generations—millennials and Gen Z—are starting to push back. They want to reconnect with the physical world and with other humans. They’re bringing back malls, diners, cocktail lounges, record players, and even flip phones. They’re helping resurrect these things, while baby boomers are the ones who tend to spend the most time on their devices.

[00:21:25] Chris Ressa: Unbelievable. So, give us some context—how big is Shook Kelley?

[00:21:33] Kevin Ervin Kelley: We have around 50 people and two offices. We started in Charlotte, North Carolina, and my business partner, Terry Shook, runs that office. I came out to the West Coast in 2002 to open an office, planning to stay for just a couple of weeks, but I never left. We were doing work in Asia at the time, which was a big growth market, and we expanded from there.

We offer a wide range of services, including architecture, interiors, graphics, brand strategy, and consumer behavior. We have a diversified team, with some focused on design and others on social science and branding.

[00:22:22] Chris Ressa: Out of those 50 people, how many are doing the research and social science work versus the more traditional architectural work, like drawing and drafting?

[00:22:38] Kevin Ervin Kelley: About 30 percent of our revenue comes from pre-design, planning, and research strategy. We don’t do empirical research, but we have an observational and qualitative research process. The other 70 percent of our team works on projects—drawing, permitting, negotiating, and handling construction administration. Building something is a complex process.

[00:23:13] Chris Ressa: Oh, and you still need people to handle permits and stuff like that, right?

[00:23:15] Kevin Ervin Kelley: Absolutely, especially here in LA. We recently had a project that took two years to get a permit, even with an expediter, due to pandemic-related delays. The building departments and inspectors are still catching up. We’re still trying to crawl out of that hole.

[00:23:39] Chris Ressa: I hear you. I know exactly what you mean.

[00:23:39] Kevin Ervin Kelley: It’s particularly frustrating for wealthy clients who have never built anything before. They can’t believe how slow the government works. They think they can call the mayor to speed things up, but I have to tell them it just doesn’t work that way.

[00:24:28] Chris Ressa: Yeah, I know it. We could get off track on this topic. You’re an expert in navigating these challenges.

[00:24:31] Kevin Ervin Kelley: Oh man, don’t get me started. But I agree—permits and red tape can be a nightmare.

[00:23:39] Kevin Ervin Kelley: I mean, the thing I’m sure you’re used to, Chris, is what shocks me when I have a wealthy client who’s never done a building before. It’s very dangerous because they can’t believe that our government works at this pace. And it’s not to criticize the government—I’m not beating the government up—it’s just that things are a lot more complicated than people sometimes realize. They always think they can scream, yell, or influence the process by calling the mayor. But I always tell them it’s going to take a while. Probably the number one question I get is, “How fast can I open this restaurant?” or “How fast can I open this venue?” And you know, the real answer is, a year and a half, minimum. They never want to hear that—they want it in six months. I tell them, we will represent your interests as best we can, but it’s very hard to get all the other parties to move that quickly.

[00:24:28] Chris Ressa: Don’t I know it. Okay.

[00:24:29] Kevin Ervin Kelley: We could get off track on this.

[00:24:31] Chris Ressa: We could get off track on this, and you’re an expert at it. We could get off track on this. Oh, man.

This has been absolutely fascinating. Really appreciate your time. Where can people find you? Where can they find your book?

[00:24:50] Kevin Ervin Kelley: You can find it at kevinirvinkelley.com. That’s K-E-V-I-N-E-R-V-I-N-K-E-L-L-E-Y dot com. There’s a website where you can read reviews from Financial Times, Motley Fool, Malcolm Gladwell’s organization, and a variety of other people. The firm’s website is shookkelley.com—that’s S-H-O-O-K-K-E-L-L-E-Y dot com.

I think the important thing for all of us to understand is this isn’t just a real estate issue or a retail issue, or even a construction issue—it’s really about societal concern, about saving some room in our lives for place. It doesn’t mean digital is the enemy, or that we’re going to switch entirely back to physical spaces, but we just need to save some room in our lives for physical human interaction. Everything in your body is designed for human interaction—the eyes, the ears, our senses. We were hardwired that way, and we’re going against our nature by not stimulating those parts of our bodies regularly. So, I encourage everyone to think about this—whether you’re a developer, a dad, a mom, a principal at a school, or a mayor. Just take a look at it. Interestingly, our biggest audience so far has been city mayors reading the book.

[00:26:16] Chris Ressa: I was about to end it, but I have another question.

[00:26:18] Kevin Ervin Kelley: Sure, go ahead.

[00:26:19] Chris Ressa: When you go in front of a client, how much pushback do you get on your process and how you view the world? I would imagine that there’s some pushback because, you know, a lot of capitalism is driven by the question: “How do I generate ROI from what this guy’s saying right now?”

[00:26:41] Kevin Ervin Kelley: That’s what I do all day—stand in front of boards, committees, and leadership panels. That’s my job. I often joke that my job is convincing spreadsheet-driven skeptics of the power of emotions. The way I shut down skepticism is by showing case studies. I can show case study after case study, and it’s all ROI-driven. At a minimum, we’re increasing sales by 25% without changing the product, price, or service—just by changing the environment. And in some case studies, sales go up by 300%, or even 600%, without changing the product, price, or service level.

That opens people’s minds. We take for granted that we are always in a place—whether we’re doomscrolling or engaging over a meal, we’re always in a place. But we aren’t always aware of how that place is affecting us. It’s a secret science. So many people—whether you’re a banker, a developer, or a leader of an institution—can benefit from this. Once you understand how people are subconsciously influenced by their environment, you can start to change their behavior.

Our brain makes many decisions automatically, just like blinking or breathing. Our bodies are designed to delegate those decisions to our senses. And if you want to change someone’s mind or behavior—if you want them to buy more, stay longer, or come more often—you need to start with the senses. That’s the foundation of everything.

Your eyes, ears, and sense of smell are involuntary. You can’t just choose not to smell something without holding your nose. Your body is designed to read the environment through its senses. So why wouldn’t MBAs, architects, or leaders study the senses? We’ve dismissed the senses, but they’re one of the most influential qualities we have. Even the language we use to describe people is full of sensory terms: “tough as nails,” “slick,” “hard-headed.” Our senses shape how we think. Once you understand that, you’ll understand how to influence people, attract behavior, and shape it to fit your goals.

[00:29:28] Chris Ressa: I feel like we’ve been focused on visuals for a long time. Visuals are probably the most prominent, right?

[00:29:47] Kevin Ervin Kelley: Yes, about 30% of your brain is dedicated to your visual sense—just like when your phone processes video, it uses a lot of memory. Visual data is heavy. It’s the same with our brains. Processing visual stimulation takes a lot of resources. Ironically, though, vision isn’t our most powerful sense. It’s our most used sense, but our most powerful sense is smell. We remember the scent of baby powder or cinnamon. When you experience déjà vu, it’s often triggered by a smell rather than what you’re seeing.

Yes, we’re heavily dependent on visuals, but while we are obsessed with visuals in commercial design, real estate, and city design, we often approach them intellectually and abstractly. But the human body doesn’t work that way. When you walk outside or toward a wall, your brain isn’t consciously analyzing everything. Instead, you move toward things that enhance your life and avoid things that impede it. This is how the “lizard brain” is wired.

People tend to move toward things that are comfortable and avoid things that look harsh, modern, or austere. That’s why some places may be aesthetically striking, but they don’t make people want to stay. When we look at architecture magazines, we focus on the visual appeal, but we don’t always consider how it feels to actually be in that space. It’s like going to a movie: You might forget about your taxes or your problems because the movie engages your emotions. Similarly, when we design spaces, we need to engage people’s senses and emotions.

[00:33:12] Chris Ressa: You know what I want architects to get offended about? That they don’t get offended enough when they don’t work fast enough. I want them to get offended about that!

[00:33:22] Kevin Ervin Kelley: I get it, but creativity isn’t a linear process. It’s random, with ideas colliding in unexpected ways. Innovation, not just in design, is inherently inefficient. Part of the problem in retail is that we’ve been trying to make things more efficient instead of more innovative. But physical retail will only survive through innovation. The old malls and department stores can’t keep going to market the same way—they need to totally change how they operate. But the desire for place isn’t going away, and we have plenty of success stories to prove it.

[00:34:11] Chris Ressa: Well, Kevin, this has been a fantastic conversation—a plethora of information. I look forward to connecting more. Thank you so much.

[00:34:19] Kevin Ervin Kelley: Thank you, Chris.

[00:34:20] Chris Ressa: Thank you.