Online Retailers: The Next Hottest Trend in Brick and Mortar

by Camren Skelton

Some of today’s hottest retail concepts are discovering what companies like Warby Parker, Bonobos and Amazon already know: that a truly effective omnichannel experience cannot be achieved without a physical presence.

“Having an omnichannel marketing campaign increases sales on many fronts,” says Christopher Maling, executive vice president of retail investments in Colliers International’s Los Angeles office. “These strategies are based on demographics and age, among other things. Some shopping habits are set with the need to purchase in a physical brick-and-mortar environment, and then there are those consumers who are more comfortable with the online shopping experience.”

If your goal is to capture both of these groups of shoppers, then a website with an order form is only part of the equation. The physical storefront fills in the rest of the pie. While some customer cannibalization can happen between the two avenues, the benefits tend to far outweigh the challenges.

Dave Gilboa, founder of Warby Parker, recently noted that more than half of the eyewear company’s sales are now completed in physical stores, with about 75 percent of in-store customers having visited the website first.

Amazon, Warby Parker and Bonobos may have started the trend of online stores seeking out brick-and-mortar presences, but they certainly aren’t the last. Many others have followed suit, including Athleta, Gymshark, Zappos, Glossier, Away, Everlane and Boohoo. Though not every online retailer is right for every shopping center, Maling does believe there are a few solid strategies these companies can utilize when determining the appropriate physical presence for their brand.

“Focus on starting small in major MSAs [metropolitan statistical areas] with a footprint that is larger than a pop-up, yet smaller in size so you don’t have to carry too much inventory,” he says.

Landlords must do their part as well by staying on top of the up-and-coming online retailers likely to strike gold with consumers.

“Landlords should be open and adaptive — and look at these companies’ social media followings,” Maling continues. “If that retailer has a tremendous following, they will bring bodies to the store and center — and other retailers benefit from their synergy.”

Andrew Turf, senior vice president of retail advisory and transaction services in CBRE’s Los Angeles office, notes that these newer online retailers can be very selective when it comes to their physical locations.

“These online retailers are likely to target new-age retail and entertainment destinations,” he says. “They like places like the Grove in Los Angeles, Lido Marina Village in Newport Beach and the Royal Poinciana Plaza in Palm Beach.”

Like Maling, Turf also believes it’s essential for landlords to stay abreast of social media happenings to track the top potential tenants. This is, after all, where the retailer’s consumers go to browse the latest trends, discover the hottest companies and educate themselves on that brand’s story. And we all know how important storytelling is — particularly with Millennials — in this new retail environment.

“In today’s world, people want to know the full story of a brand,” Turf says. “The experience of the store is just as important as the online shopping experience, which is just as important as where the clothes are made and how they are made. A customer needs to be able to walk into a store and experience the clothing and the brand. Being omnichannel is much more important than being a single channel.” 

This article originally appeared in the Retail Insight newsletter by Shopping Center Business. This is a six-week publication created in conjunction with our content partners, which sponsor the newsletter, leading up to ICSC RECon and including post-conference coverage. Click here to subscribe. 

You may also like