Physical retail isn’t dying, but retail as we know it is shifting beneath our feet. While it’s true that some retailers are closing locations due to the “Retail Apocalypse”, many online-only retailers are moving into their first physical store locations. These brands are capitalizing on the recent closures of some traditional retailers, creating new opportunities to expand and improve their businesses.

Despite news reports that major retailers such as Toys “R” Us, Sports Authority, and Sears have filed for bankruptcy and shuttered stores nationwide, retail continues to flourish.  As a matter of fact, the National Retail Federation reports that for every store that closed in 2018 in the U.S. another 2.7 stores opened.  Shifts in the industry have created a greater opportunity for online-only retailers to move into their first physical locations. Simultaneously, established brick-and-mortar retailers are keeping relevant by collaborating with digital brands to increase traffic and reshape the retail experience.

For example, national retailer Kohl’s is demonstrating this innovative approach flawlessly by introducing “Curated by Kohl’s”. In 2020, Kohl’s will partner with Facebook on brand curation, identifying and engaging with brands that have built a strong online presence and allowing them the opportunity to reap the benefits of the retail experience. Customers, too, will benefit as they discover emerging brands when shopping.

Mattress retailer Casper is yet another online brand that has embraced the brick-and-mortar environment. It wisely capitalized on the announcement that Mattress Firm, one of its major competitors, was filing for bankruptcy and closing more than 500 stores. Taking advantage of an opportunity to reach even more customers, Casper launched its first retail store in New York City and is planning to open more than 200 locations in the next three years.

For retailers to be successful, in-person experiences must be so engaging and memorable that they effectively compete with the convenience of online shopping. Casper does this by offering pop-up shops where customers can test its products by taking a nap for $25 a session. Casper’s efforts demonstrate how next-generation retailers are leaning into immersive, in-person shopping experiences.

Warby Parker, which sells prescription glasses and sunglasses, is another online brand that continues to thrive since opening its brick-and-mortar stores. Customer demand to try on glasses before making a purchase drove the retailer to invest in physical shops. These shops have given Warby Parker even greater exposure and the opportunity to improve their business as demand for their products has increased.

Retail is undergoing a transformative period in its long history, and the future looks bright as more online retailers move into brick-and-mortar stores. Retail centers that embrace online brands as tenants can feel optimistic that they will benefit from increased foot traffic and a fresh look.

What online retailers are you seeing move into brick-and-mortar stores? Do you consider this a passing fad or a long-term trend?

Marcus Lambert, our student intern and associate, is taking over CPD’s blog to tell you about his experience at this year’s ICSC Southeastern Conference.

“Being a newcomer to the industry, this conference was my first introduction into the networking and marketing side of the commercial real estate industry. I was able to absorb the experience and all that it had to offer. Here are the Top 5 things I learned at this year’s conference.

  1. In the world of commercial real estate, connections matter. As I browsed around the conference waiting for the next panel discussion to start, I couldn’t help but notice that almost 90 percent of the attendees were all engaged in some sort of conversation with one another. I had the pleasure of making a few connections myself, knowing that they could one day turn into future deals or collaboration efforts.
  2. In the growing industry of e-commerce, there is still a high demand for actual brick and mortar locations for consumers. Retailers are figuring out that the two coincide with each other to bring in more business.
  3. Shopping center owners and developers are turning to experiential marketing tactics to help draw more traffic to their centers and keep consumers in the shopping centers for longer periods of time. Experiential Marketing tactics are strategies used to directly engage the consumer and create a customized experience for the consumer while visiting the shopping center.
  4. In almost all the sessions I attended, I noticed that there is a trend that the target demographic for developers and retailers is the “mother of a family”. Understanding that the mother is the most likely to visit these centers and is the main shopper for the household.
  5. For this being my first conference, I learned that attending these conferences can be very beneficial to any Commercial Real Estate professional’s career. There is an unlimited amount of knowledge and networking opportunities that can be made attending ICSC events.

The conference this year was amazing and such eye-opening learning experience. I look forward to attending more of these events. What did you learn at this year’s ICSC Southeast Conference?”

Corporate Property Dispositions, a leading real estate advisory firm founded in 2003, works in partnership with companies to divest their surplus commercial properties. With over 200 years of combined real estate experience, our skilled professionals provide clients with the knowledge, key information and guidance needed to make informed decisions regarding their real estate portfolio. Our strategic counsel and results-driven approach convert our clients’ potential property value into delivered value.