The Everest Newsletter: Commercial, February ’19 Edition
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Just the Peaks This newsletter, at a glance
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Omni-channel shoppers want a truly integrative experience
Here’s how online retailers are cashing in on the trend
For years, headlines have chronicled the depressing downfall of brick-and-mortar retail. In fact, many of the most recent casualties of the so-called ‘retail apocalypse’ are huge names—Brookstone, Nine West, and Mattress Firm, to name a few.
People assume the success of Amazon, Walmart.com, Target.com and other virtual sellers has made it impossible for physical stores to thrive. With cheap deals, fast shipping and hassle-free returns, online shopping is remarkably convenient. But when it comes to disappearing department stores, is ecommerce really to blame?
Actually, CRE researchers say the culprit is much closer to home. Today’s shoppers have forced sellers to embrace a multichannel approach, which goes beyond social media, mail marketing, mobile access and the online experience. They’re now demanding seamless continuity into actual, physical stores.
From clicks to bricks
Research suggests that roughly 850 ‘digitally native’ brands will open in-person stores across America by 2024. Although many states won’t realize the impact, big coastal cities like New York, Los Angeles and San Francisco will see an increased number of showrooms, the majority carrying inventory for purchase.
As of 2019, online retailers that experimented with the ‘pop-up’ format have found great brick-and-mortar success. One example is Warby Parker, the online eyeglass giant that opened up shop on Greene Street in SoHo six years ago. Today, the brand boasts over 75 locations across the United States.
The trend has also inspired traditional retailers to reinvest in their physical stores. To execute a true omnichannel experience, companies have to align their brick-and-mortar spaces with other brand platforms, from desktop to smartphone and beyond.
The return of the retail store
Optimism by the numbers
- Today, nearly 60% of all ‘click-to-brick’ pop-up retailers chose New York as their city, with 41% setting up shop permanently
- 67 million people shopped in stores on Black Friday 2018, leading experts to predict salestoskyrocket in 2019
- Despite misleading headlines, strip mall and community center vacancy rates are actually at a 15-year low at 4.5%
Stats reported by Bisnow.com, Oct-Dec 2018
There’s so much more in store
Investors worried about the online revolution must realize that brick-and-mortar stores still matter. In particular, retailers selling any kind of apparel, accessories or makeup can help differentiate themselves by establishing a physical presence. People want to connect with the brand and interact with products beyond the screen.
“Retailers are finally starting to realize the value of their real estate,” says Melina Cordero of CBRE Group. “They can’t just close a store and rely on online, they really need the store for profit margins, customer attention, customer acquisition, for lots of reasons. We’re going to see a lot of reinvesting in the store and a lot of reinvesting in strategies to get people in the store.”
There are more myths to debunk in 2019