Companies that started their existence on the internet increasingly are embracing the storefront, a sign that a long-heralded doomsday scenario for retail properties might be overstated.
So-called “clicks-to-bricks” retailers are set to open 850 stores over the next five years, according to JLL research.
“Everyone is saying that physical retail is dying, but online brands are opening at a pretty fast and aggressive rate,” says Taylor Coyne, Research Manager of Retail for JLL. “It’s interesting to see that happen in the face of all the doomsday scenarios.”
For years, big online retailers bucked the idea of bricks-and-mortar spaces, where the cost just wasn’t deemed necessary. But a realization that physical experiences still have a part to play in consumer habits has prompted the shift, even for businesses operating primarily in cyberspace.
Eyewear brand Warby Parker has 75 stores around U.S., having opened their first one in 2013, according to a 2018 JLL report. Mattress-maker Casper is planning to open 200 stores in the next few years, while lingerie brand Adore Me is on track to have 300 locations by the end of the decade.
Still, clicks-to-bricks companies are doing retail their way. Digitally native forays into brick and mortar reveal many common threads. Here are four of them:
- They lease small, “experiential” spaces
Online retailers often do a trial run with a pop-up and, when they secure longer-term space, average out at around 2,800 square feet, JLL data shows.
“That’s a fraction of department store sizes,” Coyne says. “Brands are streamlining what they have and making the experience of the store the focus.”
Hatch, a New York-based brand focused on stylish maternity clothes and apothecary-style beauty products has a “Cravings Bar” at its New York and Los Angeles stores, where shoppers can indulge in pickles and ice cream.
- They head West – and East
New York and Los Angeles were the top two locations for both pop-ups and leased locations, according to the JLL report.
New York City was the top choice, with some 41 percent of online brands opening there.
The SoHo neighborhood is particularly popular with pop-ups. Almost half of clicks-to-bricks retailers in New York chose SoHo for a first pop-up. Despite overall rising vacancies along Broadway in SoHo, the prime urban corridor remains the destination for online retailers to test new concepts and to woo new and existing customers, says Coyne.
The West Coast is also a favored destination. Los Angeles and San Francisco tied for second place at 12 percent each.
Accessories brand St Frank is exemplary of this trend. The retailer has three outposts between San Francisco and New York, and opened its fourth location in the Pacific Palisades area, outside Los Angeles, in October.
Koio, a brand of upscale casual footwear, began with one store in New York’s SoHo district and opened up a Venice, California outpost in October.
Women’s fashion brand Wildfang recently opened a boutique in Los Angeles, after its original one in Portland, Oregon.
- They’re fashion forward
Some 74 percent of clicks-to-bricks retailers are in the apparel and accessory business, according to JLL.
Menswear is a significant presence amongst them. Bonobos, for example, opened 19 stores in 2017. Custom menswear brand Indochino, a 13-year old company that only sold online for the first nine years, now has 34 showrooms around the country. It just opened its latest in Orange County, California, in October.
These brick-and-mortar locations “give customers the ability to go in and touch and feel something before buying,” Coyne says.
The next biggest growth segment is the furniture and home accessories space, Coyne says.
“If you’re going to spend a significant amount of money on a couch or a bed, a cool showroom experience can seal the deal,” she says.
- They host events
Special events drive foot traffic and generate buzz. Clicks-to-bricks retailers seize on opportunities to bring their online followers to the store.
“In the age of social media, what your presence is online, and how you are interacting with your customers, should translate to your brick-and-mortar presence,” Coyne says.
At Dolls Kill, a San Francisco-based retailer that opened a flagship store in Los Angeles in August, lines stretched around the block once the retailer announced limited edition Coachella pieces exclusively available there.
Neil J Rodgers, the British-born, Los Angeles-based shoe designer, regularly opens up his West Hollywood boutique for drinks with celebrity stylists and influencers, helping to generate buzz around the brand. The shoemaker noted that, while his online shoppers would only buy one pair of shoes at a time, in the store, it was normal for them to buy three or four simultaneously.