E-Commerce Retailers Plan 850 Physical Stores in the Next 5 Years0 Comment
JLL releases new research report on the growing Clicks-to-Bricks retail segment
JLL released its latest research report titled, “How e-commerce brands get physical” which analyzes and discusses the growing trend of E-Commerce retailers opening up Brick and Mortar retail locations. The report findings show that several major previously online only retailers such as Casper, Allbirds, and Adore Me are all looking to open up a large amount of brick and mortar retail locations off the back of their e-commerce success.
“This is a very interesting time in retail real estate, especially when it comes to the types of firms filling the vacancies,” said James Cook, Americas Director of Research, Retail. “It seems that many retailers that started online are looking to move into the brick and mortar space once their brands become established.”
JLL analyzed the histories and expansion plans of 100 of the top digital retailers to evaluate their strategies. Through their analysis, JLL found that New York remains the top city for both pop-ups and first permanent locations with marquee markets like Los Angeles and San Francisco being popular choices for retail locations as well. In fact, more than half (59.5%) of clicks-to-bricks retailers opened up pop-up locations in New York, with more than a third of them (41.3%) opening their first permanent location there.
The report further found that the New York neighborhood of Soho was one of the prime retail locations for pop-up stores where e-retailers are testing new concepts to intrigue and bring in potential customers. Online glasses retailer Warby Parker was one of the first clicks-to-bricks retailers to open up a retail location in Soho back in 2013, the brand currently has 75 physical retail stores across the United States. This supports JLL’s findings that the majority of clicks-to-bricks retailers (74.3%) are apparel and accessory brands with houseware brands like Casper making up the second largest segment (11.4%) of the market.
Another aspect of the click-to-brick segment are showroom retailers, or a retail location where customers only try on or inspect products that are then shipped to their homes after purchase. While some major e-commerce brands like Casper, Bonobos, and M.Gemi all operate showroom locations, only 15.1% of clicks-to-bricks stores have physical locations that don’t carry inventory. Of those according to JLL’s findings 69.2% are apparel and accessory retailers while houseware and furniture retailers make up the remaining 30.8%.
“It makes sense that e-commerce retailers that sell apparel and home goods are looking to move into physical stores, since their products are the type consumers like to inspect in person,” added Cook. “As these e-commerce brands mature we believe based on our reasearch that those in the apparel and home good segments will continue making the transition to a clicks-to-bricks retail format.”