REAL ESTATE

5Qs for James Cook on clicks-to-bricks expansion

BY Al Urbanski

For some time now, the global real estate services company JLL has been tracking online retailers cautiously tiptoeing into physical retail, but the pussyfootin’ days appear over for growth-hungry e-coms. A JLL study of more than 100 digital retailers released this week found national expansion strategies to be commonplace. We made a call to JLL research director James Cook to learn more about these click-to-brickers with some 850 stores in the pipeline.

At our SPECS conference this year, Warby Parker’s director of real estate said the company preferred urban street locations for the constant traffic, and your study lists New York and L.A. as top spots for e-com pop-ups. Is this just a streets thing? Will they ever end up in shopping centers?
This is way beyond being a streets thing. It is now a full-fledged shopping center thing. The retailers we tracked in our study started by opening stores in high-traffic urban areas and all are now in shopping centers.

What kinds of malls and shopping centers will e-coms favor?
Most of them are in A malls and lifestyle centers in A markets. They’ll start with the primary markets, but they soon move into secondary and even tertiary markets. They’ll start with a few stores or pop-ups but have ambitious plans. Warby wants to do 25 a new stores a year.

How much of the expansion strategies of these e-coms is branding and showrooming and how much of it is volume?
We were surprised to find that only 15% of these clicks-to-bricks stores are showrooms. It’s a very small percentage. We thought showrooms would be a bigger segment. You do have some big brands like Bonobos and Untuckit that are primarily showrooms, but we’ve found that most of them are learning that people come to their stores to try on clothes and take them home with them.

Your study mentions Adore Me having plans for about 200 stores, but our editors tell me hardly any have opened. Are some brands floating the notion of physical expansion and looking for funding at this point?
I can’t speak specifically to Adore Me, but it’s been our experience that retailers who make announcements about expansions that they’re willing to attach a number to generally have the capital to do it. The vast majority start moving into the physical space by testing out popups, but we’ve seen many that have really doubled down and are expanding aggressively.

Most click-to-bricks breakout brands are in apparel, accessories, and furniture. What’s the next big product category you expect to break out?
Cosmetics and beauty. There are a lot of online beauty brands that would benefit by moving into physical retail. There are a lot of online pure-plays in this segment catering to both mainstream and niche markets. The Ultas of the world do a great job, but there is definitely room for expansion.

Connect with me on LinkedIn | Follow me on Twitter

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Do you expect your business to be challenged by the ongoing escalation of the the heightened U.S.-China trade dispute?