JLL: E-commerce retailers plan 850 stores during next five years
Digitally native brands will fuel the next wave of store expansion.
That’s according to a new research report from JLL, which found that e-commerce retailers plan to open 850 stores in the next five years. The report cites such examples as mattress-in-a-box brand Casper, which will open 200 stores within three years, and women’s lingerie brand Adore Me, which has announced up to 300 additional stores in five years. All Birds, the eco-friendly footwear brand, is also opening stores.
JLL, which analyzed the histories and expansion plans of 100 of the top digital retailers to evaluate their strategies, found that New York City remains the top city for pop-ups as well as first permanent locations, with marquee markets like Los Angeles and San Francisco also being popular choices. More than half (59.5%) of clicks-to-bricks retailers opened up pop-up locations in New York, with more than a third (41.3%) opening their first permanent location there.
Manhattan’s SoHo neighborhood was one of the prime retail locations for pop-up stores where e-retailers are testing new concepts — almost half of clicks-to-bricks retailers in New York chose SoHo for a first pop-up. These retailers typically choose storefronts off Broadway, where it’s easier to find smaller footprints but still benefit from ample foot traffic.
Other findings from JLL’s report, “How e-commerce brands get physical,” are listed below.
• The year 2017, saw the greatest number of clicks-to-bricks retailers. Everlane, Allbirds, Away and MM.LaFleur were among the brands that opened permanent physical locations last year.
• The top cities for a first permanent location are New York City (41.3%), followed by Los Angeles (12.0%) and San Francisco (12.0%), and Chicago (5.3%).
• Most (74.3%) click-to-bricks retailers sell apparel and accessories.
• Half of all clicks-to-bricks retailers have high price points; 32.0% are mid-priced retailers.
• The average clicks-to-bricks store size is 2,808 sq. ft.
• Only 15.1% of clicks-to-bricks physical stores don’t carry any inventory. Of those that operate as showrooms, 69.2% are apparel and accessory retailers. 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,” said James Cook, Americas director of research, retail, JLL.
“As these e-commerce brands mature we believe based on our research that those in the apparel and home good segments will continue making the transition to a clicks-to-bricks retail format.”
Developer who saw the writing on the mall wall about Sears
Reports are circulating in the business press this week about an impending bankruptcy filing from Sears, but one Northeastern mall owner began preparing for this day years ago.
Since 2012, the roster of active Sears stores at PREIT malls has declined from 27 to just four. In the last year, the Philadelphia-based company proactively replaced five Sears locations and has reached an agreement to recapture a sixth.
Brands now residing in former Sears spaces at PREIT malls include Burlington, Field & Stream, Sierra Trading Post, Dick’s Sporting Goods, Whole Foods, Tilt, and Edge Fitness.
“Just as we were proactive in disposing of lower-productivity malls, we have positioned ourselves well with minimal exposure to Sears in the event of potential material store closing event,” said PREIT CEO Joe Coradino.
Simon looks to remake mall with an NHL team
Simon Property Group has always striven to put its malls cut above the rest with top-drawer tenants. Now it’s pushing the experience envelope by courting a National Hockey League franchise.
Simon has joined the effort of NHL Seattle to bring a team to that town. Should it come to fruition, the new franchise’s headquarters and training center will become the centerpiece of a transformation of Seattle’s Northgate Mall into a “world class, transit-oriented mixed-use center,” COO Michael McCarty said at the announcement of the partnership at Northgate yesterday.
Earlier this year, Simon announced a multi-year project to take advantage of a planned light rail station near Northgate to make it over as mixed-use with the addition of some 1,200 residential units, 800,000 sq. ft. of office space and 500,000 sq. ft. of retail.
The promise of an NHL headquarters alters Simon’s plan to include a large central park and gathering space that would incorporate the practice facility and link it to the rest of the project and nearby neighborhoods.
A press release from Simon stated that the project would feature a “next generation anchor by blurring the lines and creating a unique indoor/outdoor, publicly accessible space.”
That’s if Seattle gets its hockey team. It’s considered a leading candidate because the NHL is absent from the northwest market, but the renovation of Key Arena, where the team would play, is not scheduled for completion until 2020. Other contenders for franchises like Kansas City, Houston, and Quebec City have arenas in place.