Web Based Stores Move to Suburban Malls
Source：Bloomberg
From：Taiwan Trade Center Chicago
Update Time：2019/01/24
Brands that came to prominence as online only such as Warby Parker, Bonobos, and Casper are moving into brick and mortar locations in suburban malls left empty from the recession. In a trend known as ‘‘clicks to bricks’” big named online retailers like Amazon as well as more niche startups like Madison reed are opening over 600 physical stores across the US. At the beginning of this movement online stores were opening brick and mortar locations as a way to improve their brand awareness and receive some publicity. Though not much was initially expected for the physical locations, but a traditional store front is becoming increasingly prominent in stores long-term growth plans. Furthermore, the stores are increasingly being located in areas throughout the south and Midwest. These retailers are finding online advertising more expensive, they are also experiencing an increasingly crowded marketplace where it is difficult to grab the attention of customers scrolling through their Instagram feeds. Simultaneously the cost of opening a physical location is cheaper than ever before. As department and chains stores close, there is a mall vacancy rate of 9.1% in the last quarter. Meaning that online stores can snatch up prime mall locations at the lowest rates since the heights of the great recessions. Mall owners are also adapting to the needs of online retailers. Appreciating that online retailers do not carry stock and require less space, mall owners are also offering shorter leases accommodating the popular trend of pop up locations. As a way of reducing risks for online retailers some mall owners are evening accepting a small percentage of the store sales eschewing the traditional monthly rent. Other malls owners are seeing online startups as investment opportunities. Online retailers are cautious about investing too much into physical locations, but have the benefit of observing the lessons that retailers have learned over the last century. Armed with the hard learned lessons of other retailers and an unparalleled levels of data, online retailers think they know how to be successful in the virtual world and the real world.
Source:
By Matthew Townsend Bloomberg Businessweek
https://www.bloomberg.com/news/articles/2018-10-22/warby-parker-and-casper-are-coming-to-a-strip-mall-near-you?srnd=checkout