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News release

ATLANTA, GA

Let’s Take This Offline: Retail’s Migration Back to Honest-to-Goodness Storefronts

E-tailers shift strategies to include physical locations to drive customer retention and boost sales


​ATLANTA, Mar. 6, 2014 — Fifteen years ago, online-only retailers didn’t exist but today there are more than 100,000 e-commerce retailers active in the United States[i]. While e-commerce is growing leaps and bounds, online transactions only represent 6 percent of total retail sales[ii], and while that number is set to double by 2020, bricks-and-mortar will remain a key driver to growth. Online-only sales strategies represent the ultimate in flexibility and cost-cutting, but the recent Clicks to Bricks: Why Online Retailers are Opening Stores report by JLL Retail said an increasing number of web-only retailers are planting a stake in old fashioned, bricks and mortar storefronts to maximize their sales.

“The virtual shopping game is changing. Even the most tech-savvy shoppers sometimes need to touch and feel the products they’re buying,” said Lew Kornberg, National Practice Lead of Retail Tenant Representation at JLL. “It isn’t enough to have a purely bricks and mortar location, and we’re quickly finding out the same goes for a digital-only platform. To get the best of both worlds, e-tailers are reevaluating their current sales strategy to include physical locations, because the more touch points retailers can offer to shoppers the better.”

While retailers are expanding their web and mobile sites, and building strong logistics systems, e-tailers are now clamoring for physical space. There are benefits to physical retail space that can’t be imitated online with current technology, and these stores have unique qualities to capture consumer’s attention. Online-offline stores typically showcase goods, and offer consumers a unique experience that’s difficult to replicate by using sensory appeal and high-tech gadgets. Retailers doing it right include:

  • Originally an online-only eyewear company, Warby Parker began to experiment with physical spaces by opening small showrooms, shop-in-shops and pop-ups across the country, going so far as to retrofit an old school bus into a traveling store. The retailer opened a 2,000 square-foot flagship store in New York City's SoHo neighborhood that has the look and feel of a classic library where shoppers can schedule an eye exam with an in-house optometrist, receive their glasses by mail or through store-pickup, and even browse through a selection of books from small independent publishers. 
  • The online jeweler, Gemvara, recently opened a temporary store on Newbury Street in Boston to test the market. The highly interactive store allows consumers to configure jewelry using tablets and computers, and to have their purchases shipped directly to their homes. While in the store, shoppers receive expert advice from jewelry consultants, get a tutorial on gemstones, trends and jewelry care, and even receive a free set of stud earnings with any purchase.
  • Bonobos.com was founded in 2007 to provide men with better fitting clothes and make shopping an easy and hassle-free experience. While they found online-only suited some of their needs, they Guideshop, one-on-one shopping environments, designed to serve as highly personalized extensions of Bonobos' online store. Guideshop "guides" work with each customer during appointments, which take fewer than 45 minutes, depending on a shopper's needs. The store accepts walk-ins, but suggests shoppers book appointments in advance. The space is inventory-free but offers a full display of merchandise and sizes to try on. The absence of inventory combined with intimate setting shifts the focus at Guideshop to the customer, instead of the product.

JLL’s Retail Group serves as the industry’s leader in retail real estate services. The firm’s more than 850 dedicated retail experts in the Americas partner with investors and occupiers around the globe to support and shape investment and site selection strategies. Its retail specialists provide independent and expert advice to clients, backed by industry-leading research that delivers maximum value throughout the entire lifecycle of an asset or lease. The firm has more than 80 retail brokerage experts spanning 20 major markets, representing more than 100 retail clients. As the largest third party retail property manager in the United States, JLL’s retail portfolio has 305 centers, totaling 65.7 million square feet under management in regional malls, lifestyle centers, grocery-anchored centers, power centers, central business districts, transportation facilities and mixed-use projects.

For more news, videos and research from JLL’s Retail Group, please visit: www.jllretail.com

About JLL
JLL (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $4 billion, JLL operates in 75 countries worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3 billion square feet and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $47.6 billion of real estate assets under management. For further information, visit www.jll.com.