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Old school experience, new school technology

When the in-store experience and opportunity to buy online is combined, sales increase all around. Yet, how do retailers go about creating a smooth, strategic integration when choosing to go brick-and-mortar?

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In today’s digital age, consumers’ expectations of their beloved brands are expanding. Shoppers now have an increased need for a more personalized shopping experience – which only a physical retail store can deliver.

The firm L2 found that 75% of online shoppers worldwide consider the brick-and-mortar experience the most important when making a purchase. Consumers miss out on physical interactions with people and products when they choose to online shop. In our experience, online sales increase by at least 60% after an online retailer opens a physical store. Stores help customers get to know the brand in-person, which gives them confidence to buy online.

When the in-store experience and opportunity to buy online is combined, sales increase all around. Yet, how do retailers go about creating a smooth, strategic integration when choosing to go brick-and-mortar?

By creating both a memorable experience and using technology and big data strategically.

Experience: On a recent webcast the CEO of Sweaty Betty, said their locations are providing at least 100 free workout classes every week for up to 2,000 people. They are making their stores an interactive, fun environment for shoppers. Sweaty Betty also has cafes within a few of their stores to promote what they preach, a healthy lifestyle. Allowing for shopping, eating and exercising to be at the fingertips of every customer that walks in their store has proven to increase their sales. Creating a unique experience to better promote the brand goes beyond the transaction. It makes the store a place of interaction and socialization and younger customers are engaging more with experience versus digital.

Technology: The biggest opportunity for retailers is to align the continuity of their store online and off – and technology in-store can help connect the two. It’s not easy to find the right tech tools that embody the brand and allow for personalized shopper interactions. But, when retailers get it right, it works. A high-fashion brand based in London recently installed kiosks and digital displays in-store. These kiosks collect data on their customers by sorting their likes and dislikes of their products. Once the customers leave, the data is store and calculated and the retailer goes a step further. At a later date, the customer then receives similar products to those liked which spark an interest in future purchasing. It’s not just big data anymore – it’s big useful data. This process creates a more personal experience between the retailer and customer. The customer feels as though the retailer knows exactly what their likes and dislikes are, and that is itself is something special.

Want to learn more about how to create a brick-and-mortar experience for your online brand? Reach out to Marilynn Joyner  + Erin Grace.

2. Blend and extend, the newest smoothie option? Not exactly, it’s actually a way to reduce your rent for an immediate positive financial impact. Blend and extend is used when you extend the base lease term – so you have a space for, say, your current remaining term of 3 years, and you lock in that rental rate or a lower rate for an additional 5 years or so. “By doing a blend and extend, your rent projection is immediately reduced, making a direct impact by lowering the store’s occupancy cost. In many cases, when you exercise a future option early you’ll get a reduced rate – blending the term and the rate,” added Tom Mullaney, Managing Director of JLL’s Restructuring Services. This is an option is almost always a win-win because a landlord locks in firm terms months in advance, and the tenant gets a rent reduction for extending their lease early.

Real-life example: During 9 months, we were able to save a chain of party supply stores over $9 million dollars through 23 lease restructures by obtaining rent reductions for viable locations and negotiating extensions in exchange for savings at profitable locations. The savings obtained in this on-going project allow the company to lower occupancy cost as a percentage of sales and increase overall profitability.

3. Ready for a remodel? The remodel cycle seems to be getting faster and more expensive every year. But byobtaining landlord capital contributions for upcoming store remodels, JLL can help retailers to remodel more locations while not increasing their overall budget. Grams shared, “One of the simplest ways to optimize your liabilities is to ask your landlord for contributions for a remodel program. When asking for dollars, landlords usually ask for something in return like additional lease length so they can amortize their contribution over time.” It’s a win-win for both the landlord and the tenant. Both parties are contributing to improving the space and extending the term to monetize the investment.

Real-life example: We helped a national movie theater chain negotiate store remodeling contributions from its landlords totaling $40 million for 40 locations. The successful remodel program for this chain allowed them to stay a step ahead of the competition in providing the ultimate theater experience for the consumer. The remodel included installing state of the art projection and sound systems, large reclining seats and bars in many of the locations.

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