May 24, 2018

Retailers that started online are starting to expand into physical spaces.

In a report headlined “From screens to stores,” retail property manager JLL explores retailers’ clicks-to-bricks life cycle.

After building an online audience, many e-tailers experiment with pop-up shops in prime urban locations near other national brands.

That’s where apparel brand ModCloth is at, launching a tour of rotating pop-up shops that will finish in Austin, Texas, where the first physical location is opening.

From there, e-tailers open a handful of locations, usually in major markets. Cosmetics retailer Birchbox put its first physical location in New York City, for instance.

Then, it’s a major-city rollout. The JLL report mentions Trunk Club, owned by Nordstrom, which has grown to a handful of physical “clubhouse” locations after beginning as an online personal shopping service.

The final phase is a national rollout of stores – likely when they would begin to get to a market such as Sioux Falls.

Retailers such as eyewear business Warby Parker, men’s apparel brand Bonobos and athleisure brand Athleta, which opened in Sioux Falls last year, have emerged as leaders.

“E-tailers now recognize the need to move their businesses into physical locations in order to grow sales and further market their brands,” the report said. “As traditional retailers are pushing to make their businesses more accessible online, online retailers are pushing to create physical embodiments of their web brands. More online retailers will continue experimenting with and expanding their physical locations.”

Digital data is helping guide the process, JLL CEO Greg Maloney said.

“They put these stores in strategic locations where they’re seeing the highest sales volume, he said. “We’re hearing (the business) is doubling and tripling once they open these stores.”

That’s part of what helped lululemon decide to try the Sioux Falls market, said Kirsten Schaeffer, director of marketing and business development at The Empire Mall.

“Lululemon knew going in that Sioux Falls bought a lot online, and that’s why they wanted to test our market. And obviously the shoppers came out, and they did so well they want to stay,” she said.

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