How e-commerce brands get physical
Digital-native brands are expanding their presence into brick-and-mortar stores across the county, with plans of 850 stores in the pipeline over the next five years.
The mattress retailer Casper will open 200 stores within three years. Adore Me, the women’s intimates company, announced up to 300 additional stores in five years. Allbirds, the wool sneaker company, opened a 4,800-square-foot New York flagship in SoHo, with plans for more stores in four cities in the next year. The clicks-to-bricks retailers’ expansion plans demonstrate the value these brands place on having a physical presence with which to engage shoppers.
In the 2016 report From Screens to Stores, JLL defined the four phases of clicks-to-bricks expansion, from testing a single pop-up store to rolling out a full-scale national expansion. In this new report, we revisit the topic to find that more e-commerce players than ever are leasing physical space.
JLL compiled details of the histories and expansion plans of more than 100 of the top digital retailers to evaluate their strategies. We found that New York remains the top city for both pop-ups and first permanent locations; however, other marquee markets like Los Angeles and San Francisco are also popular choices.
Top cities for first pop-up locations:
- New York City (59.5%)
- Los Angeles (16.2%)
- Toronto (5.4%)
Top cities for first permanent location:
- New York City (41.3%)
- Los Angeles (12.0%) and San Francisco (12.0%)
- Chicago (5.3%)
Nearly 62 percent of permanent clicks-to-bricks stores have opened in the same city where they opened their first pop-up shop. Popular cities to debut a pop-up and then subsequently locate a permanent store are New York and Los Angeles. Other cities include Detroit, Chicago, Washington, DC and San Francisco.
Most clicks-to-bricks retailers sell apparel and accessories
A total of 74.3 percent of clicks-to-bricks retailers are apparel and accessory brands like Bonobos, UNTUCKit and BaubleBar.
Half of all clicks-to-bricks retailers have high price points, like MM.LaFleur and Peloton, whereas 32.0 percent are midpriced retailers like ModCloth and Chubbies.
Showrooms are still a niche
They came of age in the digital era, so it makes sense for clicks-to-bricks retailers to operate on a showroom model—that is, to offer only samples of products for customers to try out and then ship actual purchases to shoppers’ homes from a warehouse. Bonobos and Indochino, for example, both operate as menswear showrooms. M.Gemi, the shoe retailer, and Universal Standard, the plus-sized apparel company, operate similarly.
But despite the amount of attention that showrooms have garnered, only 15.1 percent of clicks-to-bricks physical stores don’t carry any inventory. Of those that operate as showrooms, 69.2 percent are apparel and accessory retailers.
Just 30.8 percent of showrooms are furniture, home furnishings and housewares companies like Casper. The company that ships your mattress in a small blue-striped box opened its first brick-and-mortar location in SoHo in 2018 and already has 16 experience stores across the country in both urban street-front and inline mall locations for customers to test out its products.