Direct-to-consumer brands drive mall boom



The pandemic is back in the headlines, casting a shadow over a struggling retail industry.

But consumer spending remains robust. This is the good news. Even better news: This year there has been, and is expected to continue, heavy investment by brick and mortar retailers, especially online merchants.

The mall may have died (or turned into the Amazon

distribution center), but the strip center is alive and well.

There are many reasons. Among them: the rents of open-air centers have fallen; online customer acquisition costs have become so high that physical stores are a better use of capital and a more effective branding tool; and the lingering pandemic has made buyers wary of large indoor sites.

The most common reason given by digital native retailers is that while shopping online is convenient, it is not personal. So these retailers are hitting the bricks, coming to a neighborhood near you.

Amazon alone is expected to open more than 3,000 physical stores over the next two years, according to Adam W. Ifshin, an industry insider and CEO of DLC Management Corp. Amazon Fresh

grocery stores are already popping up in spaces abandoned by traditional grocery chains or in places once occupied by vanished brands like Toys “R” Us.

The list of retailers that have announced expansions this year is long, and the number of planned store openings is on track to far exceed closures.

The majority of all these new stores are opening in strips, exteriors and so-called “power centers” – anchored by big box retailers. In fact, it looks like a renaissance is brewing in what was once a mundane category.

Companies like Macy’s

and Lululemon, who are moving to non-commercial locations, are joined by direct-to-consumer merchants and digital-native luxury brands like Warby Parker, the eyewear retailer that will send you five pairs of frames to try on before you go. ‘to buy. Warby Parker’s online sales carried it through the pandemic lockdown, but the company is doubling down on its store strategy, planning to end the year with 170 stores, up from 135.

Shopping malls and department stores are not coming back, but malls have become the new game in commercial real estate.

Public operators have seen their prices soar. Site center sharing

, a $ 3 billion owner, has quadrupled since November 2020. CEO David Lukes told Reuters in July that “The demand for space right now is higher than I’ve seen in 15 years.”

Meanwhile, established national brands are experimenting with smaller sub-brand concepts. Lowe’s

launches economical factory outlet.

Dick’s Sporting Goods

created a leisure brand called Public Lands. Bloomingdale’s is launching a new chain of small stores called “Bloomie’s”.

One of the main benefits of meeting clients where they live rather than online is the ability to develop in-depth data. When customers visit stores, retailers have the opportunity to gather real reviews, information about specific markets, information about specific products and lines, and about specific demographic groups within geographic markets.

The line between digital and physical is blurring more and more, but one thing remains, the customer must remain at the center of the conversation. Listening to them daily through as many channels as possible and giving them what they want ends in everyone’s happiness.


Leave A Reply

Your email address will not be published.