Digital-native brands are adding physical retail to the business model, with plans to open 850 stores over the next five years, according to commercial retail real estate firm JLL Research. Last year saw the greatest number of these “clicks-to-bricks” locations including those from Everlane, Allbirds, Away and MM.LaFleur.
Compiling the expansion plans of over 100 digital retailers, JLL identifies New York City as the top location for both pop-up activations and permanent brick-and-mortar stores. Pop-ups are especially common in SoHo, where 48 percent of them were observed. Wool sneaker company Allbirds recently opened a 4,800-square-foot New York flagship in the neighborhood, with plans for more stores in four cities in the next year.
Los Angeles and Toronto were the second and third most popular pop-up locations. Other popular choices included Detroit, Chicago, Washington D.C. And San Francisco.
These pop-ups may be used as a sort of test case, as many direct-to-consumer brands erect permanent stores in the same city as their first pop-up. The most popular locations for permanent stores were New York, Los Angeles and Chicago, JLL found.
Nearly 75 percent of digital-first retailer locations sell apparel and accessories, followed by furniture and home furnishings. Half of these retailers have high price points, and 32 percent are considered mid-priced.
While ecommerce offers convenience to digital natives, physical locations offer in-person help and aid in visualization.
Casper alone will open 200 stores within the next three years. During Advertising Week New York, Casper CMO Jeff Brooks said that the move to brick-and-mortar was always part of the plan. Retail is experiencing a “rebirth,” he said, through better customer service and the marriage of ecommerce and physical locations.
Showrooms are quite popular, especially among apparel and accessory retailers. A small number of them—15.1 percent—don’t actually carry any inventory and serve as more of an art gallery or experience for curious consumers. A majority do carry goods for sale, however, comprised mostly of apparel, accessories, furniture and home furnishings.