From Clicks Back to Bricks: The Re-emergence of Brick and Mortars

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Wondering what Serena Williams will wear when she steps onto the tennis court for the 2019 Paris Open Queen on Sunday, May 26th? Her black Nike catsuit caused some controversy at the 2018 Paris Open. But no matter what she wears, Nike will share the spotlight with her on the court, online and at Nike Champs-Elysees store. A Serena Williams–inspired flowing cape-jacket designed by Virgil Abloh, in collaboration with Nike, will be on sale. Abloh and Nike have also created a limited-edition T-shirt and hat, which will be released on in Europe, North America and P75 store in Paris once Serena takes the court.  Talk about timing!

This is a winning marketing trio integrating retail, ecommerce, and entertainment. Nike has always been ahead of the game in providing experiential retail, which is considered the game-changer of the future, since it opened its first flagship store in New York 25 years ago. As the great American humorist Mark Twain once told a reporter, “The reports of my death are greatly exaggerated.” This can be said of “retail is dead” rumor set off by the battle between e-commerce and retail.

The “who’s beating who” wrestling match between ecommerce and retailers got verbal in April when CNBC reported that in February “online US retail sales was higher than general merchandise sales for the first time in history”—or in other words, online shopping had brick-and-mortar sales down on the mat in a stronghold. Greg Maloney, President & CEO, Jones Lang LaSalle (JLL) and a frequent contributor to delivered a smack-down with an article that made CNBC cry “Uncle” and change its’ story within 24 hours.

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“Look, I’ve long taken issue with some of the ways the topic has been covered and I think it’s clear which side of the fence I am on when it comes to the future viability of physical retail, but I’m also not the Pollyanna you might think,” Maloney wrote pointing out specific errors in the CNBC story. “There have certainly been challenges for the sector and online retail has made its impact felt to be sure, but it’s just not the death-blow that some people want to make it out to be.”

Granted this week Nordstrom, JC Penney, Macy’s, and Kohls reported disappointing first quarter profits for 2019, the retailers are revving up for the future with a marketing strategy whose time has come. Maloney says a “concept of convergence” is occurring, where there is “a realization from retailers that to properly compete they need to have a presence everywhere, online and off.” And the same goes for e-commerce. Nike’s Serena Williams–centered strategy for the 2019 Paris Open is an excellent example of covering all the bases.

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Fifth Avenue in New York City is a “must shop” spot for tourist visiting the Big Apple. Since the coming of the age of e-commerce in 1991, Generation Z shoppers, don’t need a luxury allowance to spend money on the “Millionaire’s Mile” anymore.  Now they can step into Nike’s Fifth Avenue flagship store and try on new shoes and customize them to fit. 

Big brands had traditionally been dependent on independent retail stores and chains, like Macy’s, to be the frontline for customer interaction. Believing that e-commerce was the key to expanding their customer base, they invested in online virtual marketing where the computer mouse was king, and every heart’s desire was just a click away. But not anymore—the game has changed. 

Both retailers and e-commerce brands realize that a consumer revolution is afoot.  E-commerce is rushing to recapture their customer base, that has been returning merchandise at a high rate, and not transitioning into return buyers. As a result, e-commerce businesses are building more stores, which offer more assistance, services, and an ambience created to inspire spending. Maloney says that a report by JLL, revealed the fact that the top 100 “digital-native brands” (previously exclusive online stores) have announced plans to open a combined 850 stores over the next five years.

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“’The clicks-to-bricks’ retailers’ expansion plans, demonstrate the value these brands place on having a physical presence with which to engage shoppers,” the JLL report states. Apparel and accessory brands account for almost three-quarters of ‘clicks-to-bricks’ retailers. New York remains the top city for both pop-ups and first permanent locations, according to the report, but other “marquee markets” like Los Angeles, San Francisco, and Chicago, are also popular.

One of the largest ‘clicks to bricks’ expansion across the country will be from Adore Me, the women’s intimates’ company—that has stolen much of Victoria’s Secret’s thunder, plans to open up to 300 additional stores in the next 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 JLL report states. “The ‘clicks-to-bricks’ retailers’ expansion plans demonstrate the value these brands place on having a physical presence with which to engage shoppers.”

When Nike opened a new flagship store on Fifth Avenue in November 2018, Heidi O’Neill, president of Nike Direct, was enthusiastic about loving her role in ushering a new age of “retailtainment.”  “I get to think about the evolution of retail every day, as we craft our vision of a modern, digitally transformed store. It was just three or four years ago that the industry declared brick-and-mortar retail dead. If you believed the whispers then, we wouldn’t have any physical stores—just a grim landscape of empty storefronts as far as the eye can see. But a funny thing happened on the way to the death of retail. It turns out, when you actually talk to consumers, they still want to shop by touching and trying on. They still want to connect, to step into a space and feel something.”

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The term “retailtainment” was coined in 1999 by George Ritzer, an American sociologist, defined as “the use of sound, ambience, emotion and activity to get customers interested in the merchandise and in the mood to buy.”  New York has always been a popular location for digital brand pop-up shops and already the city’s retail landscape is changing as exclusively digital stores are leaving the virtual realm and manifesting their presence in the physical world. Soho continues to be the best testing ground for brands to try out their foray into retail. Both ecommerce businesses and retailers have caught onto the idea of “retailtainment” to “catch and convert” new customers and keep loyal customers coming back.

Dr. Elinor Greenberg loves shopping—period—whether online or in a brick or mortar store. She came of age in the 60s, when life was rooted in the experiences of the physical senses. For the Baby Boomer generation, shopping was a sensual experience. Shoppers could touch and try on garments, getting an immediate sense of the fit and feel and then the instant gratification of “cash and carry” leaving with purchase in hand.

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Elinor, a psychologist and seasoned catalog shopper, is now an avid online shopper. Like any busy 21st century professional, the convenience of clicking a mouse, with delivery of your heart’s desires within 24 hours or two days, is ever tempting. But these days many online shoppers, whether Gen X, Millennials, Gen Y or Gen Z are clicking less and walking more, due to disappointment in online garments. Dissatisfaction with the feel of the fabrics, fit of the garments, and in some cases inferior construction, is causing consumers to hit the bricks and shop in stores.

“Instant gratification is one of the major reason’s consumers prefer in-store shopping. Being able to try on and test the merchandise is great, but shoppers also like leaving the store … bags in tow,” says Mahoney. “This is really just the beginning as online has the ability to be one of the greatest incubators for physical store retailers to date.”

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Both online and brick-and-mortar stores are seeking to expand their universe of marketing, but the question is should there be one strategy or channel “to rule them all” or a blending of different channels.  In the end it’s all about money and resources, so companies will choose either multi-channel marketing or an omni-channel strategy.

Retailers are trying out these new ideas, in hopes of boosting their profits. Nordstrom is building a new women’s flagship store in the heart of Manhattan, which will open in October 2019. Macy’s is developing a relationship with Story, an in-store concept that changes every month.  “We are truly seeing a blending of the channels,” says Maloney. “It is clear that at this point it should be a significantly more evolved conversation. I for one yearn for the day that we can just talk about retailing.”

—Francesca C. Simon

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