As America’s brick-and-mortar retail sector continues to come to grips with the impact of e-commerce on its long-term future, it is worthwhile to track the progress of the growing number of retailers who have chosen to step away from a web-only platform. These retailers are establishing an omni-channel presence by setting up operations in physical stores, and many are showing signs of success.
Many such retailers are choosing to set up shop along the streets of New York City, with its massive and steadily growing population and its broad demographic mix. Despite the recent, well-publicized increase in the city’s available
Michael O’Neill, Cushman & Wakefield
inventory of retail space, New York City remains the preferred market to launch a brand with aspirations of building a meaningful national profile.
Considering the more-youthful and trendy profile of a large proportion of online shoppers, these “adding-bricks-to-our-clicks” companies are gravitating toward New York City submarkets that deliver this coveted, younger demographic.
Moreover, e-commerce players possess a ton of data profiling their customers — including their buying behavior and their browsing interests and habits — and retailers tap this intelligence when making decisions about where to locate stores as well as how they should be merchandised to best cater to the local consumer.
Let’s look at three of the most-prominent e-commerce retailers who have opted to add a Big Apple street presence to their original, web-only profile, and where they have set up shop:
Bonobos started as an e-commerce-only men’s apparel company in 2007. Five years later, it began establishing brick “Guideshops.” Six of its 39 current Guideshops nationwide are located in the following New York City locations: Lower Manhattan (Brookfield Place); SoHo; two locations in Flatiron; Madison Avenue in Midtown; and Cobble Hill in Brooklyn.
UNTUCKit launched as an online men’s apparel brand in 2010, specializing in casual men’s shirts designed to be worn “untucked.” The retailer now also offers a women’s line, and they continue to expand their offerings en route to becoming one of the country’s fastest-growing lifestyle brands. In 2015, the company opened its first “brick-and-mortar” store on Prince Street in SoHo. UNTUCKit now has 12 stores open across the country and anticipates having more than 20 open nationally by the end of the year. In addition to the SoHo store on Prince, UNTUCKit will add a second NYC store on Madison Avenue — adjacent to Bonobos — this fall, and the company is considering additional Manhattan stores as well.
Warby Parker is a designer eyewear retailer that originated online. Founded in 2010, it now has approximately 55 stores nationwide. The brand’s seven New York City locations include Lower Manhattan (Brookfield Place); the Meatpacking District; two sites in SoHo; the Upper East Side; Midtown; and Boerum Hill in Brooklyn. A Rockefeller Center venue is scheduled to open this winter.
As we analyze the impact of e-commerce brands’ expansion into physical store locations on the New York City retail landscape, it is important to consider the neighborhoods that have been a focal point of their initial expansion. Of the brands referenced above, nine of the currently opened 12 Manhattan stores are positioned “downtown” in locations south of 34th Street. The New York City neighborhoods of focus for these brands — namely, Flatiron, the Meatpacking District, SoHo, and Brooklyn — cater to a younger, fashion-conscious consumer whose profile is likely to be consistent with the companies’ online following.
As other e-commerce brands take the leap into opening and operating physical stores as a way to fortify relationships originally forged online, I anticipate the focus “downtown” will continue. These locations effectively embody a brand’s DNA — and speak directly to the retailers’ core customers, thus serving as a perfect bridge from online to offline interaction with the consumer.
Ultimately, a harmonious relationship between a company’s online and physical store presence is critical to success. Thus, a digital profile that is consistent with a brand’s store locations is imperative to any omni-channel strategy. The growth among brands that have been successful in New York up to this point is illustrative of this fact — and is a trend that is sure to continue.
— By Michael O’Neill, executive director, Americas, retail services, Cushman & Wakefield. This article first appeared in the August/September 2017 issue of Northeast Real Estate Business magazine.