A significant amount of catastrophizing occurred in the retail world when online stores first rose to popularity. Predictions were that online retailers would signal the end of traditional retail storefronts, negatively impacting commercial real estate. However, while the recent sale of 100 RioCan properties may paint some truth into this picture, many retailers continue to find value in their brick and mortar locations.
Major E-commerce Retailers Are Going Brick-and-Mortar
A number of online retailers are looking for physical retail spaces to sell their products. For Example, Amazon recently invested in physical retail by purchasing Whole Foods; the idea being to sell specific products in store as well as groceries; expanding the ‘grocery market’ concept into simply, a ‘market’ concept.
Vistaprint, the successful online printing service, is also opening their first retail space. Located in Toronto, Vistaprint is addressing a concern that other online only retailers are beginning to realize too; that consumers want a space to see, touch and feel what they’re buying before making a purchase. Clothing retailers are also carefully reinvesting in storefronts in an effort to enhance their online success.
Non-traditional Lease Agreements
In larger areas, like Toronto, some spaces are literally “popping up” for retailers without the constraints of a signing a retail lease on a yearly basis. Pop-up stores are designed for retailers to operate at physical locations for short periods of time, providing the advantages of a physical location without the upfront investment. If pop up stores are successful, and many are proving to be, they will provide retailers with an advantageous stop gap or testing ground before they look for a more permanent retail location.
Studies are showing that consumers often still prefer the security of a physical space - even if they ultimately decide to buy online. Consumers also tend to consider a business more reputable and/or trustworthy if experienced in a physical retail space.