Physical stores are no longer a place where customers go just to buy products and services. Nowadays, physical stores are platforms which help to create a relationship with a brand and their customers. This bond is more difficult to obtain for a purely online retailer.
Retailers and landlords are trying to adapt to this new reality and are investing to create more experiential and interesting retail spaces.
And while Bisnow’s article focuses on how retailers measure the success of this investment, I wonder how landlords do? Retailers will see the return on their investment via sales (either physical store sales or online). However, in an environment where a lot of retailers are demanding turnover only leases, which do not include online sales, it is difficult for landlords to obtain a full return on their investment.
We agree that attractive physical stores play an enormous role in online sales. Following research from CACI, 90% of customer spend is inspired by a visit to a store, why do current leases not reflect this dynamic?
“Smart retailers are looking at it holistically,” she said. “We are a wholesale business, an online business and a retail business, so how do you make sure all three parts are working well together?”