Shopping Centers Today International

NOV 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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toilet paper, diapers, formula — those are things my wife would never dream of buying in a store at this point," Baker said. "But there are certain things — maybe jewelry, women's clothing or footwear — that she wouldn't dream of buying online." And while many e-tailers are focused squarely on top-tier real estate for urban flagships, some are also leasing space a bit off the beaten track, which can cre- ate opportunities for landlords in these areas, says Gary. Lower prices are a big part of Warby Parker's business, and so the company sometimes seeks to keep occupancy costs down by leasing less- expensive real estate. "I was actually at the Warby Parker store in New York last week, and it's right there in SoHo, with big rent," Gary said. "But Warby Parker's store here [on Henderson Av- enue] in Dallas is not really in the retail core; they took an older, freestanding building, with minimal signage. It really is nontraditional real estate." Unlike some mainstream retailers, moreover, e-tailers like Warby Parker and BaubleBar tend to be flexible about real estate, which can create opportuni- ties for landlords in the form of pop- up and temporary in-line stores. "A lot more center owners are opening up that opportunity to retailers, " Gary said. Meanwhile, mainstream chains like Nor- dstrom and Anthropologie continue to court store-within-store deals with popu- lar e-tailers. "This allows department stores in particular to differentiate their product mix and monetize this huge footprint of their store," Green said. Successful e-tailers also tend to in- spire copycats. In its "try before you buy" model, Birchbox sends subscribers a monthly box of makeup or beauty-prod- uct samples. Sephora's newly launched subscription service, called Play!, works the same way. Other Birchbox-like e-tailers include BarkBox (dog toys, treats and gifts), ArtSnacks (a monthly art-supply subscription box) and Julep (nail-and-beauty products). Over time, concepts such as these could follow in the footsteps of others by leasing space for pop-ups, temp in-line spaces or full- fledged stores, observers say. Whether online chains will gobble up space in ways that make a dent in vacancies, only time will tell, accord- ing to Gary. But given the frequency with which pundits describe e-com- merce as a threat to shopping centers, the notion of e-tailers actually leasing space is encouraging, he says. "It is refreshing for a lot of people in the retail industry to see that going in re- verse," Gary said, "because the oppor- tunities are endless when you look at how many concepts can build success- ful brands online and then have the opportunity to grow stores." SCT 44 S C T / N o v e m b e r 2 0 1 5 New channels The world's e-tailers are learning the value of brick-and-mortar stores. In recent months, a host of web-based companies around the globe have announced plans to make the leap into the physical realm. U.K. fashion retailer Boden, with annual sales of about $425 million, has been mail- order and online-only (except for one store) since its founding in 1991. In September the firm announced plans to open several new shops in Britain. It is also seeking space for physical stores in the U.S., ac- cording to reports. U.K. furniture e-tailer Loaf is opening its first store in south Lon- don this fall, a 7,500-square-foot location in Battersea. The retailer hopes to open 10 more stores by 2018. In India computer manufacturers Acer and Ricoh are opening stores to show off their wares to consumers. The country's largest online lingerie retailer Zivame has raised $40 million from investors and plans to spend some of it to open 100 "fitting sa- lons" throughout India. Indian beauty prod- ucts e-tailer Nykaa has also raised capital for expansion. The company will spend $9 mil- lion to build a network of mall stores in such cities as Delhi, Mumbai and Bangalore. Also in India furniture e-tailer Pepper- fry opened a 1,800-square-foot store, in Santacruz, Mumbai; Online Indian eyewear brand Lenskart is also opening mall stores to better connect with consumers; and online travel agency MakeMyTrip is also moving into bricks-and-mortar by opening a dozen company-owned stores. And the offline migration does not end there. In China smartphone maker Xiaomi, which has only sold its products online, plans to open a store in Beijing's Modern Plaza shopping center later this year. U S M a t t r e S S i S e x p a n d i n g o f f l i n e .

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