From “Bricks and Sticks” to Bricks and Clicks

From “Bricks and Sticks” to Bricks and Clicks: the continuing change in the operating world for

physical retailers and on-line retailers.

We continually hear the discussion about the end of brick and mortar retailers due to e-

commerce, this is not true. The real point is how e –Commerce is changing retailing.

Part of our job as service providers is to help our clients move to where the market is going.

I thought it would be helpful to describe some of the changes that the Coldwell Banker

Commercial organization is observing in the Retail sector:

The move to smaller footprints and less stores is occurring, firms such as Walmart, Target, Best

Buy, Lowe’s are all experimenting with small store formats.

o Part of this is to embrace the “showrooming “ effect – meaning people still want to physically

touch certain products before they buy them ,

o Also, this allows the store to cut back on inventories

o Because of the smaller store and less inventory, look for a lot of emphasis on “Same Day

Delivery” from retailers in order to compete with the e-Commerce businesses that are already

offering it.

o The competitive environment is evolving to the “battle of the supply chains” with retailers are

using stores for showrooming and their larger facilities as inventory supply chain centers.

o The lines between retail and warehouse space will become more and more blurred.

o The result is retailers taking an “Omni-channel “approach to customers and melding their

merchandising mix with both delivery areas

o Given these trends, developers and landlords will need to alter retail construction.

Eric DeVorkin of our team brings up an excellent counterpoint to the conventional wisdom out

there, maybe the Big Box retailers are reducing their footprints because retail shopping is

cyclical in nature and the Big Box /Mega store format has fallen out of favor with consumers just

like downtown department stores did in the 1970’s.

He also points out that some stores traditional thought of as ‘online only’ are now moving into

physical stores. These include: BaubleBar, Warby Parker, Fab.com and even Amazon has been

tossing the idea around. “I believe we will see smaller stores but a wider variety of them, not

unlike the way it was before the advent of the Big Box and Mega Stores “(again cyclical).

New construction in retail has been muted or very low to say the least, Big Box /Value retail has

seen the largest number of completions over the past four years.

Retail in planning stages are starting to reflect the demands of consumers and how retailers do

business, as a result (this has been well documented and projected by the Urban Land Institute

(ULI)) mixed use developments with a combination of retail/office/residential are coming on

line. This is leading to the positioning of properties to where consumers work and live.

As a service provider addressing these trends will put you in a winning position.

By: Fred Schmidt, President & COO, Coldwell Banker Commercial Affiliates

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