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Digital-Only Retailers Storm into Brick-and-Mortar

Physical presence offers broader chance to grow faster

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Online-only retail brands that flourished during the pandemic are now increasingly seeking to continue growth by opening brick-and-mortar outlets, GlobeSt.com reports.

Representatives from several major commercial real estate firms told GlobeSt.com at ICSC 2022 in New York that the move by direct-to-consumer digital native brands to physical outlets is now one of the hottest growth sectors in retail.

Among the retailers making such moves are NAADAM, ThirdLove, A Pea in the Pod, Glossier and Vuori.

“Digital native brands have to go to bricks and mortar to grow,” Barrie Scardina, Head of Americas Retail for Cushman & Wakefield told GlobeSt.com. “It’s very expensive to grow online. The cost of customer acquisition is very high, the cost of shipping is high. Having a [physical] store gives you a broader opportunity to grow faster.”

“Almost every digital native fashion brand we work with is demanding bricks and mortar retail,” she said. “We’re spending a lot of time on digital native brands.”

According to JLL’s new report about prime urban retail corridors—City Retail 2023, released this week at ICSC 2022—digital native tenants who have been unable to compete with “extremely well-capitalized” luxury retailers in Soho have redirected brick-and-mortar expansion plans to prime corridors in Philadelphia, Washington DC and San Francisco, among others.

For more on this trend from GlobeSt.com, click here. (Note: registration with the site is needed to view this article.)

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