Physical stores can be overbuilt, as many retail chains have found. But done right, they still offer many benefits that pure play e-commerce plays can’t match. That’s the central conclusion of a recent article on GlobeSt.com on the outlook for brick-and-mortar stores in the post-pandemic era.
One way to think of physical stores is as a giant billboard that people see as they go by, the article notes.
“For a store, it’s front-of-mind for somebody walking past it. they’re paying rent for that space, but not advertising for it,” Stephanie Cegielski, vice president of research at the International Council of Shopping Centers told the business news website. “… We found that if a store opened in a market, their online sales in that market increased 37 percent. We found that if a store closes in that market, online sales decrease 33 percent in that market. It’s out of sight, out of mind.”
Similar sentiments were expressed by an executive with a high-profile upscale shopping complex on the northeast edge of fast-growing Columbus, Ohio.
“We have never felt that online shopping is something to fight, we see it as a complement to the brand,” says Spencer Jordan, Senior VP of leasing at the Easton Town Center. “Even before the pandemic, we were working with online-only brands to get into brick and mortar. The ‘Halo effec’t is something we’re talking about more and more.”
Having a physical presence also helps with customer acquisition costs. Not only do consumers go by stores, they go to buy at stores.
“Brick-and-mortar, with its set rent and proven returns, has been helpful in driving not only customers to the store for sales but to the website,” Jordan says. Easton has had e-commerce companies open pop-up locations “and see online growth of 38 percent to 40 percent in our market.”
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