Malls Are Dead. This is How E-Commerce Brands Are Helping to Shape Brick and Mortar 2.0.

Traditional malls are dying, but physical retail is not dead. With one in four malls in the United States predicted to close by 2022, retailers and real estate developers are shaping Brick-and-Mortar 2.0.

The retail apocalypse may be upon us, but the surprising reality is that many consumers still like to shop in physical stores.

More than 70% of consumers prefer to purchase clothing and apparel, household goods and consumer packaged goods in person, according to Credit Suisse analysis. A whopping 92% prefer to purchase food and groceries in person.

These statistics suggest that physical retail isn’t dead, even if traditional malls may be struggling.

In fact, e-commerce disruptors who were born online are seeking out a physical retail presence to get in front of consumers:

1. Warby Parker, which began life sending eyeglasses to customers’ residences to fry at home, has opened a slew of physical retail locations around the United States so customers can see, touch and try on frames in a traditional retail setting.
2. M. M. Lafleur, the innovative womenswear e-commerce startup, first found success delivering “Bento Boxes” of clothing to women who signed up online. The brand, founded by Sarah Lafleur, has since opened M. M. Lafleur showrooms in Atlanta, Boston, Chicago, Houston, New York City’s Bryant Park, San Francisco and Washington, DC.
3. Bonobos, one of my favorite menswear retailers for the digital age, has aggressively opened Guideshops around the United States to allow shoppers to get to know the brand and find their perfect fit.  Check out Bonobos’ Guideshops in Washington, DC’s Georgetown and Shaw neighborhoods to get a feel for the concept.
4. Ministry of Supply, which makes office-appropriate performance fabric clothing for women and men, has stores in Boston, Chicago, Georgetown, New York, San Francisco and Santa Monica.
5. Indochino, the Canadian-based menswear startup who began by selling made-to-measure suiting exclusively online, has opened a series of more than 50 showrooms around the United States and Canada, including one in Washington, DC’s Georgetown neighborhood, and has experimented with a range of temporary pop-up shops.
6. A range of other digital-first retailers including Ledbury and Untuckit have also turned into omnichannel retailers, incorporating a physical retail presence into their business model.

Many of these brands are using these retail locations as showrooms rather than traditional retail establishments.

Customers can get to know the brands and try on clothes, shoes, eyeglasses, etc., and the retailer will ship purchases directly to customers’ residence. Without inventory, these brands can find new use for spaces and do not require the same footprint as traditional retailers. (For a deeper dive on the showroom experience, see this piece unpacking the Bonobos Guide Shop concept.)

Aman Advani, Co-Founder and CEO of Ministry of Supply, told me that their retail locations are “amazing places for us to have 1:1 conversations with our consumers.” He added that Ministry of Supply can gather impactful, real-time feedback in person” and help shoppers curious about the brand “understand the breadth of what each garment has to offer.”

Some innovative real estate developers and managers are helping enable this transformation to Bricks-and-Clicks though new retail concepts:

• Brandbox creates a flexible retail arrangement that brings digital-native e-commerce brands into malls like Tysons Corner Center in Northern Virginia. Brandbox tenants include teeth aligner Candid, affordable luxury mattress brand Nectar, and Gilly Hicks by Hollister intimate apparel. A cluster of new brands opened in the Tysons Corner Brandbox installation just in time for the holidays, including a Creative Collective collaborative popup, Italian homegoods brand Seletti, and skincare specialist Terres da’ Afrique.
• The Triple Five Group is developing luxury shopping and entertainment complexes that mash up high-end shopping with experiences and restaurants.  In 2020, the group expects to open the American Dream in East Rutherford, New Jersey, which will house retailers alongside indoor skiing and an aquarium.

Jill Renslow, Senior Vice President for Business Development at the Mall of America in Bloomington, Minnesota, summed up the effort to transform malls for the digital age when she told the Washington Post that, “the focus is on things you can’t get online. Dining, entertainment, services — and flu shots.”

Where there is change there is opportunity. Leading startup accelerator Y-Combinator is prioritizing investments entrepreneurs who are tacking the challenges of Brick and Mortar 2.0.

Looking out into the future, Y Combinator predicts that retailers will demand “micro-leases” of days or hours rather than months or years and that the widespread use of self-driving cars change human’s “relationship with physical space…in ways that are hard to predict,” with consequences for retail use.

Have you had a great retail experience? Tell me about it in the comments.

Photo credit: Featured photo by Heidi Sandstrom. on Unsplash.