Market Overview

The rise of bricks and mortar commerce

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With the news that Amazon (NASDAQ: AMZN) is opening their first store in NYC, I really got to thinking about the huge shift in retail and bricks and mortar commerce. In the dotcom boom, e-commerce was all the craze and everyone wanted to move online, ditching their physical footprints in exchange for cheaper rent, and higher margins online. In the last few years this has been changing and I think the sign of AMZN moving to a bricks and mortar store is shining a spotlight on it. Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) have had stores for a while. Bonobos, Warby Parker, and Birchbox (who all started as online retailers) have since opened physical stores.

Recently I was listening to an a16z podcast with the Ron Johnson and Tristan Walker of Walker and Company. Of course, Ron being the master of retail having knocked it out of the park a few times now discussed physical retail locations and his main thesis was that brands need to be multi-channel to connect deeply with customers. Yes online retail is where things will be for the most part so a physical footprint doesn’t need to be large, but it does add a human, personal element to a faceless online brand.

Despite the fact that JCPenney (NYSE: JCP) kicked Ron out of the executive seat, their recently released plan that outlines their growth strategy and prospects looks a lot like the what Ron tried to lead the company to do.

  • Revitalizing the highest traffic area in the store – center core – as a leading destination for beauty, jewelry and fashion accessories;
  • Improving the productivity of the Home Store with value-driven products and a tailored promotional strategy; and
  • Maximizing the power, reach and integration of the Company’s omni-channel capabilities.

They literally use the word omnichannel where Ron uses the word Multi-channel. This is obviously the exact same plan. Sounds like an interesting strategy on the surface, they detail some of these a little more though, here is an excerpt

The Company is focused on attracting a new and younger customer by investing in popular in-store attractions that can only be found at JCPenney. To that end, the Company announced the expansion of its highly successful partnership with Sephora, as the companies have agreed to open additional Sephora inside JCPenney locations through 2017, entering new and smaller markets as the first major beauty destination in town.

JCPenney is leveraging its position as the only U.S. department store retailer carrying an exclusive assortment of Disney merchandise by opening more than 100 additional Disney-branded Shops inside JCPenney by back-to-school 2015. The Company has also entered into an agreement with Hallmark to test a Hallmark shop concept carrying greeting cards, gifts, ornaments, holiday décor and more in 15 JCPenney stores this fall, including a newly opened Hallmark shop within the Home department at its Frisco, Texas location.

Well if JCP is moving forward with this plan to grow a store within a store concept offering a location to find existing brands, my suggestion from earlier this year that Sears (NASDAQ: SHLD) should extend their real estate leasing to less established brands (offering a cheap retail growth strategy for folks like Warby Parker, Bonobos, and others) starts to make a lot more sense.

Any way you look at it though, bricks and mortar commerce is on the rise and is being fed by the growth of electronic commerce. A prime time for the rise of bricks and mortar commerce consultants, hucksters, and entrepreneurs to make money in new ways.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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