BY SARAH TREFETHEN
As the recovering economy brings shoppers back to the marketplace, retailers are beginning to expand into the new world of online shopping and marketing. And, they say, it’s not all bad.
For some traditional brick and mortar retailers and property owners, new competition from online commerce could be an opportunity in disguise, according to panelists speaking Sunday at the “United Nations of Retail” forum at ICSC’s annual retail real estate convention in Las Vegas.
“We were in denial for so long. Now, we’re saying, what are we going to do about it,” said incoming ICSC Chairman Brad M. Hutensky said, introducing the panel, which was moderated by Faith Hope Consolo of Prudential Douglas Eliman’s retail group.
Major retailers participating in the panel, including Starbucks and Gap (through its Athleta brand,) reported plans to expand the number of their storefronts in the coming year.
One consequence of online shopping is that stores are getting smaller. That trend towards smaller footprints means more space is available, Hutensky said – which may not be a bad thing. “If you own a shopping center, any time you get back space is an opportunity.”
Starbucks is one company experimenting with smaller-format stores, according to Brenda Godfrey, vice president of global store development. The gourmet coffee shop chain is experimenting with 500 s/f stores with no seating in high foot traffic areas, she said.
“It will be more of an in-and-out for our customers,” she said. And for the company, it offers “a smaller footprint, smaller rents, smaller cost of build-out.”
Starbucks is investing in renovations in 1,700 of its 7,000 U.S. stores this year and plans a net increase of 1,000 store globally in 2012, Godfrey said.
Gap’s new women’s sportswear brand, Athleta, now has 12 stores and another 12 are planned by the end of the year, said Kitsy Ritter, director of real estate for Gap Stores. By the end of 2013, she said, the company plans to have 50 Athleta stores.
“When the stores open they have a line outside,” she said.
Digital communications can be a way for retailers to boost awareness of their brand while maximizing the value of things that can only happen in a physical store.
Sur le Table, a chain of kitchenware stores that opened its 93rd location two weeks ago, uses the internet and social media to build awareness of its brand and draws customers into the physical stores by offering cooking classes, according to Mark K. Comstock, vice president for real estate. “We’ve found out best customers shop catalog, online and in the store,” he said.