In the March 16 edition of the WSJ, Ester Fung writes about the “click’s and brick’s” retail trend and its impact  on the disruption in retail that has been plaguing retail–space owners for years.  As e-commerce continues to carve up sales at the traditional brick and mortar sites, online sellers are looking to open physical stores to complement their on-line presence.  This is a new gamble for landlords but it is giving them hope and a new customer base.

A Manhattan Landlord Connects With Online Retail Upstarts

On-line real estate has become very crowded and expensive.  Forester Research has noted that there are more than 800,000 online stores all trying to attract customers through the Google gateway, so a tremendous amount of money is being spent on the highest place search ads which allows for very little differentiation.

Another issue for on-line retailers is the extraordinary high rate of returns that are generated through on-line sales.  They need to find a way to reduce the quantity and costs of returns.  Perhaps the click’s and brick’s trend can help in both cases.

Click’s and brick’s are retailers that are opening essentially what is a showroom.  This approach allows the customer to size and sample products while minimizing real estate and other retailing costs and will hopefully cut down on returns.

Bonobo’s  calls their shops “guideshops” which lets the customer try on clothes while the order is placed on-line and delivered to their home.  Warby Parker is another great example of how this works.  They sell stylish eyeglass frames and started their business as an on-line operation in 2010.  After a successful three years on-line they began opening small stores nationwide and have become the poster child for blending click and bricks.  Meanwhile the distribution centers to support the click’s and brick’s are becoming smaller and are being located much closer to the large consumer markets.

Despite the doomsayers,  retail as we currently know it is not dead, it is just different