Future of retail: Hybrid locations supporting both in-store and e-commerce shopping

Real Estate | 28 Dec, 2020 |

High-tech fitting rooms. Hospitality lounges. On-site processing of merchandise returns. Online orders shipped from the store. These are just a few of the features and functions that retailers are adopting in order to meld in-store shopping and e-commerce fulfillment in the same space, according to a new report from CBRE.

While these innovations and trends have long been talked about in the retail sector, the pandemic has fueled a new sense of urgency for retailers to design stores of the future that support shopping in-person, online or by mobile device.

Annual growth of online sales has averaged 15.9 percent since 2010, while brick-and-mortar retail sales averaged 3.1 percent per year over the same period. COVID-19 has accelerated this growth even more, as shoppers have become more comfortable shopping online.

“While brick-and-mortar stores have certainly suffered recently, exacerbated by the onset of a global pandemic, a physical store will still be vital for many retailers,” said Todd Folger, a Phoenix-based CBRE retail professional. “Consumers still crave interaction and a physical location provides that opportunity for retailer and consumer to connect. The biggest issues retailers without a historic online presence will face is the last-mile distribution. This has proven to be a very expensive endeavor that can quickly erode profits, if a retailer can’t adapt and embrace a true omnichannel presence.”

Retail component

With appealing to multichannel consumers as the goal, the new “front of house” retail format will include:

• More space set aside for curbside pickup.

• Digital wayfinding signs for shoppers, and in-store features for the retailer’s mobile app.

• Designated click-and-collect desks to separate traditional and omnichannel shoppers.

• High-tech fitting rooms with smart mirrors, allowing shoppers to try on apparel and accessories virtually.

• A multi-purpose media lounge to allow customers to take a break from shopping.

Industrial component 

The new hybrid store will also handle multiple forms of fulfillment and inventory control, as well as returns. Referred to as “back-of-the-house,” the industrial footprint will include:

• A warehouse racking system that will separate online orders, buy-online-pick-up-in-store orders, and in-store replenishment.

• Delivery access for shipping and receiving of online orders.

• Inventory optimization technology similar to that of a distribution center to ensure continuous replenishment.

• Reverse logistics support for online returns to determine if a product should be reshelved or shipped back to the regional fulfillment center. 

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