Many people may still feel the impact of e-commerce on physical business, especially the data of the US physical business market. For example, in 2017, there were more than 700 physical stores closed in the US, and a forecast released by UBS showed that In 2022, at least one-quarter of department stores in the United States will close down.
But a new report released by investment management company JLL provides a new perspective on this issue. According to the report, although the emergence of e-commerce has forced many old-fashioned traditional shops to go astray, these e-commerce companies are about to start large-scale opening of physical stores, which will still enrich the US physical business market. In the JLL report, the US physical business in the next five years has been described as vibrant – e-commerce brands will open at least 850 physical stores.
It is worth pointing out that among these e-commerce brands that will open physical stores, fashion e-commerce will occupy a big part. According to the data collected by JLL, 74.3% of the brands that started the e-commerce and decided to open physical stores sold fashion products. Brands Bonobos and Everlane are examples. This is related to the particularity of consumption of fashion products. Although the convenience of e-commerce has been sought after, many customers still have strong demand for trial and trial. This determines the necessity of physical stores for fashion brands.
However, the report pointed out that the practice of using physical stores as display points is not as popular as it might seem. Only 15% of the surveyed brands will treat the physical store as a complete sample showcase. Most brands will still prepare some inventory so that consumers can buy directly at the store instead of risking loss of sales, lengthen the shopping timeline, and let consumers go home and place orders in the online store.
In addition, in the US market, these e-commerce brands have invariably regarded New York as a treasure. According to JLL, nearly 60% of the e-commerce brands surveyed will open their own *physical stores – mostly flash stores – in New York. When asked about the plan to open a long-term store, 41.3% of the brands would still want to put the * store in New York. After New York, Los Angeles, San Francisco, Toronto, and Chicago are also brand-friendly locations.
From the past experience, e-commerce brands generally prefer to choose a city to open a flash shop to try water. If the effect is good, most of them will officially open their physical stores in the city to open a store plan. Just like the net red beauty brand Glossier opened a flash shop in the lower city of New York. Then, because the response was too good, the flash store was directly developed into a long-term store.