A company that follows shoppers around via their smartphones has been following a growing number of them right into direct-to-consumer stores.
Placer.ai says foot traffic for athletic brands like Nike, Under Armour, and Adidas was up 20% year over year in the first week of April compared to the same week in 2019.
The location analytics specialist pointed to those stores as examples of direct-to-consumer strategies that appeal to a particularly attractive demographic.
"Placer.ai has also found that younger consumers -- who are heading to major cities like New York after seeing shrunken pandemic rents -- tend to prefer authentic brands, and an in-store store experience is crucial for developing a connection with them," said a recent Commercial Observer article.
Cutting costs by eliminating the middleman while building the brand
According to Ethan Chernofsky, Placer.ai's vice president of marketing, direct-to-consumer locations help build brand experience, secure a loyal shopping base, and offer the ability to cut operating costs by serving as fulfillment centers for online orders, helping those brands compete with the likes of Amazon.
"Brands are struggling because someone like Amazon [will] deliver everything [and] that's part of the set cost," Chernofsky told the Commercial Observer. "If I have a location, I can do something like buy online and pick up in-store, which is much cheaper for a brand than having to deliver it to your home."
Of course, it's not just athletic wear that's getting into the game. Another example is Warby Parker: The vision wear vendor began selling online exclusively and now has a growing brick-and-mortar presence.
The Millionacres bottom line
Owners and operators of retail properties -- including retail REITs (real estate investment trusts) -- are in a long-running war of attrition with the digital realm. Retailers successfully working in both the digital and the physical worlds make ideal candidates for tenancy in shopping malls and centers, where the presence is welcome both to shoppers and investors in commercial real estate.