LAS VEGAS—Brick-and-mortar fashion is the largest at-risk category that’s been impacted by e-commerce and that will continue for the short term. Those thoughts are according to Emil Gullia, senior director of Franklin Street’s Atlanta office.
GlobeSt.com was in attendance Monday afternoon at the firm’s ICSC RECon 2016 reception. Gullia tells us that “Fashion retailers are being challenged to find more creative ways to remain relevant beyond that first sale whereby the consumer became comfortable enough with the fashion or value proposition that they need to go back to the store.”
In addition, he says, the wider acceptance of more casual and performance wear (not just yoga clothes) is allowing consumers to spend more time online. The output is more e-commerce sales, but far more returns too.”
He continues that “the return rate on e-commerce soft line sales far, far exceeds those of in-store purchases.” This, he adds, creates more handling, technological resources, and logistical efficiencies “to get that product back to a sale worthy condition, while in season, long after it has seen its second stop at a distribution center. This has compressed margins and expanded the risk in capital deployment for these retailers. The irony to this is next to food; this is the most sought after sector in mixed-use projects.”
At this year’s ICSC RECon event, he tells GlobeSt.com, tech-driven solutions will have a larger presence. “These platforms are trying to engage all types of real estate professionals to help them make smarter decisions, with more information than has ever been available in the past,” he says. “Real estate professionals are far more willing to listen. Compatibility, usability, more intuitive programming and decreased costs allow for this acceptance.”
One of the many examples of how this technology is already being accepted, he says, is shown by “landlords hiring data and technology resources to better to understand the relevance, perceived longevity and financial health of retailers in the early stages of marketing and before signing leases. Developers and retailers alike are relying on these solutions more frequently to perform analysis to determine what they don’t know about a market, but should.”