The Future of Brick-and-Mortar Retail in the Digital Age

In recent years, the rise of e-commerce has led many to question the future of traditional brick-and-mortar retail. Despite the challenges posed by online shopping, however, physical retail stores are far from obsolete. In fact, recent trends indicate that brick-and-mortar retail is experiencing a resurgence, with several prominent online retailers expanding into physical store locations. As a commercial real estate broker serving the Greater Boston and Eastern Massachusetts region, I believe that the future of retail lies in a hybrid model that combines the best of both online and offline experiences.

One of the most compelling pieces of evidence for the staying power of brick-and-mortar retail is the fact that many successful online retailers are now investing in physical store locations.

For example, Wayfair, the popular online furniture and home goods retailer, opened its first full-service physical store in Natick, Massachusetts and last month opened a 150,000 square foot “megastore” in a Chicago suburb.

Similarly, Warby Parker, the online eyewear retailer, has opened over 100 physical stores across the United States, and plan to expand further.

These examples are not isolated cases. According to a recent CNBC report, new store closures outpaced openings until the trend changed in 2022. For the first time in five years, more storefronts opened than closed, resulting in 1,575 net new openings. There were 307 net new openings in 2023, and there have already been 521 net new openings in 2024, as of May 10.

A report by the International Council of Shopping Centers (ICSC) found that opening a new physical store leads to an average 37% increase in overall traffic to a retailer’s website, which indicates that brick-and-mortar locations can actually drive online sales rather than cannibalizing them.

Another factor contributing to the resilience of brick-and-mortar retail is the fact that many consumers still prefer to shop in person for certain types of products. A 2019 survey by NPR/Marist found that 56% of Americans prefer to shop in physical stores for clothing and accessories, while 50% prefer in-store shopping for electronics. This preference is particularly strong among younger consumers, with 58% of Generation Z shoppers saying they prefer to shop in physical stores, overall.

What does this mean for the future of retail in the Greater Boston and Eastern Massachusetts region?

I believe that we will continue to see a mix of online and offline retail, with successful retailers offering a seamless experience across both channels. This might include features like in-store pickup for online orders, virtual try-on technology for clothing and accessories and personalized recommendations based on a customer’s online browsing history.

At the same time, I expect that we will see a continued emphasis on experiential retail in brick-and-mortar locations. This means creating unique, engaging in-store experiences that cannot be replicated online, such as live events, product demonstrations and interactive displays. For example, the Wayfair store in Natick features a “Home Bar” where customers can get free design advice and recommendations from experts, as well as a “Room Planner” tool that allows customers to see how different furniture pieces would look in their own homes.

Looking ahead, I believe that the future of retail in our region will be defined by innovation, flexibility and a focus on customer experience. Retailers that are able to successfully integrate online and offline channels, while also creating unique and engaging in-store experiences, will be well-positioned to thrive in the years to come. As a commercial real estate broker, I am excited to work with retailers to find the right physical locations to support their growth and success in this dynamic and evolving industry.

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