Retail stores are increasingly adopting a hybrid model, whereby they accommodate both in-store shoppers and the fulfillment of e-commerce orders, according to John Morris, retail and industrial & logistics leader, and Melina Cordero, managing director for retail capital markets, with CBRE.
A new report from CBRE examines the trend in retail toward the hybrid store model. Cordero says it represents an attempt to draw on existing retail real estate, while delivering e-commerce orders profitably and efficiently. While the precise configuration of a store depends on the individual location and retailer, the general strategy is indicative of the industry’s future. And
Morris says brick-and-mortar infrastructure is being deployed as “an extended part of the retail experience and supply chain, and is a great opportunity that pure online retail doesn’t have.” The task of handling two types of inventory within the same space isn’t that challenging, he adds, since both involve the processing of small orders, as opposed to the pallet-sized loads that are found in traditional warehouses.
The model is more than a means of streamlining e-commerce. It also requires that the retailer create an attractive environment for the in-store shopper. That might mean amenities such as high-tech fitting rooms and hospitality lounges. “For a lot of brands going forward, the front of the house is going to be about the [shoppers’] experience,” Cordero says.
Technology will play a major role in the transformation of traditional stores. Checkout lines will be completely eliminated, Cordero predicts. At the same time, humans will still be needed on the sales floor, dedicated to customer-facing roles, while a separate workforce will be responsible for handling order fulfillment in the back of the store. The concept is most likely to take hold in markets with high demand and heavy traffic, Morris says.
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