Hybrid Locations Will Transform Retail: CBRE Report

New brick-and-mortar store format combines in-store technology and consumer experience with ecommerce fulfillment, direct-from-store shipping.

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High-tech fitting rooms. Hospitality lounges. On-site processing of merchandise returns. Online orders shipped from the store. These are just a few of the features and functions that retailers are adopting in order to meld in-store shopping and e-commerce fulfillment in the same space, according to a new report from CBRE.

While these innovations and trends have long been talked about in the retail sector, the pandemic has fueled a new sense of urgency for retailers to design stores of the future that support shopping in-person, online or by mobile device.

Annual growth of online sales has averaged 15.9% since 2010, while brick-and-mortar retail sales averaged 3.1% per year over the same period. COVID-19 has accelerated this growth even more, as shoppers have become more comfortable shopping online.   

“Brick-and-mortar stores will remain vital for retailers for branding purposes and essential customer interaction, but the store’s purpose will shift to supporting the rise of the multichannel consumer – a consumer who uses physical stores, e-commerce, mobile commerce, and social media for shopping and purchasing,” said John Morris, CBRE’s Retail and Industrial & Logistics leader.

“This will be key for cost control, as shipping for online orders can eat away profits if retailer supply chains are not efficient. To improve this, stores will now include a big portion of their overall footprint for inventory control, product sorting, and shipping/receiving,” he added.