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E-tailers use physical space as marketing channel

December 5, 2017

There’s a whole universe of online tenants out there who want to use retail real estate as a temporary marketing channel, experts said during a panel discussion about specialty leasing at the ICSC New York Deal Making Tuesday.

Alana Branston, Yashar Nejati, Ross Bailey, Richie Siegel at the 2017 ICSC New York Deal Making

A host of retailers who sell their wares on the Instagram and Shopify platforms are eager to experiment with physical spaces, said Alana Branston, whose Bulletin Mini Mall stores are called the “WeWork of retail.”

“They pay a flat monthly fee. We manage the store and share data with them so they can improve their products,” Branston said. Brands come and go quickly at Bulletin stores, she added. “It’s considered marketing so the lease is short and targeted. You wouldn’t buy a Facebook ad for 10 years.” Only about 10 percent of Bulletin’s vendors expect to eventually open their own pop-up shops, she said.

These sellers are recognizing the high cost of search-engine optimization and driving web traffic, said Richie Siegel, fashion entrepreneur and author of the popular Loose Threads blog. “They recognize that retail is still the cheapest to acquire new customers,” he explained.

“We are trying to define a new category of real estate”

These retailers view the store as a marketing channel more than anything, said Yashar Nejati, co-founder and CEO of This Open Space, which matches online retailers with pop-up stores. “We are trying to define a new category of real estate,” he said. “There are a lot of Shopify entrepreneurs. We bring the brands together, and take out leases ourselves.”

Oftentimes, sales growth isn’t even a metric for these tenants, Nejati said. “The metric for success is engagement. They measure it by online sales and customer feedback.”

Tech companies such as Match.com are also increasingly coveting physical spaces to raise consumer awareness of their brands, said Ross Bailey, founder and CEO of Appear Here. “Tech companies are obsessed by the customer journey.” He said Match.com’s recent pop-up store in London helped raise the company’s brand awareness by 50 percent in the market.

By Brannon Boswell

Executive Editor/SCT

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