Online orders are more connected to stores than ever, spurring retailers to rethink store layouts, according to a report from Colliers. To support high volumes of online sales, brick-and-mortar stores must accommodate a range of distribution and fulfillment options, prioritizing dedicated space for packaging and shipping, said Colliers director of retail services Anjee Solanki. Stores also must employ sufficient staff to process and handle orders, maintain adequate inventory and streamline processes for customers to pick up and return online purchases, she added. “By 2025, we estimate just under a third of all digital transactions will be fulfilled by a physical [retail] location, whether from curbside or in-store pickup to products shipped directly to consumers’ homes,” she said.

Retailers find that physical shops remain a relevant part of the ecosystem by increasing fulfillment capacity and thereby boosting sales, she said. That’s why, according to Edge by Ascential Retail Insight, 34.8% of store space will be devoted to online order fulfillment by 2023 and almost 40% by 2025.

18 tenant updates

• Amazon knows growing brands need brick-and-mortar stores to reach more customers. The retailer’s first physical department stores will focus on Amazon’s private-label apparel brands. In recent years, Amazon has released 1,800 products, from women’s clothing and bags to children’s clothing to men’s tailored apparel. The products fall under the Amazon-owned labels Society New York, Lark & Ro, Scout + Ro, Franklin & Freeman, Franklin Tailored, James & Erin and North Eleven. Amazon’s new physical stores will differ from existing department stores via technology integration. For example, customers will be able to scan QR codes for items so associates can place them in fitting rooms that have touch screens that allow customers to find and request additional items. The stores also will stock merchandise from external brands that sell on Amazon’s website. Amazon could open department stores in California and Ohio as early as next year.

• Outdoor apparel and gear retailer Backcountry will open a fourth store in the first quarter, an 11,600-square-foot, two-level unit in Collection 14, a mixed-use development in Washington, D.C.’s 14th Street corridor. Backcountry has units in Utah and Colorado, but this is its first East Coast location, which will shorten delivery time of online orders to East Coast customers.

• Warby Parker foresees growth driven by customer economics, an expanding physical store footprint and steady increases in active customers and average order value, CFO Steve Miller said. The company has 30 to 35 stores on deck to open this year, bringing its total to 160 by year’s end. It expects net revenue of $537 million for the year, which would be an increase of 36% over 2020 and 45% over 2019. And the company expects revenue to grow again in 2022, by at least 25%. During the first half of 2021, Warby Parker had 2.1 million active customers, an increase of 20% over midyear 2020 and an increase of 28% over midyear 2019.

• Transformco continues to pare down Kmart and Sears’ store portfolios. After November, only 16 Kmarts and only 19 Sears will remain open. In 2019, when Tranformco bought the chains out of bankruptcy, Kmart had 360 stores and Sears had 219.

• Digitally native apparel brand American Giant will open its fifth physical store — at San Jose, California’s Santana Row — in October. Known for its sweatshirts and hoodies, the company emphasizes that its collection is made in the U.S.

• Furniture retailer Lovesac is bringing the showroom home. Lovesac launched Mobile Concierge, a showroom on wheels, in the Washington, D.C., area on Wednesday and will launch in the Seattle area Sept. 29. Lovesac previously implemented showroom appointments, virtual appointments and interactive Facebook Live demos.

• Meanwhile, outdoor-furniture retailer Outer runs a “neighborhood showroom” program that allows shoppers to visit the homes of nearby customers to experience products firsthand. The direct-to-consumer seller has grown from 50 such “locations” in 13 states in 2019 to more than 1,000 in 49 states today. It just scored $50 million in Series B venture capital funding.

• JuiceLand has three locations coming to Texas: Round Rock, Dallas and Houston. That will bring the plant-based juice, smoothie and wellness company, founded in 2011, to 35 stores across its home state.

• The family entertainment sector keeps adding operators. Urban Air Adventure Park, a division of children’s franchisor Unleashed Brands, has signed 25 franchise agreements in the past four months, 10 of them in August alone. The company has done 44 franchise agreements this year and expects to surpass 50 for the full year. The new locations will add to the brand’s footprint in prominent states like Texas, Florida, Illinois and New York and mark the first Virginia locations: two in Richmond and one in Woodbridge. It has 150 locations open and 85 in development. The average unit is 40,000 to 50,000 square feet. Urban Air is looking at former Toys R Us and Sears stores for expansion.

• Glosslab inked deals to open at four properties owned by Federal: CocoWalk in Miami; Bethesda Row in Maryland; Darien Commons in Noroton Heights, Connecticut; and Washington Street in Hoboken, New Jersey. The hygiene-focused, membership-based nail studio operator has salons in Manhattan’s Tribeca, West Village and Flatiron District and will open them soon in Manhattan’s Upper East Side and NoHo and in Westport, Connecticut.

• Cannabis brand Cookies opened a “consumption lounge” in its Coalinga, California, dispensary. Located in a former prison halfway between San Francisco and Los Angeles, the lounge is a space for people to consume legally and responsibly while also having the option of ordering food, the company said. The alcohol-free lounge features luxury seating for 30 and a high-tech air filtration system. City ordinance allows any products sold in the dispensary — including flower, concentrates and edibles — to be consumed in the lounge, which requires an online reservation.

• It’s still fashionable to be seen at the mall. G-III Apparel Group opened its first Karl Lagerfeld Paris men’s store, at Long Island’s Roosevelt Field in Garden City, New York. The 1,300-square-foot store sells apparel, outerwear, small leather goods, luggage, cold weather accessories and footwear. Meanwhile, Donna Karan opened a 1,100-square-foot mall store that stocks the luxury brand’s full apparel range. And urban apparel brand Psycho Bunny and premium contemporary clothing brand Scotch & Soda are opening their first stores in the Carolinas this fall, at SouthPark mall in Charlotte.

• Italian luxury leather goods and stationery brand Pineider opened its first U.S. store, in New York City’s Rockefeller Center. The 1,200-square-foot unit will be the brand’s fourth physical store, joining Florence, Milan and Rome. The company, which does $1 million in annual sales in the U.S., sells online but also in upscale multibrand retailers like Bergdorf Goodman and Moda Operandi.

• Women’s apparel brand Altar’d State is growing Arula, the new name for the former A’Beautiful Soul brand. It serves women sizes 10 to 24 and operates 17 boutiques in 14 states. The first of many new standalone Arula stores will open in November in Wilmington, North Carolina’s Mayfaire.