With today’s consumer, the key buzzword seems to be “local,” whether it is “buy local,” “support your local vendors” or “help support local small businesses.” Keep an eye out for new national retail chain themes and concepts popping up that feature both local regional brands, as well as lesser-known, yet still buzzworthy, digitally native/direct-to-consumer (DTC) brands. This village marketplace experience for the shopper is more thrilling than what can be found in more generic department stores carrying the typical wares. Millennials and Gen Xers, especially, are excited to see a physical store manifestation of the brands they had only been familiar with on social media. Many of these new types of stores help underserved brands, whether locally-based or digitally native, with a new venue format for brick-and-mortar sales. These stores are swooping in to fill vacant mall, mixed-use and lifestyle center spaces. Look for Brik + Clik, Painted Tree Marketplace, b8ta and its sister brand, Forum by b8ta, Neighborhood Goods and Market by Macy’s to expand. Also, watch for retailOS to invest in malls in order to promote these digitally native brands and their fulfillment center needs.
Retail leasing property owners are also happy to promote unique, local-themed retail tenants that cater to their core community, in hopes of offsetting the loss of tourist customers due to COVID-19 concerns. This “local” trend also coincides with a growing anti-big box monopolization sentiment taking hold, especially with so many mom-and-pop businesses suffering from mandated closures. According to a 2020 Morning Consult survey report on Generation Z’s spending habits, 27% admitted they plan to purchase more items from local businesses than they did before the pandemic.
Watch for Brik + Clik to open 10 to 15 new units per year over the next two years. The brand will work with Unibail-Rodamco-Westfield to take advantage of newly vacant retail spaces, many Brik + Clik locations plan to open in their malls this year and beyond, including a unit in the URW/Westfield Century City mall in Century City, Calif. Two additional units will also open in New York City: one on Fifth Avenue and one in Soho. Brik + Clik seeks spaces in both top-tier cities and emerging markets, including Phoenix, Dallas, Austin and Raleigh, N.C. The Brik + Clik concept looks for space between 2,000 and 4,000 s.f. in premium Class A malls andupscale retail district storefronts. Preferred co-tenants include luxury fitness-related brands, such as Pelotonand Fabletics, as well as technology brands, such as Apple Stores. Brik + Clik has approximately 50 differentbrands in its collection, 90% of which are digitally native, and about 20 brands are rotated through each site.The retailer focuses on showcasing localized companies that are specific to each location, such as its WestfieldValley Fair unit in San Jose, Calif., that features companies that are West Coast based.
To test out new markets beyond 2022, Brik + Clik will be also be opening up to 50 shop-in-shops over the next two years, taking up about 300 to 700 s.f. of space in a still-unnamed national clothing apparel chain — the chain will be revealed after the deal is formally signed by April 2021. Markets to be tested in this arrangement include Rhode Island, Georgia, Maryland, Chicago and parts of Arizona. The Brik + Clik assortment of brands veers toward mission-driven, sustainable, all-natural, cruelty-free, vegan items. The main customer base is female millennials and Gen Zers who demand these types of products.
Painted Tree Marketplace is looking to expand nationally, opening approximately eight to 10 new stores per year over the next three years. Look for immediate expansion into Denver, Phoenix, Cary and Charlotte, N.C., Orlando and Tampa, Fla. The brand will continue expanding nationally throughout the Midwest, the Southeast, the Southwest and the West Coast. Painted Tree Marketplace is searching for 35,000-s.f. second generation retail spaces in power centers within suburban neighborhoods close to major metropolitan areas. The minimum population should be 55,000 people within a three-mile radius of the site, and the average household income should be $85K/year. Preferred co-tenants include REI, Marshalls and HomeGoods. The brand has had success taking over spaces formerly occupied by Toys ‘R’ Us, Babies ‘R’ Us and Stein Mart.
The upscale boutique store’s concept aims to be a brick-and-mortar version of an Etsy app visit, with merchandise consisting of apparel, home décor and gifts, including candles, bath and body products and jewelry. Approximately 75% to 80% of the products are culled from local vendors, with 20% to 25% consisting of national brands.
b8ta expects to open between three and eight new stores per year for each of its store brands (b8ta and Forum by b8ta). The retailer seeks approximately 2,000 s.f. of space in major metropolitan markets within high-foot traffic street-front retail corridors or luxury mall space with upscale co-tenants such as Saks Fifth Avenue, Tiffany & Co., Indochino and Apple. Look for new growth in the South, Southwest and Southeast, especially where the brand recently had holiday pop-up locations, including Nashville, Tenn., Austin and Santa Monica, Calif. The markets of Scottsdale, Ariz., Atlanta and Miami are also hot spots that may see new b8ta or Forum by b8ta units. In 2019, B8ta raised $50M of Series C funding with backing from Macy’s, Peak State Ventures, Evolution Ventures and Khosla Ventures.
b8ta, which made a name for itself five years ago when it first began opening brick-and-mortar stores that featured electronic-based products that had previously only been sold via digitally native means, is now expanding its customer base as it further branches out into the lifestyle and apparel industry with its purchase in October of Re:store, a San Francisco retailer whose three-level lone store features up to 70 local-based and digitally native apparel, home décor and beauty brands. The store will be rebranded to Forum by b8ta, joining two other versions of the same store name that first premiered in late 2019, and that sell both lifestyle/apparel and tech items. The b8ta brands attract customers not only for their unique mix of rotating curated items, but also because their electronic items are all displayed for demo purposes.
The Neighborhood Goods retail concept currently has three locations in two states (New York and Texas), and has plans for future retail locations, potentially three per year over the next two years, with the brand hinting at potential units on the West Coast and perhaps another store in New York. The retailer seeks 10,000 s.f. of space, with accommodations for a kitchen and a bar, in both major metropolitan and suburban areas, including secondary and tertiary markets, within mixed-use or street-front retail locations. Space can be in established high-profile locations or up-and-coming markets. Site should be near restaurants, gyms, such as Equinox, health and fitness-related brands, including Lululemon and sustainability-focused tenants, such as Allbirds.
Neighborhood Goods has an ever-changing mix of about 100 brands at a time that are featured in its stores, ranging from digitally native products, to locally-curated merchandise, to well-known national brands, such as the Tonal smart home gym system, Illesteva sunglasses or TASCHEN coffee table books. The stores also feature their own restaurants in the space, with the potential of featuring guest chefs and even ghost kitchen capabilities. Each of its stores specifically cater to its localized market with its offerings, and since the pandemic took effect, Neighborhood Goods has also provided free space in its stores to local, upstart brands that are struggling.
Macy’s introduced its prototype of this local marketplace-style format with its Market by Macy’s store, which premiered in February 2020 with a 20,000-s.f. unit in the Southlake Town Center mixed-use open-air lifestyle center in Southlake, Texas. At least three more versions of this prototype are set to open over the next two years, with a unit in Fort Worth opening in early 2021, followed by units in Atlanta and the Washington, D.C., area. The Fort Worth unit hopes to open by March in the WestBend mixed-use lifestyle center in a former Tom Thumb grocery store space, sharing the 53,000-s.f. building with Texas-based Ascension Coffee, which already opened its 2,420-s.f. unit in November. If proven successful, new Market by Macy’s locations will show up in lifestyle centers in less populated suburban communities that do not already have a Macy’s store, ideally with female-centric co-tenants such as Macy’s brand bluemercury, CorePower Yoga and Drybar.
The Southlake Market by Macy’s features a unique curated mix of about 150 brands, featuring health items, beauty products, gifts and accessories. Its brands include lesser-known DTC labels, such the sock brand, Bombas, in addition to regionally-local Texas brands, such as Criquet Shirts. The store also features a 1,000-s.f. beauty counter, called Getchell’s Apothecary, that sells lesser known cosmetics brands, such as Vintner’s Daughter. Market by Macy’s also features a café that serves local food vendor items for breakfast and lunch, in addition to alcohol. As COVID-19 restrictions lessen, Market by Macy’s hopes to utilize its retail space in the future for such community-gathering activities as fitness classes, cooking lessons and guest author speakers/book signings.
An executive with the real estate investment management firm Case Equity Partners, has conceived of a new company/platform concept, called retailOS, and his team expects to either purchase or co-invest in lifestyle centers with at least one vacant anchor, in order to re-transform the space into a hybrid building that is part last-minute fulfillment center and part retail shopping center. The empty retail space would then be utilized for digitally native and local brands, potentially under the storefront name, Anchor Shops. Patents are still pending for what retailOS hopes will eventually become a national network of what it has coined as “shopping fulfillment centers.”
Over the next three years, retailOS hopes to invest in and transform between five and 10 lifestyle centers, at approximately 300,000 s.f. each, targeting California, Dallas, Austin, Chicago, New York, New Jersey, Miami, Atlanta, the Washington, D.C., region and Portland, Ore. Preferred co-tenants in these centers include Lululemon and Apple Stores. Populations should be 250,000 within five miles of the center, and household income should be $85K and up. The retailOS concept expects to have its growth projections accelerated as a result of both civil unrest and COVID-19 closures that have adversely affected struggling shopping center owners. Brands sought after for its Anchor Shops concept include those with a strong online following, as well as up and coming vendors in the health and wellness, athleisure, clean beauty and technology industries.
