US Future Hybrid Store Integrating Retail and Logistics 2020-2021

Retailers are adopting a range of new features in order to meld both in-store shopping and e-commerce fulfillment in the same space, a report from commercial real estate company CBRE says.

According to the study, the effort could support modern shopping experiences such as: high-tech fitting rooms, hospitality lounges, on-site processing of merchandise returns, and online orders shipped from the store.

While industry experts have long predicted that some of these innovations were on the horizon, the pandemic has fueled a new sense of urgency for retailers to design “stores of the future” that support shopping either in-person, online, or by mobile device, CBRE said. The sales statistics tell the story, with annual growth of online sales averaging 15.9% since 2010, while brick-and-mortar retail sales averaged just 3.1% over the same period.

But while new reports during pandemic shutdowns have highlighted abandoned malls and shuttered shops, the physical storefront still has an important role to play in modern commerce, the study said.

“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,” John Morris, CBRE’s retail and industrial & logistics leader, said in a release.

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

Future stores will support that vision by building two parallel areas, including both a retail and an industrial component.

Under that plan, the “front of house” retail format could include: extra space for curbside pickup; digital wayfinding signs for shoppers; designated click-and-collect desks to separate traditional and omnichannel shoppers; and high-tech fitting rooms with smart mirrors that enable shoppers to try on apparel virtually. And when they’re done with all that, some stores could even offer multi-purpose media lounges where tuckered customers can take a break, CBRE said.

In the other section, a hybrid store’s industrial, “back-of-the-house” footprint could include: a warehouse racking system to separate online orders, buy-online-pick-up-in-store orders, and in-store replenishment; delivery access for shipping and receiving of online orders; inventory optimization technology similar to that of a distribution center; and reverse logistics support for online returns to determine if a product should be reshelved or shipped back to the regional fulfillment center. www.cbre.us