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Brandbox Gives E-Commerce Brands A Brick-And-Mortar Testing Ground Featured

  • Written by  Glenn Taylor
Brandbox Gives E-Commerce Brands A Brick-And-Mortar Testing Ground

Real estate firm Macerich is best known for operating malls and shopping centers throughout the U.S., but now the company is taking a new approach to retailing: bridging “high-growth digitally native brands” with brick-and-mortar. The company launched BrandBox in November 2018, a concept designed to house e-Commerce brands in malls on a rotating basis, giving them the chance to operate storefronts at an affordable cost.

Brandbox launched its first concept at Tysons Corner Center in Tysons, Va., and it includes:

  • Flexible space and lease terms: A BrandBox store ranges from 500 to 2,500 square feet, and leases run six to 12 months;
  • Support on design and buildout, staffing and technology through partnerships with companies including Bobby Redd, FITCH, Vitra, RetailNext and Boomtown;
  • Store designs tailored to each brand;
  • Social and experiential marketing designed to drive foot traffic and brand awareness both online and offline;
  • Access to an analytics dashboard; and
  • Educational content via Brandbox.com.

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Brands at the Tysons, Va. location include Winky Lux, a cosmetics brand; luxury apparel retailer Naadam; Interior Define, a home furnishing company; mattress seller Nectar Sleep; UrbanStems, a flower delivery company; and DKNY, the one established “heritage brand” selected to join the first class of digital natives. Each brand operates its own mini-store inside an 11,000-square-foot space.

The footprint of the BrandBox location at Tysons Corner Center will double by summer 2019, and Macerich plans to expand the Brandbox concept to as many as six other mall locations across the country this year.

“It’s very similar to a coworking environment like WeWork or Industrious where you’re all sharing a common space, but there is a brand community manager just working with all the brands through the process of setting up in-store operations,” said Kevin McKenzie, Chief Digital Officer at Macerich. “Our 500-square-foot increment squares of modular walls and storefronts can move depending on how you want to configure them. You can reconfigure the 11,000-square-foot space to host anywhere from six storefronts to four or even two, depending on how you want to use it. You can configure the space inside for each store that literally emulates an inline store.”

Brandbox Supplies Retail Basics Plus Analytic Tools

Brandbox provides lighting and fixtures that can easily be swapped out of each space. Each store includes plug-and-play technology and utilities including WiFi, security tags and cameras, storage for inventory and a breakroom.

Even more important for the learning process, brands have access to a proprietary retail analytics dashboard that integrates to measure in-store sales and customer engagement, as well as KPIs such as anonymized foot traffic, conversion, customer flows and sales. The brands can even measure any increases in their local e-Commerce traffic resulting from opening a store with BrandBox.

“What’s old is new,” McKenzie said. “I talked to the Co-Founder and CEO of one brand in our early discussions, Naadam, and he was saying: ‘When I think of a store, I think about creating great experiences for my existing customers — but I also think about it as a channel like I do Facebook and Google, where I’m measuring my cost per acquisition and my lifetime value. You’re effectively giving me the tools to measure that.’ All of a sudden, physical channels are being measured similarly to online channels, which is fascinating for us.”

E-Commerce Companies Want Stores, But Most Don’t Have Budgets To Build Them

To develop BrandBox, Macerich leveraged insights from previous relationships with click-to-brick brands like UNTUCKit and Warby Parker; interviewed 50 founders of top e-Commerce brands; and conducted research on 500 more to understand their unique needs when they venture into the physical world.

“It became clear to us that brands, and categories ranging from beauty to shoes to apparel to home goods, are probably going to be born online first before they’re going to open a physical store,” McKenzie said. “As a company we should probably get to know them, understand how they do business, how they think and what they care about. I spent a good six months on literally profiling the market to discover how big it was, and how many of them are relevant to us. We learned pretty quickly that they all do want to open stores. However, when these companies were built and raised money, none of them did it with the idea that they were going to have real estate involved.”

Many of these businesses expected to instead spend their budgets opening storefronts on e-Commerce platforms like Shopify or building on technology infrastructures such as AWS. Brands that drive anywhere from $15 million to $100 million in annual revenue and have “hundreds of thousands, if not one million customers online” are typically ready to open a store within a shopping mall, McKenzie noted.

In his research, McKenzie discovered that while there was plenty of content related to growing an e-Commerce business, there was a lack of knowledgeable advice about opening a physical store.

“We’ve been helping brands build stores for almost 50 years,” McKenzie said. “We should probably start to write and create some original content that puts this in layman’s terms, so that you could read this and become informed without being familiar with real estate jargon.” Brandbox has collected nearly 50 articles that educate and inform brands on how to build out a physical presence.

While Brandbox is currently located in one shopping center, Macerich plans to expand the concept to various locations across the U.S. in 2019, including:

  • Philadelphia;
  • Santa Monica, Calif.;
  • Scottsdale, Ariz.;
  • Chicago;
  • Corte Madera, Calif.; and
  • Portland, Ore.
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