Digging In to Cushman & Wakefield’s New Program to Serve Digitally Native Brands

Why are so many dedicated online retailers rethinking their digital-only strategies and embracing omnichannel?

They recognize it is hard to build a brand without the physical experience the store provides. Nothing can replace having that touch point for your products. Plus, online costs are getting much more expensive — for example, the cost of social media ads has skyrocketed in recent years. Also, a lot more of the larger, established retailers are competing with them digitally.

Why is physical engagement becoming so important again in this digital world?

Consumers are really craving experiences after going through the pandemic. Our retail economists project that 80% of retail spending is still in the store, and the latest data shows that could even be pushing 85%. In the customer journey, nothing replaces a store or a physical interaction with the product.

What size businesses will DNB Next serve?

We work mainly with small to midsize footprints but with some larger brands, too, who may already have a footprint but might be looking to understand their markets better. Most of these brands, however, are typically fairly small. Many are operated by their founders, and they are nimble and savvy from a cultural perspective and driven by technology.

Cushman & Wakefield has placed 30 dedicated retail experts on the DNB Next team. Wasn’t this a service the company already offered?

It was definitely something we were providing that we wanted to grow. We already have established relationships in the industry and an exceptional level of talent that we are leveraging to tailor programs for clients, sort of blending both the art and the science of the business through best practices, creativity, broker connections and analytics, all in a cohesive way. Our team is led by a former retailer, [executive managing director and Americas retail leader] Barrie Scardina. Frankly, it’s nice to have someone at the helm who understands the many retail nuances and complexities and who can speak to the needs of DNBs looking for a physical space.

How will DNB Next bounce off other Cushman & Wakefield services?

We are able to leverage our brokers and other experts across the chain to assist in such things as project and development services, inventory management, construction oversight, analytics and lease administration. What’s exceptionally nice is the connectivity the program provides for our clients through our brokers, who have established long-term relationships with retail real estate owners and can determine if the metrics make sense for a particular store space. It takes time upfront to understand these brands and devise a strategy and what constitutes a successful store space before we go out and look for one. We have in-house experts experienced in the customer engagement categories. Plus, we have developed unique partnerships with architects and other professionals who are experienced in helping create this. As for the supply chain, Cushman & Wakefield has a world-class industrial logistics service that can help clients determine such things as freight costs, supply optimization and anything else involved in that side of the business. [And] we don’t just leave them hanging once they’ve opened. We have very passionate partners who can follow up and continue to assist with their success, or if they aren’t succeeding, we can help them understand why and teach them how they can succeed.

DNB Next promises data and insights that will help clients find physical locations, create optimal store footprints and determine market presence. How so?

The amount of data and knowledge we have at our fingertips today is almost unbelievable, as is our ability to sort it out and understand it. We have practically limitless data points that can identify the client’s core consumer and target demographic, plus we have an entrenched research team who knows the individual market intimately and can blend these factors together into a methodology that really sets us apart. Our data analytics can help them understand the secondary customer who sits on the fringe, the aspirational customer and other potential shoppers.

Will most of these new physical locations follow a direct-to-consumer model or be showrooms with some top sellers available?

It all depends on the brand, and we sure are seeing a great diversity of these brands. The showroom model in many cases is most effective in giving the customer a point to understand the brand better and have a more complete brand experience.

What types of spaces and formats do you envision most of your DNB clients landing in?

It’s really across the board in community centers, open-air centers, malls and high streets. High streets tend to see a clustering of these concepts, but DNBs can go into a diversity of places. A lot depends on the tenant mix of the center. Pop-ups are a great way to test new markets. It might take a little more time now to test markets. Pop-ups have had a more transient nature because of COVID.

Are prime shopping center spaces available for DNBs?

Oh yes. [COVID-related closures of other stores] have given these online brands a chance to go into new markets and allowed them to look at areas with strong traffic. But they’re not just looking at gateway cities; there are tremendous opportunities in secondary and tertiary markets.

What do you look for down the road for this growing trend?

It’s a really exciting time. There are a lot of new concepts out there that we’re going to see move forward, with a focus on imaginative products and services for the community. It’s a time when I think we will see the highest and best uses enhancing centers. Over the last two years, we’ve seen almost exponential growth potential in DNBs, and we know they are anxious to showcase their products to the public. Apparel is getting strong again, skin care and beauty are doing well and medical retail — or medtail as we call it — is very strong.

Does that mean DNB Next will be working with metail tenants and other nontraditional clients?

It does. Medtail is a huge category with a growing need for spaces that is truly unique. We can apply the same approach for these tenants using our data and theirs or help them determine what their most relevant [locational] data is.

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