As part of our a Thought Leadership with NAIOP, is publishing this six-part series of articles, E-Commerce Evolution:  Considerations for Commercial Real Estate, on the effects of e-commerce on commercial real estate, particularly retail and shipping. Additional information—including reports, articles and white papers, and a comprehensive list of resources—is available online at, and an overview with links to the other stories can be found by clicking here. 

Multichannel and Omnichannel Retailing 

The retail industry is continuously integrating its physical and online presences to keep up with technology and consumer shopping preferences, as today’s physical and digital storefronts are stretched across a variety of locations and devices. At the heart of this transition are multichannel and omnichannel retailing, terms that many use interchangeably. Emerging definitions refer to multichannel retailing as the sale of goods through at least two distinct channels – such as brick and mortar, television, catalog, social media, e-commerce, m-commerce – while the broader category of omnichannel retailing integrates many or all of these channels, both for purchases and for returns. 

Cross-channel activity is becoming the norm for today’s shoppers: a woman shopping for a new watch, for example, may begin by leafing through a catalog, then research different brands and models on her desktop computer, check retailers’ prices and availability on her tablet or smartphone, and eventually make an in-store or online purchase. If she later decides to return the watch, she may begin that process online, by visiting the store’s website to arrange to return the watch by mail or a package delivery service – or she may return an item bought online to a store. 

Omnichannel strategies already are impacting retailers’ bottom lines. Forty-one percent of the retailers surveyed by Forrester in 2013 reported that their buy-online, pick-up-in-store program had delivered significant positive improvements to their customer loyalty metrics, while 47 percent reported that their ship-from-store program had resulted in higher online revenue.

Savvy retailers are doing their best to optimize shoppers’ experiences via multiple channels, not just one or two. They are modifying store sizes and layouts, installing tablets that shoppers can use to order online while in a store, adding larger touchscreens that display additional inventory and creating both larger stores that offer shoppers new experiences (cooking demonstrations, rock climbing, wine tastings, art classes and so forth) and smaller stores that make the shopping experience more intimate.

The “buy it anywhere (and, increasingly, anytime), get it anywhere (and as quickly as possible), return it anywhere” concept clearly has enormous implications for commercial real estate. Retailers – and those who develop, own, operate and invest in retail and industrial real estate – need to understand changing patterns of consumer demand and respond by adapting their business models and practices. Consumers now expect retailers to provide a personalized and seamless omnichannel experience, and those who are figuring out how to do this – for example, by synchronizing technologies, services and processes in ways that enable consumers to shop, purchase, and return goods via multiple channels – will be the winners, while those who are unable to do so will lose out. 

How can a retailer strike the right balance between online and in-store purchases, returns, inventory management and physical locations – including both stores and fulfillment centers? As this integration unfolds, the CRE industry will need to provide not just new products, such as hybrid retail/distribution centers and fulfillment centers, but also new services. Successful business platforms will become integrated in ways that take into consideration not just a retailer’s showcasing needs but also its inventory management and fulfillment practices. This deeper understanding of the retail industry will enable CRE professionals to offer comprehensive retail and industrial solutions as the retail industry explores ways to find balance in this new paradigm.