As the retail industry recovers, retailers are looking for effective ways to expand their brick-and-mortar presence and unlock sales channels to acquire new customers and increase brand exposure. Experiential pop-up shops and turnkey retail locations are thriving as a means to test new concepts while attracting new retail center foot traffic.
Turnkey retail space is especially popular with digitally-native brands that are beginning to build a physical store presence. Moving from a purely digital environment to a physical location is not an easy undertaking. Decisions about market choice, site location, size of the store, operational costs, and consumer-facing technology are all critical components.
Both retailers and landlords are discovering the unique benefits of turnkey retail, which we outline in the following article. Retailers enjoy the simplified approach to setting up a new location and landlords benefit by luring new and emerging brands to their centers.
What is turnkey retail?
A turnkey retail space can be as simple as a clean white box or a fully built-out store with lighting, product displays, mapped-out customer journey, technology and even staff.
The benefits of turnkey retail
Landlords and Owners
Mall, shopping center and high street retail landlords can benefit tremendously from offering turnkey solutions to retailers. This option provides the ability to fill vacant space with a short-term pop-up while marketing to a longer-term tenant. Turnkey spaces provide broader appeal to retailers, generating more leasing activity and potentially multiple offers for the same space. It also gives landlords the ability to create a revitalized, highly unique shopping experience by luring new brands to the center, resulting in heightened foot traffic.
Putting the right team together to execute on turnkey offerings from the lease transaction and planning, through construction, technology and staffing is extremely important. Landlords need to execute seamlessly and efficiently, so developing unique partnerships with retail businesses and service providers who can advise and execute hand-in-hand is vital.
Retailers and Brands
Turnkey stores provide enormous advantages for retailers and brands. It allows them to focus on what they do best—retailing—and skip the headaches associated with hiring and coordinating teams and timelines, not to mention the higher expense and pressures to get it right. It also offers up a chance to test new markets, locations, customer demographics and/or product assortments.
Turnkey solutions are especially helpful to new brands that don’t have the knowledge, experience or money to invest in modern store buildouts. It ensures a quick start-up and that operations run smoothly, including hiring the right staff which can be daunting for new retailers.
For digitally-native brands who predominately showcase their brand and products via the web, these turnkey solutions offer the chance for immersive brand storytelling in a way that cannot be replicated anywhere else in the business. It also gives increased exposure to new consumers resulting in a widened customer base.
Make your space move-in ready
First consider the size, location, demographics and neighboring tenants to determine what types of retailers or brands might fit into the mix within your current shopping destination. Then think about what might attract those types of tenants.
There are several approaches to turnkey space depending on the amount of effort and capital you are willing to put in. On the lower end of the spectrum, you’ll need to work with existing tenants during move-out to minimize damages and save items that could potentially be reused by your new turnkey tenant. A clean, freshly painted store can help potential tenants envision how the space could be utilized.
On the other end of the spectrum, providing a white box move-in ready store with temporary lighting, fixtures, racking or display shelving will go a long way when attracting the right tenant. Including extras such as point-of-sale technology, customer journey options and hiring staff will provide an even better turnkey approach for the retailer.
When it comes to negotiating leases for turnkey solutions, remember to keep restoration clauses in mind.
Cushman & Wakefield’s Retail team excels at advising both landlords and retailers on turnkey retail strategies and opportunities by leveraging unique services and partnerships, deep industry knowledge, as well as technology and data, providing a valuable and seamless approach. Together, we believe we can ignite growth and transformation across the industry and provide even further connectivity to the consumer for our clients.
Successful turnkey retail solutions
Leap provides modern brands with a platform to launch and operate physical stores. Leveraging technology, highly trained staff and real estate expertise, it offers a successful and scalable growth channel to omni-channel retailers. Cushman & Wakefield partners with Leap to provide the ultimate turnkey offering. By utilizing technology, data and analytics, Cushman & Wakefield consults on new opportunity market entry and strategic expansion for Leap and has represented the brand in some of its lease negotiations and transactions. Leap handles all aspects of financing on behalf of brands. Providing landlords viable retailers with profitable growth channels mitigates risk for both the landlord and tenant. Leap’s “clustering strategy” allows for economies of scale when it comes to space shifts, facility operations and management. Its latest cluster of store openings included emerging brands such as Something Navy, Dormify, Luli and Faherty. Now that’s taking “retailing as a service” to a whole new level!
“Turnkey retail solutions allow brands to open brick-and-mortar stores with much less overall risk, significantly reduced costs and with agility and adaptability. The Leap platform addresses the major pain points and challenges to opening stores using technology and data for site selection, capital expenditures, hiring staff and implementation of omni-channel services. Leap's clustering strategy - putting brands near one another - has proved to be critical in reducing costs for brands while increasing the success of their physical locations.”
- Rebecca Fitts, Director of Real Estate, Leap
Macerich, one of the largest owners of shopping malls across the U.S., offers a turnkey solution for new brands by a sub-division of its team–BrandBox. Emerging retailers get matched with a BrandBox team consisting of a leasing professional and a Brand Success Manager who shepherds the tenant through the entire process including site planning based on customer demographics, co-tenants and budget. BrandBox offers three options for store layouts with distinctive design themes. It manages every aspect of the building process including making sure the back of house is stocked with cleaning supplies. Partnering with RetailNext, BrandBox even has an in-store analytics platform to track metrics on store performance and a user dashboard that tracks every aspect of the brand’s store for further ease of navigation.
“Macerich works to ease what can be a large barrier for online brands to try physical retail. Many landlords are focusing on adjusting rents and terms to lower the barrier, but we realize there are other items that need to be addressed: space condition, ability to merchandise and, of course, marketing. Ultimately, physical stores allow emerging brands to not only bring their brand to life through in-store experiences, but can also use their real estate to increase order values, to fulfill online orders, to decrease shipping on last mile, and to acquire new customers.”
- Gabrielle Licht, Leasing Manager, Digitally Native Vertical Brands, Macerich
Winston Retail offers a 360 turnkey approach and a la carte services for pop-up retail. A thorough and efficient launch process allows brands the ability to flex up or down, paying for the work when it’s needed. Services include staffing, promotional support, creative design, training operations, analytics and more. Recent brand activations include Canada Goose, Felix Gray and Hot Sox.
Winston Retail has delivered best-in-class consumer experience in retail brick-and-mortar and wholesale for 17 years. We offer a menu of services to support brands venturing into fulltime or temporary brick-and-mortar retail. Our turnkey approach or a la carte services have supported 100+ brands who have expanded their retail footprint or are direct-to-consumer brands first movers to physical retail. We learn the capabilities each brand has or does not have internally and provide the solution to execute their vision - Jan Croatt, CEO
Turnkey made easy
Turnkey retail is a creative way for landlords to maximize marketing, quickly fill vacancies and draw a steady flow of traffic to their destination as consumers continue to seek new shopping experiences. For retailers, it provides a quick, low-risk point-of-entry into a brick-and-mortar presence, providing a new sales channel to reach the customer. If you’d like to learn more about how Cushman & Wakefield’s Retail team can help with your turnkey strategy, please contact Alanna Loeffler.