- Amazon recently opened its newest store concept, Amazon 4-star, in SoHo.
- It’s the latest of several e-commerce-focused retailers to open up shop in that neighbourhood, including popular retail startups Allbirds,Everlane and Casper. SoHo has become a place where e-commerce companies can test out their brick-and-mortar strategies.
- According to Nicole LaRusso, director of research & analysis for CBRE Tri-State, there are a few reasons that brands keep choosing this neighbourhood, including the fact that rents are relatively low.
- We went to SoHo to see for ourselves how prevalent this trend is.
Amazon opened its newest store concept, Amazon 4-star, in New York’s SoHo neighbourhood on Thursday.
The store, which carries only Amazon’s top-rated products, opened its doors on Spring Street, where many e-commerce companies have been testing out their brick-and-mortar strategies.
They aren’t the only stores to do so. In the past year, it seems like more and more online-only stores have been opening up in downtown Manhattan. Retail startups like Everlane, Allbirds, Casper, and others which started as e-commerce only brands have been opening up their first physical retail stores in SoHo and surrounding neighbourhoods like NoHo and Nolita.
“Being in the SoHo neighbourhood makes our brand experience accessible to New Yorkers, and also to visitors from around the country and the world,” Allbirds told Business Insider. “Our first SoHo store was a concept store – it was meant as a learning opportunity for us and a way to interact with customers in our largest market.”
The neighbourhood tends to draw a lot of startups that are willing to invest more in their physical stores, according to Nicole LaRusso, Director of Research & Analysis for CBRE Tri-State. She explained to Business Insider that SoHo attracts sophisticated and thoughtful millennials that these brands are targeting. What’s more, the varied mix of brands in the area keeps the shopping experience interesting for customers.
This wasn’t always the case. Between 2010 and 2014, there were countless empty storefronts in SoHo. Rents were high, and shoppers were starting to shift towards online shopping instead of shopping in physical stores.
According to data CBRE shared with Business Insider, rents began to drop in early 2016, and e-commerce startups began filling the spaces either permanently or as pop-ups. In some cases, like with Everlane, stores will start out as a pop-up shop, and if the shop is successful, the brand will move in permanently.
We recently went shopping in SoHo and saw for ourselves how prevalent this trend is:
To track rents and study real estate trends in different parts of NYC, CBRE divides the city into neighbourhoods, and then divides each neighbourhood into different corridors.
In SoHo, there are three main corridors CBRE looks at: Prince Street …
… Spring Street …
… and Broadway.
Though those are the main corridors where CBRE tracks rents, Director of Research & Analysis Nicole LaRusso told Business Insider that there are other important areas for retail, like Wooster Street. There were quite a few retail spaces for lease on that block.
SoHo has a pretty big range of stores, including fast-fashion retailers like H&M, more high-end stores like Burberry, and a growing number of startups.
The most recent store to open in the neighbourhood is Amazon 4-star, the retailer’s latest store concept.
The store carries Amazon products rated four stars or higher, including products that are trending around NYC.
A lot of the startups, including Casper and Everlane, are spilling over to nearby neighbourhoods like NoHo and Nolita.
Everlane, which opened its first physical store in January, first opened a pop-up shop before opening its permanent shop at 28 Prince Street.
Allbirds is another example of a retailer that started exclusively online, opened a temporary storefront in SoHo shortly after, and eventually opened a permanent flagship store on Spring Street.
“Being in the SoHo neighbourhood makes our brand experience accessible to New Yorkers, and also to visitors from around the country and the world,” Allbirds told Business Insider. “Our first SoHo store was a concept store —it was meant as a learning opportunity for us and a way to interact with customers in our largest market.”
A big reason that so many retail startups are opening up shop in SoHo is the amount of open storefronts and low rent prices. There were “space for rent” spots on almost every block.
According to data from CBRE, rents having been dropping consistently in the area since early 2016, making it more affordable for smaller brands.
LaRusso also explained that SoHo tends to attract the sophisticated and thoughtful millennials that many of these startups are targeting. There’s a range of customers that come to the area because of the range of types of stores, from fast-fashion retailers to more high-end boutiques.
There are still a lot of vacancies in the area …
… but it’s filling up fast. CBRE data shows that SoHo is home to eight e-commerce startups that have opened up storefronts, Nolita has four, and NoHo has one. But some of the stores might close after the holidays, LaRusso said.
While it’s uncertain whether this trend will continue in SoHo, CBRE explained that other neighbourhoods like the Flatiron District and Union Square may start seeing a similar phenomenon.
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