As massive retailers such as Sears and Payless are leaving vacant storefronts, online indie retailers and pop-up shops have been moving into the brick and mortar spaces. More e-tailers are finding out the importance of having a physical presence, but getting the funds to move into a storefront can be a bit difficult. That’s where Fifth Wall Ventures can help.
Fifth Wall is a venture capital firm with a unique model where their investors and partners are owners and operators of real estate. Fifth Wall makes investments in great companies they think would be successful, according to Kevin Campos, the cohead of retail investments at Fifth Wall.
“The major difference between us and other ventures is we know we want to invest in companies that we can accelerate in a differentiated way,” Campos said. “We want to make sure we can accelerate those businesses through commercial partnerships with strategic partners.”
Adding a Dash of E-Tailers
Fifth Wall has backed more than a dozen businesses and they recently opened up investment opportunities to online retailers who they think are successful and can really grow as a business by having a physical presence. The company’s most recent investment is Heyday, a skincare expert retailer that will be opening its storefront in Los Angeles.
“We identify from the outside in that this is a category that’s interesting and we reached out to them because we thought they have a great team,” Campos said. “We loved what we saw after contacting them and learning more about the company.”
Technology for the Built World
Fifth Wall started at the intersection of real estate and technology to bring innovation into the real world, but real estate has been slow to adopt new technologies. When you walk into your house, it looks about the same as it did 50 years ago. Even though real estate is a big market and very important, retail is one of the most rapidly changing markets and Fifth Wall identified that as a great opportunity to expand their focus within the built world.
Selecting retailers to invest in involves a mix of both inbound and outbound efforts to identify great companies, according to Campos. Any business who feels like they’re a good fit can reach out to Fifth Wall through a variety of ways including email, which can be found on Fifth Wall’s website.
Fifth Wall is partners with Macerich, the third largest shopping center in the U.S., who comes across terrific and young brands all the time and refers them to the venture firm. Fifth Wall is constantly doing outbound work to invest in e-tailers and help them become even more successful by moving into brick and mortar storefronts.
Lending a Helping Hand
Already this year, 4,300 store closures have been announced from large companies such as GAP, Victoria’s Secret, and even Tesla, according to CNBC. With consumers changing their interest from name brand’s to mom and pop shops offering unique and different items, it’s bad news for large corporations but good news for independent retailers getting their name out there and in storefronts.
Fifth Wall also spends a lot of time helping retailers think through brick and mortar operation, according to Campos. Because so many of the companies start out online without any expertise, Fifth Wall can fill a pretty major gap early on for the organizations. They help cover everything including store design, building processes, staffing, and omnichannel policies, among others.
“Folks like myself who have built experience on the ground can help, or our partners can as well, who have tremendous experience in opening stores and working with contractors,” Campos said. “We provide all that support on an ongoing basis.”
It’s Never too Soon
Campos suggests that online retailers who are looking to expand their business should definitely think about opening offline. “It’s never too soon and I think it can be considered from day one. It depends on the company and it’s hard to do a lot of things all at the same time, but it’s good to start thinking about it early on.”
A lot of online brands will actually create a store within their office as a kind of laboratory to experiment with customers. Starting off small offers a great way to get feedback from consumers and you can build from there, keeping track of your earnings without breaking the bank with something too large to manage from the beginning.