Retail Strategy

Emerging Trends in DTC Brands

Direct-to-consumer isn’t new. But it is changing quickly, and brands who want to take their DTC brand into physical retail need to rethink how they engage with customers and how their online success can be reimagined in physical store design. But we don’t have to guess where things are headed with DTC and its overall position in retail strategy. Brands like GOAT USA, Gorjana, and Skims are already showing us how today’s DTC successfully translates their brands to physical spaces.

From Live Shopping to Live Experiences with GOAT USA

We’ve seen the way live shopping has taken off in Asia over the last decade. But the U.S. live shopping model is quite different, and it may be why GOAT USA was able to translate their live shopping model to their in-person experience.

Have you ever attended a live shopping event with GOAT USA? It’s not about pushing sales. The founders are chatting casually; attendees are commenting in real time. And before you know it, products are selling out. It’s not an over-produced infomercial; it’s a hangout.  And that’s the magic. They’re creating a live shopping experience where customers aren’t just being sold to; it’s more like a clubhouse where the consumers included.

GOAT USA used that clubhouse community they built in their live shopping experience to define their in-person retail experience. Their retail locations have become physical extensions of the live shopping “clubhouse” energy their customers know and love. Customers don’t come to their stores just to buy; they feel like they belong there. GOAT USA has demonstrated that physical stores aren’t only about driving foot traffic. They give consumers a place to feel at home.

From Social Selling to In-Person Social

Gorjana is a jewelry brand that has turned social selling into a goldmine. They offer their customers a seamless experience.  If you’ve ever watched a Gorjana product drop on Instagram, it’s a wild experience. Within seconds, the comment section is filled with consumers who have made a purchase.

What makes it work? Gorjana focuses on making their jewelry a must-have part of the lifestyle their consumers want – something that’s personal and aspirational but still accessible.

Gorjana has had success with their physical locations because they treat their brick-and-mortars as more than a shopping experience, but as a true lifestyle destination. Consumers step through the doors of their shops so they can experience the brand. Walking into a Gorjana store feels like scrolling their Instagram feed. It’s clean, approachable, and personal. Gorjana has succeeded by bringing the social selling experience full circle into the physical world.

Influencers Showing Up for Brands They Love

Influencer marketing used to mean getting a big-name celebrity to push your product. Today, it’s more about getting every consumer to become a brand evangelist. Sure, Kim Kardashian’s celebrity status matters, but SKIMS has turned influencer marketing on its head by attracting a wide range of influencers who are eager to share how the products actually fit. In fact, “SKIMS try-on” videos, where women of every body type share their honest opinion, has gone viral – and Skims encourages these honest reviews, relying on the level of transparency these videos offer to build trust in their brand.

“SKIMS doesn’t advertise. It orchestrates moments,” explains Minal Lohar for Tacitone. “This isn’t just about Kim’s massive social reach (though that helps). It’s about the brand’s ability to blend celebrity, timing, and cultural relevance into campaigns that feel less like ads and more like events.”

SKIMS’ DTC to physical retail strategy is right out of the ASG playbook: leverage that deep DTC data, create partnerships, and meet customers where they are. And it’s working – SKIMS is approaching a billion dollars in sales this year, with plans to open 22 more stores.

From Online Momentum to In-Person Presence

The success of GOAT USA, Gorjana, and Skims may have started online, but each of these brands has translated that digital success into physical stores by holding tight to their DTC roots.

The lesson for retail leaders: DTC success doesn’t end online. That’s just the beginning. And the most successful physical stores aren’t going to feel like legacy retail. They’re going to be real-world manifestations of the digital brand experience their consumers already love.

The question isn’t if you should go physical; it’s how you bring your DTC brand to life offline in a way that feels authentic, differentiated, and deliberately designed. Get our guide to launching physical stores from DTC roots.

Opening a store isn’t a milestone.

It’s an operating choice with real cost, fixed commitments, and downstream consequences. If you can’t explain what the store is for—and how you’ll know it worked—you’re buying risk without direction. A retail thesis gives you the clarity to spend wisely and scale deliberately.

What a retail thesis actually is

It’s a concise, evidence-based point of view on why physical retail belongs in your model now. It defines the store’s job, the outcomes that matter beyond four-wall sales, where the customer shows up offline, and how you’ll measure success. You don’t need a 30-page deck. You need a crisp answer to: why this format, in this market, at this time—and what earns the right to open the next one.

The jobs a store can do (pick the few that matter)

• Acquire a new segment you’re not winning online.
• Lower costs by absorbing returns or servicing try-before-you-buy.
• Lift brand through experience and community that ads can’t replicate.
• Drive halo—measurable e-comm lift in the trade area.
• Test new categories or margin structures in the wild.

All are valid. None are universal. Your thesis prioritizes which jobs your store must do, so design, staffing, KPIs, and capital follow function—not vibe.

Why brands stumble without one

Early traction can masquerade as a model. One good opening turns into overbuilt stores, pricier streets, and copy-paste metrics that don’t travel. Costs rise. The story blurs. The thesis prevents that drift: it sets guardrails, decision criteria, and stop-conditions before you sign again.

Real estate is not just a place—it’s precedent

Your first site tells landlords, investors, and your own team how you intend to grow. A flashy, high-street box can build brand heat but teach you little about what will scale; a demand-led site in a representative trade area yields the data you need for Stores 2–10. There’s no single right answer—only the one that matches your margin structure, capital plan, and risk tolerance. Pick the location that helps you learn fast and negotiate better next time.

Build the thesis, then the store

• Role: What problem does the store solve that digital cannot?
• Metrics: What will you track beyond revenue—conversion, traffic quality, halo on local e-comm, return deflection, NPS?
• Format: Size, service model, staffing, inventory philosophy aligned to the job.
• Market: Where the customer already is—validated by demand, not glamour ZIP codes.
• Proof plan: The window to evaluate, the thresholds to continue, and the changes you’ll make before store two.

Clarity up front sharpens every downstream choice—site, lease posture, kit-of-parts, and operating plan.

Measurement that actually informs decisions

Instrument the box. Count qualified traffic, tie POS to local digital lift, tag returns avoided, and monitor dwell and service times. Decide in advance what “worked” means and when you’ll decide. The goal isn’t to win awards—it’s to learn fast enough to either scale with confidence or change course with minimal sunk cost.

The payoff

With a thesis, the store stops being an expensive experiment and becomes a precise tool. You invest where the job is clear, you say no where it isn’t, and your second and third openings benefit from evidence, not assumptions. The best retail strategies don’t start with a floor plan. They start with a point of view you can execute.

Opening a first store feels like momentum. The lease behind it decides whether that momentum scales or stalls.

Treat the document as your operating system: what you sign now sets cost, flexibility, and precedent for every deal that follows. A good store can still be dragged by a bad lease; a disciplined lease can keep a mediocre first site from becoming a balance-sheet anchor.

Why “easy now” gets expensive later

Speed is seductive. You accept a long term, light TI, a wide radius, and vague rent-start language because construction is queued and the launch date is public. Eighteen months later, the format needs a tweak, a stronger submarket emerges, and your next landlord is pricing against the comp you just set. Exit is costly. Expansion is fenced. Your leverage is lower because your first contract telegraphed you’d take rigidity over discipline.

It’s not about “winning”—it’s about matching term to proof

You won’t get every clause. You don’t need to. Start with what you’re proving and how fast you’ll know. If payback is 18–24 months on a light build, a shorter base term with options and a performance out makes sense, even if rent is a touch higher and TI thinner. If the box is infrastructure-heavy, a longer term can be rational—provided rent starts on true delivery, relocation rights are clear, and sales kickers only engage at a high hurdle. The point is proportionality: commitment that matches evidence, flexibility where the risk is highest.

Real estate is not just a place—it’s precedent

Your first site tells landlords, investors, and your own team how you intend to grow. A flashy, high-street box can build brand heat but teach you little about what will scale; a demand-led site in a representative trade area yields the data you need for Stores 2–10. There’s no single right answer—only the one that matches your margin structure, capital plan, and risk tolerance. Pick the location that helps you learn fast and negotiate better next time.

The clauses that move the P&L

• Rent start and delivery: Tie rent to actual possession and landlord work completion, in writing. Soft delivery slips kill month one economics.
• Kick-out or break: A defined exit after a test period caps downside and forces a data-driven decision. No kick-out? Trade for a fixed break fee or a year-one rent ramp.
• Radius and exclusives: Narrow by distance, duration, and format so one store doesn’t block the next market or a pop-up that feeds demand.
• TI and abatements: Cash TI (or abatement) eases capex and sets a benchmark. Expect some give—term length, base rent, or guarantees—but document an amortization schedule so “payback” doesn’t morph later.
• Assignments and transfers: Protect the ability to sublease, assign, or relocate. Future you will need options you can execute without a landlord veto.

Precedent is real

Landlords talk. Brokers remember. Your first paper becomes your posture. If it shows clear thinking—e.g., options aligned to payback, clean rent-start mechanics, sensible radius—future deals tend to get easier, not harder. If it reads like a rush to keys, you’ll keep paying for speed in the form of rigid terms and thin concessions.

A simple test before you sign

Read the LOI and answer three questions out loud:

1. Downside: If the store misses, can we exit or reset without torpedoing the rollout?
2. Growth: Does anything here fence out our next logical site or format?
3. Cash: Do TI, abatement, and rent-start mechanics match our build, schedule, and payback?

If the answers aren’t crisp, you’re buying risk you don’t need.

Bottom line: A lease isn’t a task to clear on the way to opening. It’s the blueprint that determines what you can build next. Make the tradeoffs on purpose, match commitment to proof, and lock the mechanics that protect cash and options. Your future stores will thank you.

Moving from pure digital to a physical store isn’t a channel change; it’s an operating-model shift.

A lease fixes your costs, constrains your options, and sets precedent for every deal that follows. The goal isn’t to scare you off—it’s to help you sign with eyes open, so Store #1 becomes a blueprint you can repeat, not a one-off you have to unwind.

You’re not just a brand anymore—you’re a tenant

Online, you can pause, iterate, or reallocate budget in a week. A lease locks you into timelines, rent, and delivery conditions you don’t fully control. That’s not inherently bad; discipline can sharpen the model. But it means term length, rent-start triggers, kick-outs, radius, and TI aren’t boilerplate—they’re the levers that determine how agile you’ll be when reality doesn’t match the pitch. Treat the paper like strategy, not paperwork.

Tradeoff to understand: shorter base terms with options and performance outs increase flexibility but can raise effective rent or shrink TI; longer terms can lower rent and increase TI but limit your ability to pivot without paying for it.

Customer experience becomes operations

UX turns into how your store runs on a rainy Tuesday: staffing, training, shrink control, ADA, HVAC, storage, deliveries, hours, and center rules. Done well, four walls deepen engagement and lift e-comm in the trade area; done poorly, they add cost without moving the business. Build the prototype like a learning lab: instrument the box, measure conversion and halo, and be ready to tweak assortment, hours, and layout based on what the data says—not what the deck promised.

Your P&L gets heavier—and clearer

Rent, buildout, maintenance, insurance, and payroll don’t scale down because traffic dips. Fixed costs force rigor: productivity targets, four-wall contribution, payback, and any omnichannel lift need to be explicit and trackable. A weak lease or overbuilt store doesn’t just miss plan; it drags the P&L until you fix or exit. Bake the exit into the lease before you need it.

Real estate is not just a place—it’s precedent

Your first site tells landlords, investors, and your own team how you intend to grow. A flashy, high-street box can build brand heat but teach you little about what will scale; a demand-led site in a representative trade area yields the data you need for Stores 2–10. There’s no single right answer—only the one that matches your margin structure, capital plan, and risk tolerance. Pick the location that helps you learn fast and negotiate better next time.

A practical lens before you sign

• Term & options: match commitment to proof and payback; pair shorter bases with clear renewal paths or, for heavier capex, longer terms with flexibility elsewhere.
• Downside plan: performance-based kick-out or defined break option; if not, trade for rent ramps, relocation rights, or broader assignment.
• Growth room: narrow radius by distance, duration, and format so you don’t fence out the next store.
• TI & rent start: document delivery conditions, TI draws, and rent-start triggers tied to true possession and LL work completion.
• Prototype discipline: set target cost per square foot and a kit-of-parts you can replicate without re-engineering every build.

Bottom line: Going from clicks to concrete isn’t about finding a cool space; it’s about committing to an operating system you can scale. Make the lease your blueprint, design the first store to learn, and keep your options open—on purpose.

Why market timing and strategic advisory matter more than ever in retail and office lease management

As we reach the mid-point of 2025, retail and office leasing is experiencing a pivotal reset. The aftermath of pandemic-era disruption, the normalization of hybrid work flexibility, evolving consumer behaviors, and economic uncertainty impacted by on-again, off-again tariffs, have left a complex, yet opportunity-rich environment. For tenant rep leaders and corporate lease administrators, the question is not just what space to lease but when and how.

Timing, as always, is everything. And in today’s climate, it can also be the difference between overcommitting to yesterday’s lease standards or securing terms that futureproof your portfolio.

Retail vs. Office: Two Diverging Stories

Retail leasing in 2025 is gaining momentum, particularly in well-performing suburban nodes and mixed-use urban districts. Experiential brands and direct-to-consumer (DTC) upstarts are capitalizing on vacancies to test physical formats. At the same time, traditional retailers are reassessing footprints, trimming exposure in underperforming centers while continuing to invest in higher-performing flagship, community, and A-level mall locations where demand remains at all-time highs.

By contrast, office leases remain in a state of flux. While Class A assets in prime locations have seen some rebound, secondary office space continues to struggle. Hybrid work is no longer a trend; it’s a norm. This is pushing tenants to demand more flexibility, wellness infrastructure, and technology integration in exchange for any long-term commitments.

For lease managers overseeing multi-format portfolios or both categories, the divergence means a need for tailored strategies and precise timing.

Vacancy Rates: A Window of Opportunity?

The current vacancy rates in the retail and office sectors provide both a warning and an opportunity.

• Retail vacancy rates are tightening in desirable high-traffic corridors, especially for smaller formats and pop-up-friendly spaces. In the United States, the overall vacancy rate is 4.2% for the country’s 12.1 billion square feet of retail space, and that’s led to increased competition among occupiers, according to Costar.

• Office vacancies, particularly in B- and C-class assets, have been elevated, giving tenants significant leverage, especially in Q1 and Q2, when landlords are under pressure to fill space. That elevated level of office vacancies is expected to continue throughout the year and into 2026.

However, national averages can be misleading. Local micro-market insights, block-by-block trends, and demographic shifts are now more critical than ever. Opportunities vary significantly by region. Lease administrators and tenant reps must go beyond the data and ask: What do these numbers mean for this specific location, use case, and brand?

Landlord Concessions and Timing Tactics

In today’s environment, landlord concessions have become a key negotiating tool, and they vary significantly by asset class and region.

• Retail landlords are offering TI allowances, early termination clauses, and flexible expansion options in newer developments or redevelopments.
• Office landlords, on the other hand, are providing deeper rent abatement periods, full turnkey buildouts, and shared amenity upgrades.

But these incentives are time-sensitive. In markets where retail is heating up, the window to negotiate favorable terms is closing. Conversely, in office, waiting too long might mean missing out on desirable floor plates or access to premium amenities.

The message is clear: 2025 is not a year for reactive lease planning. It’s a year for precision and foresight.

How Strategic Advisors Add Value

This is where tenant rep leaders and savvy lease management teams can become invaluable. It’s not just about negotiating a lease; it’s about advising clients or internal stakeholders on the optimal time to execute, where to deploy capital, and how to leverage current market dynamics.

Whether it’s:

• Benchmarking existing leases against current market trends
• Timing renewals or relocations to coincide with seasonal dips in demand
• Or tapping into underutilized subleases or shared-space formats

…the best advisors in 2025 will be the ones who see around corners.

Navigating the Lease Market through 2025 and Beyond

The state of the lease market in 2025 is one of divergence, nuance, and rapid evolution. Retail and office are moving on separate trajectories, vacancy rates are more complex than surface numbers would have you believe, and landlord concessions are shifting with every quarter. For tenant rep leaders and lease managers, the strategic edge lies not just in execution, but in timing.

Now is the time to act with intention, supported by data, and guided by market-savvy partners.

The direct-to-consumer model once promised a cleaner path to profit. Cut out the middlemen, sell online, and watch your margins soar. But reality has caught up to the promise.

Today, DTC brands are facing rising customer acquisition costs, intense competition, and increasingly complex fulfillment logistics. The brands that are thriving are not relying on digital alone. They are showing up physically, in stores, in pop-ups, and in the everyday lives of their customers.

This is DTC 2.0. And it is hybrid by design.

The New Challenges of DTC

In the early days, brands could rely on Facebook and Google ads to reach new customers cheaply and at scale. But those days are over. According to Shopify, the cost of customer acquisition has risen more than 60 percent since 2015.

At the same time, the DTC space is saturated. With thousands of lookalike brands vying for the same audience, it is harder than ever to stand out. Simply having a good product is not enough. Brands need a strong narrative, a differentiated experience, and a loyal community.

And there is the operational side. Shipping, warehousing, and handling returns all fall on the brand. These are challenges traditional wholesale partners used to absorb. If your logistics fall short, customers notice. Fast.

The Pivot to Physical Retail

The irony? Many of the most digitally native brands are now going physical. But they are doing it their way—low risk, high touch, and data driven.

Sub-leasing Smaller Storefronts

Some DTC brands are partnering with landlords to sublease sections of existing stores. It is a way to gain high-traffic exposure without long-term commitments or massive overhead. Brands like Brilliant Earth are using showroom-style spaces to connect with customers in urban markets.

Pop-Up Shops

Pop-ups let brands test cities, launch products, and create buzz. Gymshark, for example, has used short-term retail activations to turn online loyalty into real-world community. These moments often feel more like events than stores, and that is the point.

 

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Shop-in-Shop Models

Partnering with an established retailer can be a smart move. Our Place and Cuyana have placed their products inside Nordstrom to reach new audiences while maintaining control over how their brand is presented. It is physical retail with built-in foot traffic and credibility.

These formats give DTC brands the ability to meet customers face to face, which is critical for categories like beauty, apparel, and home goods. They also provide the chance to upsell, build loyalty, and turn a one-time buyer into a lifelong fan.

Data-Driven Experience Design

Digital brands know how to track and personalize online. Now they are bringing that same mindset into the physical world.

Personalization

By connecting in-store behavior with online activity, brands can deliver tailored follow-ups. Did someone try on a jacket in store? Send them an email with a similar product, styling tips, or an incentive to complete the purchase.

Heat Maps and Layout Optimization

Retailers are using tools like heat mapping to track how customers move through stores. This helps optimize store layouts, product placements, and even staffing schedules.

Smarter Inventory Management

By syncing sales and behavior data across channels, DTC brands can better forecast demand. If a product is underperforming online but flying off shelves in store, inventory and marketing strategies can shift accordingly.

Loyalty Programs

Modern loyalty platforms tie together digital and physical purchases, offering personalized rewards based on real behavior. The bonus? Brands collect more first-party data, which is essential as third-party tracking fades out.

Final Thought: The Future is Hybrid

DTC is not dying. It is evolving.

The most successful DTC brands are building real communities, blending physical and digital touchpoints, and using data to create smarter, more human customer experiences.

They are not chasing a single channel. They are designing for the whole journey.