The Impact of E-Commerce on Brick-and-Mortar Retail Leasing

SKIP AHEAD TO

• Key Trends Driven by E-Commerce
• How CompStak Supports Evolving Retail Leasing Decisions
• The Bottom Line

The rise of e-commerce has transformed the retail landscape, creating both challenges and opportunities for brick-and-mortar retail leasing. While some predicted the decline of physical stores, the reality has proven more complex. Retailers are evolving their leasing strategies to integrate online and offline channels, creating more flexible, data-driven approaches to how they occupy space.

In this blog, we explore how e-commerce has impacted retail lease structures, tenant needs, and landlord expectations — and how CompStak helps CRE professionals navigate these shifts.

Key Trends Driven by E-Commerce

1. Smaller Store Footprints

Retailers are optimizing for experience, not just inventory. With more sales happening online, tenants often need less square footage. Instead of large stores packed with product, many leases now reflect a downsized footprint designed for:

• Product sampling and brand experiences
• In-store pickup and returns
• Customer service and engagement

2. Last-Mile Fulfillment Integration

Retail spaces are doubling as micro-distribution centers. Retailers are negotiating for locations that serve both customers and supply chains. Leases increasingly account for:

• Additional loading areas or storage rooms
• Extended operating hours for logistics
• Use of back-of-house space for online order fulfillment

Retailers like Lululemon, Warby Parker, and Allbirds are prime examples of tenants adapting their spaces for omnichannel fulfillment. Their retail leases often include logistics-friendly modifications such as extra back-of-house storage, access for delivery trucks, and layouts that support both customer interaction and inventory management.

3. Shorter and More Flexible Lease Terms

With rapid changes in consumer behavior and technology, retailers want flexibility. Pop-up stores, seasonal shops, and short-term leases are growing more common. Retail leasing now involves:

• Option clauses and shorter lease durations
• Early termination rights
• Tenant improvement (TI) clauses tied to flexibility

4. Hybrid Omnichannel Store Models

Brands are no longer treating online and physical as separate. Leases are now shaped by omnichannel strategies that require:

• Infrastructure for curbside pickup or QR code integration
• Data-sharing clauses between tenants and landlords (e.g., foot traffic, sales conversion)
• Custom layouts to accommodate both shoppers and staff fulfillment functions

How CompStak Supports Evolving Retail Leasing Decisions

In a retail environment driven by e-commerce and changing consumer expectations, having real-time lease data is crucial. CompStak provides:

• Retail Lease Comps for Omnichannel Brands: Understand how retailers adapting to e-commerce are negotiating leases across different markets.
• Data on Lease Term Flexibility: Track average lease durations and option clauses by tenant type or retail category.
• Insights into Build-Outs for Fulfillment: Analyze tenant improvement allowances for back-of-house logistics or storage enhancements.
• Trends in Rent Structures: Evaluate how rent levels vary in high-demand, fulfillment-friendly retail corridors.

With CompStak, landlords and brokers can benchmark against market norms and structure leases that align with omnichannel trends.

The Bottom Line

E-commerce hasn’t eliminated physical retail — it’s redefined it. Retailers now demand more strategic, flexible, and operationally integrated spaces. As a result, leasing strategies must evolve to reflect these hybrid models. By leveraging CompStak’s retail lease comps and transaction insights, CRE professionals can stay ahead of the curve, structure smarter leases, and better serve today’s dynamic retail tenants.