Hunton Retail Law Resource

E-commerce and online shopping are here to stay, but the explosion of new technology and the number of resources available to facilitate online shopping is an opportunity for retailers to embrace new ideas and concepts that will increase foot traffic to their physical locations. The store-within-a-store concept isn’t new, but the type of store-within-a-store retailers have conventionally seen is changing and bringing in new business.

b8ta is an example of a retailer that is on the forefront of providing experiences to the consumer, and it has partnered with Lowe’s to help customers try out their technology products before buying them. There is not an exclusive brand of electronics that are available for customers to interact with; instead, b8ta sets out the hottest products that consumers want to touch and feel before bringing them home. b8ta has stand-alone stores as well, but partnering with established retailers to offer experiences within a store is a creative way to reach more customers that keeps costs down.

One sticking point which can hamper efforts to bring experiences into the store are restrictive lease provisions, particularly assignment and subletting provisions that restrict the rights of the retailer to enter into subleases or license agreements with potential in-store partners. When negotiating leases or amendments, retailers should think about building in flexibility in assignment and subletting sections of leases to allow for more store-within-a-store concepts, such as expanding the type of assignments that are typically allowed without further consent by the landlord. Retailers should also confirm that any ancillary uses of potential in-store partners are not in violation of any exclusive use restrictions.

Just a few short years ago, the idea of drones delivering routine purchases to consumers or the extensive options available in virtual reality technology were not easily imagined, but rapidly advancing technology has changed the world of retail significantly. Retailers who figure out how to use these developments to benefit their physical storefronts will be ahead of the curve, provided their lease agreements allow the flexibility for such uses. If you can’t beat them, join them (or have them join you in a manner that is mutually beneficial).