E-commerce giant Amazon is poised to open grocery stores in Woodland Hills and Irvine as the company taps into a “clicks-to-bricks” trend that has online retailers expanding their reach by connecting with customers in a brick-and-mortar format.

A company representative confirmed late last year that Amazon will launch its first Amazon Fresh location at 6245 Topanga Canyon Blvd. in Woodland Hills, the former site of a Toys “R” Us store. The Irvine location, at 13672 Jamboree Road in Irvine Market Place, once housed a Babies R Us store. Amazon has pending liquor licenses for both locations.

Amazon hasn’t indicated when it expects to open the stores and officials with the company could not be reached for comment.

A trend reversal

Online retail has long been a threat to brick-and-mortar operations, but a new report from CBRE shows a 367% rise in e-commerce companies occupying physical store space in greater Los Angeles and Orange County over the last four years.

The study links the move to supply-chain limitations, rising advertising costs and an increasingly crowded digital marketplace.

Online businesses have added retail storefronts as well as temporary pop-up locations in partnership with established retailers. E-commerce companies are currently operating 120 storefronts and 76 pop-ups in the Los Angeles/Orange counties region, the report said. Most are in West Los Angeles and Orange County.

But that doesn’t tell the whole story.

Store locations on the rise

When viewed through a wider geographic lens that also takes in the San Gabriel Valley, Conejo Valley and West Ventura County, 28 e-commerce companies added around 50 brick-and-mortar or pop-up store locations in 2016. This year 68 online companies have already added nearly 200 physical store locations, the report said.

“Online companies have not been able to find a seamless solution for people who buy online and return items,” said Motti Farag, a senior associate of advisory and transaction services with CBRE. “Transitioning to a traditional store offers somewhat of a solution, and these companies are also finding out that this is another way to reach more customers in today’s evolving market.”

See and touch

Online retail offers definite advantages, including low prices, a huge selection of products and fast delivery. But some shoppers still prefer to see and touch products before purchasing, according to Farag.

“More and more consumers are becoming disappointed with online purchases because they might see something that looks great online, but it may look totally different and not fit when it arrives,” he said. “Brick-and-mortar stores also create a certain level of trust. It gives someone security to make that purchase.”

The presence of a physical store reduces strains on the supply chain by having products readily available for online order fulfillment and pickup, Farag said, and leading retailers have found that physical stores generate better brand awareness while also cultivating a loyal customer base.

A growing number of online companies have adopted this omnichannel approach as a way of staying competitive. As time goes on and more retailers jump on board, the distinction between retailer and e-tailer will become blurred, Farag said.

Amazon already has physical stores in the form of Amazon Books (with area locations in Pacific Palisades, Marina del Rey and Los Angeles), Amazon 4-star (Canoga Park, Glendale), Amazon-go (Glendale) and Amazon Pop Up (Glendale). The company also acquired the Whole Foods Market chain of grocery stores in 2017.

Online retailers with SoCal locations

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J.C. Penney lenders, landlords sign deal to keep retailer open SmileDirectClub, a Nashville-based company that makes clear, 3D-printed teeth aligners, has a total of 20 pop-up or brick-and-mortar locations in the greater Los Angeles/Orange County region, the largest number of any single e-commerce business.

Alex and Ani, which designs, creates and sells bracelets, necklaces and earrings, and Leesa, an online seller of mattresses, both ranked second with 15 brick-and-mortar or pop-up locations each.

Other online companies that have either physical stores or pop-up locations include jewelry retailer Baublebar; thredUP, a consignment and thrift store; Athleta, which sells women’s yoga and athletic clothing; and Warby Parker, an e-commerce retailer of prescription glasses and sunglasses.

From clicks to just bricks

Joymode, a Los Angeles-based e-tailer that rents everything from games and household items to bundled “experience” packages, took the brick-and-mortar option a step further this month when it opted to abandon its online operations altogether and focus on opening physical stores.

The move was prompted in part by their landlord’s plan to demolish the 30,000-square-foot Culver City warehouse where the company’s merchandise has been stored.

Joymode recently unveiled a “store-within-a-store” concept at a Walmart in Temecula, and more in-store locations are planned, according to company founder Joe Fernandez.

“The idea would be to have the goods stored at partner locations,” he said. “That could be grocery stores, or at the mall … we’re exploring different distribution models. We don’t want one centralized warehouse because that limits our flexibility.”