E-Tailing and Internet-Related Real Estate Cost Savings: A Comparative Analysis of E-tailers and Retailers

Abstract

This article explores differences in the corporate real estate strategies of traditional retailers and those of electronic retailers, or e-tailers. The primary issue addressed is whether e-tailing companies realize benefits of their non-retail, online operations, specifically in the form of lower real estate-related expense ratios when compared to traditional brick-and-mortar retailers. The study reveals three trends. First, the majority of retailers studied continue to focus their corporate real estate strategies in the retail space world. However, some companies are incorporating their online operations into their real estate strategies and are beginning to see lower real estate-related costs as a result. Second, there are differences among e-tailers in their real estate strategies as well as some indication of differences in the real estate-related costs associated with the strategy chosen. Third, e-tailers are not realizing real estate-related cost savings over their retailing competitors.