From Digital to Brick and Mortar: Why Some Brands Are Making the Move to Physical Retail
E-commerce is taking over the way we shop. If you need proof, just look at the retail stores that are downsizing. Staples. Payless ShoeSource. Macy’s. JCPenney. Even Sears. Shopping malls are quickly becoming ghost towns.
But wait—not everyone is turning their backs on a physical retail presence. Some e-commerce merchants are making a move in the other direction, going from digital to brick and mortar.
In a recent Forbes piece, Nitin Mangtani makes a case for physical stores because consumers want the personal interaction and hands-on experience when buying certain products. It’s tough to buy apparel online if you need to try it on first, for example.
Then, there’s the instant gratification that shoppers seek—if you’re waiting five to eight business days for your shipment to arrive, chances are you may wish you’d driven over to the local store and bought it off the shelf.
So, how do brands who have a digital presence successfully transfer that to a brick and mortar presence? One example is Warby Parker, which started as an online-only retailer of prescription eyewear. They’ve since opened some small physical locations where customers can try on frames. By starting out slowly and growing its physical presence, the brand has been able to straddle both worlds. They plan to grow from 50 to 75 stores this year.
“I don’t think retail is dead. Mediocre retail experiences are dead,” said Neil Blumenthal, Warby Parker’s co-founder.
Sophia Perlman, an experience strategist for George P. Johnson Experience Marketing, contends that the rise of online shopping makes in-person experiences even more valuable to consumers. 85% of shoppers say they shop in stores because they want to “touch and feel” items before they buy.
Making an even stronger case for digital merchants to have a physical presence, research firm IDC says that consumers that shop both online and in-store have a 30% higher lifetime value than those who shop using only one channel.
Even e-commerce giant Amazon seems to want to bring back brick and mortar stores. It’s opened physical bookstores in San Diego, Portland, and Seattle, with another set to open in San Francisco.
Could it be that there are some things consumers would rather buy in person?
Men’s clothing brand Bonobos thinks so. After building its online presence, Bonobos opted to open showrooms to provide personalized service to consumers. While they continue to process online sales and shipping, the service appeals to their customers, with their in-store sales per square foot average $3,000, more than six times that of a national retailer.
Some online retailers view the physical presence as a way to move beyond simply selling goods to providing an experience. An example of this is Ministry of Supply, a Boston-based merchant who sells high-performance men’s business attire. It offers a co-working space for its customers featuring Wi-Fi, free printers, phone chargers, coffee, wine, and beer.
Another example of a brand providing an experience in a physical space is dating app Bumble, which has opened a “hive” in New York City where people can meet their dates. It offers complimentary drinks, snacks, and entertainment and is the “first in a series of experiential destinations.”
While some brands have succeeded at marrying an online presence with a brick and mortar approach, Google’s pop-up store, Made by Google, was open for only a short time over the holidays last year in New York City. Consumers could try—but not buy—technology such as Google phones, home gadgets, and VR headsets. Google used the pop-up experience to gauge consumer interest and build hype before deciding to make the leap to a permanent physical presence.
“For marketers and retail executives of digitally native brands rethinking the traditional brick-and-mortar model, perhaps the smaller pop-up experience for new products or services would be a smart test that can gather audiences, provide instant feedback, and also serve as a way to create brand evangelists without spending too much on labor, rent, or advertising,” says Haniya Rae, Forbes contributor.
It seems the successful merchants will be those who innovate by blending their growing online presence with state-of-the-art brick and mortar stores. We’re sure to see more brands follow suit as retailers continue to compete for shoppers’ attention—and dollars.