Bart Mroz, founder and CEO, Sumo Heavy
We’ve all heard it before: Brick-and-mortar retail is dying. And while it’s true that online retail sales are higher than ever, there’s still plenty of room for the traditional storefront. In fact many e-commerce retailers, like beauty brand Glossier and menswear brand Bonobos, have opened retail showrooms to accommodate their existing online offerings.
But are all online brands cut out for the “real world?” Here are three questions brands should ask before making the leap from an online-only shop to a physical retail store:
Do I make my own products?
It’s a simple question but an important one. If you make your own product rather than sell other brands’ goods, expanding your direct-to-consumer approach offline may be a fitting strategy. The new wave of direct-to-consumer brands bring incredible value to online customers by cutting out retail middlemen, and the same can be applied to brick-and-mortar retail.
But that’s not all. Though his brand wasn’t exclusively online at the start, fashion designer Panichgul Thakoon decided to drop his partnership with traditional high-end retailers Barneys New York and Bergdorf Goodman in favor of a small boutique and new online store. Customers were able to shop the designer’s collection in-store immediately after it premiered on the runway rather than wait weeks or even months to see the creations in stores. In addition to giving customers access to the runway in real time, Thakoon was able to control the entire creative process, from manufacturing to customer delivery, beginning to end. And having control is what makes e-commerce appealing for so many independent and emerging brands.
How will it complement my customer’s journey?
Just because you think your product is great doesn’t mean it has a place in a storefront window. Ask yourself: Will my customer find value in testing/trying on my product?
On one end of the spectrum, male grooming brand Dollar Shave Club is wildly successful by all measures and a true retail disruptor, yet it doesn’t have any retail locations. As a monthly subscription service that’s built on convenience and value with free home delivery and a high-quality disposal product, Dollar Shave Club doesn’t need a physical presence.
On the other hand, luxury bedding company Boll & Branch saw the potential in letting customers experience the products in person and decided to “branch out” by opening a physical location in New Jersey.
“The main reason a customer wouldn’t buy our product online was because they wanted to be able to feel it themselves,” says Scott Tannen, co-founder and CEO. “We are remedying that with our physical location.”
But while customers can touch the fabrics in stores, they receive their products in the mail like they would an online order. In essence, the store is an “interactive experience,” not a traditional storefront. It still retains some of the qualities of an e-commerce site.
Eyeglasses and sunglasses provider Warby Parker offers a similar experience in their 60-plus locations. Customers can try on a range of styles and, with the help of a knowledgeable associate, order in-store and have their new specs sent straight to their doorstep. David Bell, a marketing professor at The Wharton School, believes brands like Warby Parker and Boll & Branch are creating a path for other retailers to follow suit.
“Retail of the future will look more like a Tesla showroom than an old-school dealer lot,” says Bell.
Am I willing to experiment?
But before taking the plunge and opening physical stores, e-commerce brands should consider the very real possibility of failure. While every retailer takes daily risks, the stakes are even higher when pursuing something as involved as a physical store. A forward-thinking vision alone doesn’t guarantee success.
Remember Thakoon, the fashion house that cut the middle man and went straight to consumers? Sales a half a year later turned out to be less than ideal, and the brand’s in-season sales model “has been put on hold in order to restructure.”
For its most recent runway show, Tommy Hilfiger also decided to try a similar see-now-buy-now set-up, but only time will tell if customers respond well.
If uncertain times don’t turn you off of the idea of physical retail, there are ways to test out the concept without putting all of your eggs in one basket. Greats, an online sneaker brand, took a foray into physical retail by “signing short-term leases ranging from three months to one year.” This flexibility allows the company to test the retail waters without a long-term commitment.
Testing the waters
So how do you proceed if you want to take your online brands to the streets, literally?
In short, don’t forget your online roots. Use your e-commerce expertise as a guideline and bring that knowledge and know-how to your physical store. Streamline customer assistance, payment, and delivery with the help of digital technology and a well-trained staff. Gauge customer interest with a pop-up store before making a big investment in a big retail space.
As online retailers continue to experiment with new sales models and open stores across the country, now is the time to weigh the pros and cons.
Sumo Heavy is a digital commerce consulting and strategy firm.