While bedding was late to wake up to the power of selling direct to consumers online, it’s making up for lost time thanks in no small part to Boll & Branch.
The digitally native vertically integrated brand’s online sales soared more than 68% last year, according to Internet Retailer estimates, which helped it secure a $100 million investment from private equity firm L Catterton in August.
The retailer’s goal is to become the “next great American brand,” says Scott Tannen, Boll & Branch founder and CEO. To do so, the retailer is embarking on an “aggressive” strategy to open up several stores next year. The retailer, which currently has a single store near its New Jersey headquarters, wants to have more than 10 stores operating within the next few years, he says.
Physical stores give consumers a chance to touch Boll & Branch products, which is important for many consumers shopping for bedding, Tannen says. “It allows for much deeper engagement with our product,” he says. “Customers come in and try our mattress out in person, maybe lay on our pillows and then continue to purchase online.”
Stores make sense for the retailer given the success of its current store, which is “very profitable” and generates millions of dollars in annual sales, Tannen says. Plus, the retailer’s in-store average order value is about two to three times greater than the average order value of orders placed online, he says.
While Boll & Branch has not yet announced where it plans to open stores, they likely will be located in markets where the brand has good brand awareness, he says.
“We have done a lot of local media in the Washington, D.C., market, and we have high brand awareness in that area, so it wouldn’t be a surprise if we open a retail presence there, as an example,” Tannen says. “The same can be said for a number of cities across the country.”
Physical stores help brands build brand awareness, which is why Boll & Branch expects its online sales to grow in the markets where it opens stores. Because Boll & Branch’s roots are online, its stores benefit from integrated inventory and a connected point-of-sale system from the get-go, he says. Merging store and online inventory is often a struggle for legacy retail chains, which have to update technology across a fleet of stores.
Despite its offline push, Boll & Branch says ecommerce will remain part of the brand’s core. “Ecommerce is going to remain the lion’s share of the business,” he says.
Boll & Branch also sells its products wholesale to Amazon.com Inc. and a few other smaller retailers, Tannen says. While some direct-to-consumer brands may bypass wholesale to keep their margins high with a direct connection to customers, Boll & Branch views wholesale as a necessary channel to get closer to, and in front of, more shoppers. “Our goal is to win market share for the overall category,” he says.
Boll & Branch appears to be on its way there.
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