Apparel retailer Public Rec launched as an online-only retailer in 2015. It wasn’t until November 2019 that Public Rec opened a physical store on Bleecker Street in New York — which it closed five months later because of the pandemic, founder and CEO Zach Goldstein said.
But in October 2021, the brand opened a physical store again — this time in Chicago, where it’s headquartered. It also opened a new store in New York shortly thereafter (this time on 9th Avenue), he said, and one in Scottsdale, Arizona, about eight months later.
“We were pretty nervous about what stores could look like during COVID and post-COVID,” Goldstein said. Those three stores now account for approximately 5% of Public Rec’s total sales, he said.
Public Rec uses Leap platform to open physical stores
Goldstein said Leap used first- and third-party data to identify where Public Rec over- and under-indexed for its customer base. That helped Public Rec and Leap determine the top five or 10 markets the retailer should target for its first stores. The Leap platform launches and operates retail stores to help brands grow by running stores on the brand’s behalf. Store employees work for Leap rather than the retailers, and Leap holds the store lease.
“Our biggest customer base is in New York, and so New York has always made sense for us,” Goldstein said. “Our second-biggest customer base is in L.A., but then we have a significant base in Scottsdale.”
But the cost to open a store in Los Angeles would be considerably higher than opening in Scottsdale, Goldstein said. Leap helped him determine which market is makes sense to open a store. It factored in both the costs and the size of its existing customer base in each area.
“There are a few different variables that they’re triangulating to make sure it makes sense for us,” Goldstein said. Leap also operates all of Public Rec’s physical stores.
“Digitally native brands specialize in knowing their customer base — they have to in order to compete,” said Leap co-founder and co-CEO Amish Tolia. “But when it comes to physical retail stores, it shifts their focus to an area that they don’t have experience in.”
“The Leap platform enables modern brands to deploy retail stores turnkey — from insight-driven real estate selection and store design, to ongoing staffing and technology-driven operations,” he added.
Leap said anyone who shops at a Leap-powered store is added to the platform’s Universal Customer File. It said this is valuable because Leap and the brands using its platform share customer profiles. 90% of Leap store shoppers are new to the brand, it said. Moreover, Leap said it layers its email marketing program over the Universal Customer File, thus driving, on average, a 10% sales lift.
Public Rec paves omnichannel path
Even without offering store-pickup options (yet), Public Rec’s three stores helped the brand grow sales about 30% year over year in 2022, Goldstein said. He declined to attach a dollar figure to the growth. This increase came after the retailer experienced slower growth during 2021 due to COVID-19 and factory shutdowns.
More than 80% of Public Rec’s sales still come through its website — for now, Goldstein said. Wholesale accounts for the remainder of sales. But the brand’s average order value is higher in store, he said, declining to share specifics. Women shop in the brand’s physical stores more than online, he added.
“When the customer is in store, they get a more holistic look of the brand, and they’re able to see all the product at once,” Goldstein said. “It can be a different experience versus coming from a paid ad and being directed to a specific product and landing on a PDP (product landing page).”
Public Rec doesn’t offer buy online, pick up in store (BOPIS) at its stores but does plan to add it in the next six months, Goldstein said. He estimated curbside pickup won’t be available until at least the start of 2024. However, Goldstein said many of Public Rec’s customers make their purchases in the brand’s physical stores and purchase again online.
The retailer will sometimes ship orders from its stores. And when in-store customers try on items they want to purchase, but the brand doesn’t have the right color or size at the store, it will ship the product to the customer, fulfilling the order via its website.
It “lends credibility to us as a brand to have physical retail,” Goldstein said. The retailer has many customers who try on items in physical stores — where they test different sizes and fits — and later buy online, he said.
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