YOOBIC's Retail Blog

The “clicks to bricks” phenomenon: Why are online brands moving to physical stores?

Posted on 16-May-2019 16:41:33

Considering that the physical store is supposedly dead and buried, we’re seeing an awful lot of new stores popping up - a lot of which are being opened by brands that previously only sold online.

That’s right: digitally native brands, riding high on the success of their disruptive direct-to-consumer model, are going old-school.

The likes of Warby Parker and Casper, having established themselves as powerhouse brands in the DTC world, are proving the high street nay-sayers wrong by breathing new life into brick and mortar retail.

Why are they doing it?

Even for people who love brick-and-mortar as much as we do, it’s a valid question. Why would a successful online-only company bother with all the additional costs - and risk - that come with running a physical store?

On a purely practical level it can work out cheaper, as delivery and return costs are greatly reduced. Increased visibility in the offline world is also a marketing exercise which, when done well, creates a kind of feedback loop to increase sales. Hyping up a new store on social media drives foot traffic, whilst each new store opening generates an average 37% increase in web traffic.

But perhaps more importantly, and despite reports to the contrary, consumers do still want to shop in stores. In fact, according to iModerate, around 80% of millennials think it’s important for brands to have physical stores.

That may seem surprising from a supposedly digital generation. But the reason we’ve seen such a sharp drop in store traffic isn’t because people no longer want to come to stores at all. It’s because right now, those stores aren’t offering them anything that beats online shopping.

This new wave of digital natives, however, are bucking the trend by seriously investing in experiential retail, adding that extra dimension that online shopping simply cannot provide. More on that later.

Ultimately, as much as we all love the ease of online shopping, there is something lost in a purely digital interaction with a brand. It will always be important for customers to actually see, touch, experience what they’re buying, not only on a practical level but to forge a deeper connection with the brand.

That deeper connection is what online brands are banking on when they migrate to brick-and-mortar retail. In-store interaction helps foster a kind of community, building brand loyalty and cementing their new position as “legitimate” retailers.

What are they getting right that others have gotten wrong?

So, how do digitally-native brands make the leap into physical retail and actually stick the landing?

By rethinking what a physical store can be.

Crucially, these brands are coming at brick-and-mortar retail with an entirely fresh perspective. Having already achieved success online, they haven’t yet fallen into any of those bad habits that established brick-and-mortar retailers have been struggling to break out of, like tired visual merchandising or a lack of consistency between stores.

Indeed, having previously showcased their products without a physical place to display them has given these brands a unique understanding of visual and brand identity, which then carries over to the look and feel of their stores.

Earlier we mentioned that ubiquitous phrase, ‘experiential retail’. This is where these brands really shine.

Rent the Runway, for example, is far from your typical store. Their new 8,300 square-foot San Francisco location goes above and beyond its main fashion-rental purpose, serving more as a community hub than just a store. There are co-working and event spaces, as well as a lounge area, coffee cart and beauty bar. To make things even easier for customers (and to reduce shipping costs) they have also partnered with WeWork, putting drop-off boxes in some of their locations. The idea is that their clientele are busy women who have a lot to get done, and their customer experience should aid that. A truly radical approach to customer service!

Casper, meanwhile, is approaching customer care in a similarly innovative way by providing them with a “nap destination” called the Dreamery. For $25, customers can hire a sleeping pod for a 45 minute power nap, complete with fresh sheets, pyjamas, toiletries, and even audio tracks from meditation app Headspace to help them drift off. Not the most conventional way to promote your brand, but at least it gets people talking.

And of course, there’s the biggest online retailer of them all: Amazon. Even this online behemoth, not content with dominating the web, has begun its brick-and-mortar takeover.

Their USP is pure convenience. At an Amazon Go store, you won’t encounter a single cash register. Instead, your credit card is charged on your way out, and then a receipt comes through on the app. Because of the hundreds of cameras inside the store, the QR code-like patterns on each item, and the weight sensors on shelves, it knows exactly what you’ve bought and how much it all costs. Sound spooky? Well if Amazon has anything to do with it, this is the store of the future.

For brands like these, the store is not a necessity for selling their products - they’ve already proven they can do that without an expensive lease. Instead, it serves as an all-encompassing showroom where they can amplify their brand identity and create a fully rounded customer experience.

It won’t always be easy. Physical stores bring with them a lot of complications and stress, and online retailers have to be ready to adapt to that. But the innovative, disruptive nature that is inherent in these brands, when harnessed right, will be a vital part of the physical retail revolution. Traditional retailers, take note!

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Topics: In-Store Technology, in-store execution, improving store performance, visual merchandising, retail trends 2019

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