03 Mar eCommerce Marketing goes retro: From clicks to bricks
In our progress-obsessed world, online shopping was supposed to kill the retail store. But after years of buying badly-fitting shirts, touch screens with unexpected features, and didn’t-know-they-were-that-color shoes online, consumers want to try something else. In response, eCommerce retailers that used to do business exclusively online are heading back into brick-and-mortar shops.
In the past few years, eCommerce shops have opened brick-and-mortar locations across the country. Warby Parker, a low-cost glasses retailer that lets online users try on frames at home and return them by mail, has opened 14 physical locations across the United States. Bonobos, which started out selling men’s pants, opened 10 physical stores after its shirts weren’t selling online. Most famously, Amazon, the ubiquitous retailer and purveyor of super-fast shipping, opened two pop-up shops in California over the holiday season and has plans for a permanent brick-and-mortar location in Manhattan.
On left, Warby Parker’s storefront; on right, a look into Zappos’ pop-up shop
Other retailers have delved more tentatively into the physical location shop with pop-up shop locations. Shoe and clothing retailer Zappos opened a temporary 20,000 square-foot location for the holiday season in order to convince consumers to purchase apparel in addition to their more popular shoes. With an $8 billion market growing at a rate of 16% per year, temporary retail stores are a popular option for online retailers seeking a cheaper trial period in the physical space.
So what gives? Are shoppers tired of the “ship, try out, ship again” routine? Will clicks-to-bricks be a requirement for every online retailer someday?
One thing is clear: eCommerce retailers are getting the message that shoppers are looking for multiple shopping channels, particularly in purchasing items like clothes or certain technologies that have characteristics that can’t be parsed out through web-based pictures or descriptions. These companies also understand the consumer’s interest in interacting with actual people, rather than staying in anonymity online. In-store interactions and good customer service are ways to improve brand reputation in new ways for online retailers.
For retailers, opening physical stores is one of the better ways to grow an online company once early press and buzz has worn off, giving the company a new way to advertise outside of traditional channels. Opening a store or two can add additional costs, but can also help the retailer reach demographics who may not shop primarily online. Specifically, online retailers don’t get the recognition they would on well-trafficked streets or in shopping malls, so physical shops expose the business to customers who wouldn’t otherwise have known about it. Additionally, in the overwhelming world of online shopping options, a physical store can make a retailer stand out from the pack.
Birchbox’s storefront is located in trendy SoHo of Manhattan
There will be plenty of online retailers who stay out of the fracas. While the primary purpose of many of these retail stores is to provide additional marketing, the hurdle, of course, to opening a physical retail shop in addition to maintaining an online presence is the capital required. Makeup subscription website Birchbox opened a 4,500 square foot storefront in the much-coveted location of SoHo, NYC – an investment undoubtedly made possible by the $72 million in funding secured since the company’s start in 2010.
eCommerce has been popular because these retailers cut the costs required by physical shops and price their merchandise accordingly. To open a physical space, online retailers that formerly didn’t need to pay rent, hire salespeople, or leverage middlemen would need to drastically restructure their operations. As a result, customers would need to change their pricing expectations, too. Physical shops, particularly those that sell merchandise in addition to showcasing products, may not offer the same low prices as their online counterparts.
So will the rise of clicks-to-bricks mean huge changes in the eCommerce world? Certainly, well-established companies with a lot of capital and an interest in expansion can and will take advantage. But with the high entry-threshold for what essentially boils down to an advertising platform, plenty of eCommerce retailers won’t be heading for Main Street.