Let’s get physical: why digital brands are opting for brick-and-mortar stores
9 Jul 2018
The retail world may be moving and shaking online, but 67% of ecommerce brands have opened a physical store because the demand for sensory shopping remains. When people commit to spending their money, they want to see tangible investments and sometimes online pictures simply don’t do the products justice.
For brands in the know, how they present themselves in the real world is considered as important as their online presence. Not only does this raise brand awareness but it encourages a deeper relationship between people and their products. Someone will always remember an unexpected compliment at a changing room over an impulse buy online. Ecommerce may be more convenient, but the connection with our screens is only one-dimensional.
According to Shopify, 94% of total retail sales are still generated in physical stores. The magic of the store (i.e. direct-to-consumer selling) is that no middleman is hovering up the bottom line. Savvy digital brands are well aware of this and are moving into this arena. The world’s largest e-commerce giant Amazon now controls 460 Whole Foods locations, giving them what they need to build a global warehousing and delivery infrastructure. “Amazon did not just buy Whole Foods grocery stores. It bought 431 upper-income, prime-location distribution nodes for everything it does,” tweeted Dennis Berman of Wall Street Journal. The much-loved interiors brand, MADE.com, have done a series of pop-ups including one on LinkStreet to raise brand awareness in Birmingham and increase their order value online. The result? A 73% increase in visits to the website. And look at Apple, 80% of their online sales have come from an in-store interaction.
Ecommerce brands also see physical stores as opportunities to collect content in an organic way. Glossier often uses user-generated photography from their pop-ups to share online. Valuable data can also be collected offline to further bolster their online presence, such as email sign-ups. In-store events also give companies the chance to curate an environment that fully encapsulates their message without the risk of being diluted, which is often the case on the internet where it’s becoming more difficult to stand out from the crowd.
The cost of online advertising is also rising exponentially, so brands may get more bang for their buck through real life promotions. Retail is media, and we’ve seen an increase in brands using pop-ups as experiential marketing space. Physical stores also work because salespeople add something to a shopping experience where the internet falls short – your bags are carried, complimentary refreshments offered, and so on. Personal, real-life connections are much harder to ignore than a flashing banner ad. For smaller brands thinking about opening a store, a good way to test the waters is through a pop-up. It’s the perfect way to experiment without commitment and avoid huge financial risk.
Overall, the experience of shopping in real life remains an important part of retail so more and more digital brands are choosing to bridge the gap between their online and physical presence. Take Everlane for example: after trialling a series of pop-ups, this ecommerce fashion retailer has finally decided to launch their first physical store in Soho, years after the founder Michael Preysman declared that he’d rather shut down his company than open a store. Surely that says something.