insight • Mar 14 2023

Clicks to Bricks: Digital brands establish physical stores

It’s likely you’ve heard ominous stories about the “death of retail” splashed across news reports and social media. The narrative of a “retail apocalypse” declares shopping in person has officially gone the way of the dinosaurs. However, the reality of the situation is quite different. In fact, statistics show that 90% of retail sales happen in actual stores. As direct-to-consumer companies recognize these statistics, brick-and-mortar retail is becoming the sought-after destination for online retailers looking to reel in customers.

Why Digital Brands Invest in Storefronts

Online shopping is prolific. But there’s no arguing with the statistics: Shoppers spend up to 10 times longer in retailers’ physical store locations than they do on their e-commerce sites, Chain Store Age reports. Recognizing this, many companies have adopted an omni-channel retail business model, where businesses have both brick-and-mortar stores as well as an online shopping presence. Seeing as two thirds of consumers touch base with a retailer’s brick-and-mortar store before or after buying online, it’s important to recognize the vital role physical storefronts play in the buying process. 

Another reason for the rise of shopping in person is the cost of maintaining an e-commerce presence. Digital advertising costs continue to increase, and competition is fierce. Advertisers are competing for adspace, yet its effectiveness is decreasing. Customers understand how to navigate the web, avoiding advertisements to the best of their abilities. 

One of the most important reasons for the return to brick and mortar is the essential relationship that a storefront creates with the consumer. Physical stores are a vital component of the pathway to online sales. Offering face-to-face customer experiences builds a sense of trust, allowing consumers to come out from behind a cell phone screen and foster actual relationships.  Plus, customers can test out a product they’re interested in, whether it’s trying on sneakers or resting their heads on a mattress. E-commerce and brick and mortar have finally realized they’re stronger in tandem than on their own. That journey goes both ways: 54% of participants in a survey conducted by Shopify said they’re likely to look at a product online and buy it in-person. Interestingly enough, 53% of participants said they are likely to look at a product in person, and then buy it online. This is a strong demonstration of how both forms of retail can rely on each other.

Brands who Made the Move

In recent years, there have been a significant amount of digital brands that chose to expand into brick-and-mortar retail. That’s because companies understand the value of offering customers the flexibility to shop in the way that fits into their busy lives.

You’re probably familiar with eco-friendly footwear and apparel company Allbirds, which rose to success in the e-commerce world. But that didn’t stop them from opening 40-plus stores in the United States. As a result, they reaped the benefits: Physical foot traffic quadrupled at Allbirds’ locations from the first week of January through the second week of December in 2022, Chain Store Age reported.

Another popular brand that moved into brick and mortar is Casper, a digitally-native mattress company. They teamed up with Nordstrom and Target, and currently have 75 stores and plans for 100 more, Furniture Today reported.

Even before the pandemic, direct-to-consumer luggage brand Away was putting down brick-and-mortar roots. These days, they have 13 stores of their own. While travel volume hasn’t quite returned to what it was before the pandemic, the amount of money spent on business travel has rebounded to 80% of pre-pandemic levels, PYMNTS reported last month. Away’s carefully cultivated brand focuses on the aspirational quality of travel, making customers eager to interact with the brand in a personal way. This means visiting their stores, which are in metropolitan areas where people are likely to jet in and out of town. The addition of brick and mortar was a wise decision for a business that sees itself as much more than just a luggage company.

How DTC Brands embrace Brick and Mortar

It’s hard to build a relationship with a customer through an iPhone screen. After all, the ability to forge strong relationships is one of the greatest components of human interaction. It’s no different for brands who are looking to create a bond with their consumer. By creating in-store shopping experiences that are memorable, brands are more likely to gain long-time customers. Maybe they make use of concerts and events to draw crowds, or allow customers to try out the product in store. Unique store activations are a popular method of allowing potential customers to interact with the product they’re considering buying.

Brands recognize that the physical space is a marketing tool that’s just as valuable as a strong digital presence. There is significant evidence to demonstrate the worth of this concept: Back in 2009, Proctor & Gamble published a study that found customers will pay more for items they can touch. From special events to photo ops, brands recognize the distinct experiences that are cultivated through the in-store shopping experience. Through the powers of experiential design, retailers are looking outside of the box and taking hold of creative ways to make the retail experience more compelling.

Brick-and-mortar locations can also benefit from the e-commerce market’s ability to track customer behavior. Companies can take that information, and parlay it into informed decisions about store locations and buying patterns. By relying on the technology of DTC sales, brick-and-mortar storefronts are given a greater opportunity to thrive. It’s a symbiotic relationship that ensures companies can reach an even bigger customer audience. Add in the fact that landlords are finding creative ways to incentivize new retailers with shorter-term and flexible leases, and every part finds a source of value. 

The Future of Retail

Customers like flexibility. Whether it’s browsing on an app and trying out an item in store, or choosing to do the reverse, everyone has their own methodology. But no matter how someone shops, it’s safe to say that the retail industry isn’t going anywhere. Instead, it will continue to evolve. For example, consider how retailers shifted their design intentions during the height of the pandemic. From plexiglass shields and spaced-out products, stores quickly adapted to a system that provided the highest level of protection. Fast forward to 2023, and the retail sector is adapting once again. But this time, that means direct-to-consumer brands are expanding into brick-and-mortar business because they realize the incredible value that provides. Brands can reach a larger amount of customers in an organic way, and create stronger, lasting relationships.

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