There is a new trend emerging among online retailers looking to expand their business reach. While brick and mortar retailers have for many years been rushing to develop online stores, now online retail startups have begun to open up physical locations, where customers are able to have direct interactions with their company representatives, products, and goods. A classic example of this trend is Gap, who last fall opened a brick and mortar boutique in which to sell their previously “online only” brand. Here are some of the factors driving this recent shift:
Stronger establishment of brand: Many online retailers are finding that establishing a physical presence can be an effective strategy for developing brand recognition and familiarity among their customer base. Custom shirt maker Proper Cloth recently made this shift by opening a SoHo showroom in June. While Proper Cloth has been in business online for 5 years, when it came time to expand sales, founder Seph Skerritt felt that too much advertising would cheapen the brand over the long term. Setting up shop at a physical location gave Proper Cloth the opportunity it needed to reach customers in an entirely different way.
Expansion of customer base: The bottom line is, for some customers shopping is a social activity and this demands a physical location. In order to appeal to this particular target group, online retailers have begun to open brick and mortar locations. For instance, fashion accessories startup BaubleBar has been experimenting with a variety of brick and mortar store models to expand their appeal.
Physical interaction with customers: As Proper Cloth’s Seph Skerritt explains, a physical location enables retail employees to spend time with customers one on one, determining their needs and building a certain level of trust, which in turn can be critical for sales. In an online setting, it can be difficult to develop the same type of rapport with both current and potential customers. As Skerritt’s experience demonstrates, the setup doesn’t need to be elaborate to be effective. In fact, Proper Cloth’s location is more of a showroom than a classic retail setting, where customers can get help with fittings and then place their orders online on site.
Clark, Patrick. “Click-to-Brick: Why Online Retailers Want Stores in Real Life.” Bloomberg Businessweek. 7/10/13.