It seems like every week a retailer like Toys ‘R’ Us closes stores to concentrate on e-commerce. So isn’t it counterintuitive that e-commerce brands — including Warby Parker, UNTUCKit, Sugarfina, Trunk Club, and Boll & Branch — continue to open physical stores?
Not so fast. In truth, physical retail isn’t going away — but it is evolving. Today’s consumers crave connection, authenticity, and a personal experience, all of which are hard to find in traditional, big-box retail stores. A trend coined “clicks and bricks” is gaining steam to give consumers the best of digital and physical retail.
Why ‘clicks and bricks’ works
Online brands have been opening their own physical stores for years, but the movement has garnered more attention lately in part because born-on-the-web ecommerce brands are ramping up store openings despite pundits warning that retail is dying. Why is this all happening now?
Customers crave physical interaction — A survey from consulting firm A.T. Kearney found that two-thirds of online shoppers still rely on a physical store either before or after their purchase. No matter how convenient online shopping is, shoppers still can’t touch, smell, try-on, and visualize products. Physical stores bridge this gap.
Conversion rates — Across most product categories, conversion rates are better in-store than online. By incorporating physical stores into the buyer experience, retailers get the best of both worlds.
Digital tie-ins — Thanks to today’s advanced technology, retailers can create a holistic customer experience by offering digital tie-ins at physical stores. For example, at ModCloth’s store, shoppers can have their measurements taken by store associates. They can then enter that information into ModCloth’s “Fit For Me” app to receive clothing recommendations based on their body types.
The brands leading the way
Dozens of brands have chosen to go the “clicks and bricks” route, but a few stand out by offering a personalized, convenient, and unique experience.
An early mover in the space, internet-first eyeglasses retailer Warby Parker helped spearhead the “clicks and bricks” trend. It opened its first store in New York in 2013 because shoppers were asking to try on glasses in person.
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At the stores, shoppers can get eye exams on the spot and browse the brand’s full selection of eyewear. Warby Parker took cues from Apple retail stores to craft a seamless customer experience, especially when it comes to staff. The brand carefully selects and trains highly qualified associates and equips them with tablets that include a fully-functional POS system to reduce time spent in check-out lines.
Men’s apparel brand Bonobos — bought by Walmart for $310 million in 2017 — is another early mover in the “clicks and bricks” trend. The internet-based company started more than a decade ago, and launched its showrooms in 2015.
At Bonobos showrooms, shoppers consult with guides to try on new clothing. Customers place orders digitally, and the purchases are shipped (free of charge) to the customer’s home the next day. This approach eliminates the burden of hauling heavy shopping bags away from the store. It also serves as an inventory control strategy because there’s no need to stock all sizes and styles at every store.
UNTUCKit launched online in 2012 and opened its first retail store in 2015. UNTUCKit offers a dress shirt designed to be worn untucked. The brand was prompted to go the “clicks and bricks” route because enough customers wanted to see this new kind of shirt in person before buying. Further, the company’s brand recognition has been propelled by locating stores in high-end malls nestled between more storied brands.
Backed by a $30 million investment from Kleiner Perkins, UNTUCKit plans to expand further and open another 25 stores this year. The success of the retail stores (which the brand says are profitable) has helped UNTUCKit expand into other product categories, including mens’ pants, womenswear, and children’s wear.
Boll & Branch
Luxury bedding startup Boll & Branch took an interesting approach with its brick-and-mortar launch. While many startups opt for retail spaces in trendy, downtown areas, Boll & Branch wanted its retail location to be as accessible as possible. So Boll & Branch chose to open its first store at New Jersey’s Short Hills Mall.
The brand uses the retail space to educate shoppers about the product’s materials and supply chain. Similar to Bonobos, shoppers can place orders digitally in the store and have products shipped to their homes (free of charge) the next day.
Ecommerce juggernaut Amazon is a clear winner when it comes to online shopping, and recent moves demonstrate its ability to bring that innovation offline.
In 2017, Amazon bought Whole Foods, a leading grocery chain. The new digital tie-ins include:
- Free two-hour delivery to Prime members
- Dedicated retail space for its Alexa, Amazon Echo, and Amazon Dot devices
- Pick-up and drop off for Amazon purchases at Whole Foods stores
These digital features enhance the customer experience — especially for Prime members — and show how a strong retail presence can boost customer loyalty.
Another innovation is the launch of Amazon Go — a cashierless grocery store in Seattle. At Amazon Go, shoppers can pick up their items and leave without checking out. Purchases are then charged to the shopper’s Amazon account via the Amazon Go app.
These brands prove that consumers still enjoy in-person shopping, but are exhausted by the negative aspects of it — long lines, pushy sales people, and lack of inventory. An immersive and convenient in-store experience is a competitive advantage, and brands that focus innovation in this area will stay competitive in the evolving retail space.