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Analysis: Zappos goes brick-and-mortar


The news that Zappos opened its first freestanding store caught by the industry by surprise. Here are two expert views:

"It’s no surprise that online-only retailers are seeing the value of physical stores. Shoppers love stores, and most shoppers prefer stores for certain parts of their shopping journey—test and trial, returns. Many shoppers like to “discover” online, but for many categories (like shoes) a physical store is more fun.

So now Zappo’s gets the best of both worlds: a great online experience with fun and efficient discovery and delivery as well as a physical store for discovery and test and trial—and in Las Vegas? What’s not to like?

Most shoppers are realizing that online and physical stores are not either/or. Macy’s and Sephora are great retailers because they have great stores and great online experience. And now and Zappos are better because they not only have powerful online positions, but cool stores as well."

–– Michael Moriarty, a partner in the retail practice of A.T. Kearney, a global management consulting firm

“Based on our research and discussion with retailers, online-only players increase their web sales in the areas where they open stores (from as much as two times to five times). Drivers of the sales increases are not only brand awareness but also the fundamentals of how consumers prefer to shop. Even when transacting online, two-thirds of shoppers rely on the store throughout their shopping journey.

We expect this trend to continue, as online only players discover the value of digital + physical retailing.

Zappos is not an exception, but another player that confirms the trend of on-line only retailers venturing into the physical space Bonobos, Athleta, Ministry of Supply, Warby Parker and of course Amazon.”

--Andres Mendoza-Pena, principal in the retail practice of A.T. Kearney

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