Stores Still Matter (A Lot)
It wasn’t all that long ago that the industry was embroiled in the “bricks versus clicks” debate. On one side were the traditionalists, who were sure that online shopping would never really catch on (much less ever occur on a phone). On the other side were the true believers, who had stores going the way of the dinosaur in no time flat.
Flash forward 10 years, and that conversation has largely been laid to rest by the omnichannel revolution. Study after study has come up with the same conclusion: Today’s shoppers want to shop in and across multiple channels — and brick-and-mortar is integral to the mix.
But what’s most interesting — and speaks volumes to the relevance of physical retail in a digital age — is that shoppers want a variety of shopping formats from all retailers, even those born on the Web.
“If you want to increase the traffic to your website, open stores,” said Scott Galloway, founder of L2 and professor of marketing at NYU Stern.
Indeed, a revealing study by L2, “Death of Pureplay Retail,” links online retailers’ success to an omnichannel strategy that includes brick-and-mortar stores. According to the study, online-only retailers are at a distinct disadvantage due to their high marketing and shipping costs, which makes their business model challenging and, for many, ultimately unsustainable in the long term.
By contrast, online retailers that also leverage physical store locations drive higher organic site traffic and lower customer acquisition costs. What’s more, the study found, online retailers that also have opened brick-and-mortar stores can reap the dual benefits of both profitable new points of distribution as well as increased consumer awareness, the study contends.
There’s little doubt as to why even fans of online brands want to shop in stores: Nearly two-thirds of digital consumers cite the ability to see, touch and try merchandise as a main factor for preferring in-store purchases. Over half appreciate the ability to get products immediately, and one-third turn to stores to be certain about the fit and suitability of items, as well as in-person advice on fit and style.
Savvy online retailers have already heeded the call. Warby Parker, YogaSmoga, Bonobos, Rent the Runway, Bauble Bar, NYX Cosmetics, Birchbox and Blue Nile have all opened physical outposts. Even Amazon has entered the fray, opening a bookstore in its Seattle hometown with more rumored to be on the way.
One of the most recent pure players to go off-line is Fabletics, the fast-growing fashion activewear brand co-founded by actress Kate Hudson. It opened its first store in fall 2015 and now has six stores nationwide. And based on early customer reaction, more are in the works.
“Our customers really love the experience they have in our stores,” said Dustin Netral, VP retail operations. “And our most satisfied customers are those who have shopped both online and in store.” The synergies between online and offline are tremendous, Netral said. And there is also a bottom-line impact.
“Customers who shop both channels prove to have higher purchase frequency resulting in improved revenue,” he added.
The fact is omnichannel has trumped the story of bricks and clicks. As Tom McGee, president and CEO of ICSC, put it, “The story is now one of a shopper getting the best of both worlds.”
Marianne Wilson
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