Future of Commerce Blog

How E-commerce Brands Are Finding Opportunity in Physical Retail

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As online home goods retailer Wayfair announces its plans to open their first physical retail store, we couldn’t help but wonder about the opportunity real-life experiences offer online-only brands. And though the “retail apocalypse” has been largely reported by outlets with headlines saying “retail is dead,” we beg to differ.

In fact, 67% of ecommerce brands opened retail stores in 2017, according to an analysis conducted by Hero. A recent SmarterHQ report found that nearly three-quarters of consumers shop at brick-and-mortar locations more than any other channel. And L2’s Intelligence Report: Death of Pureplay Retail concluded that online brands get a significant digital boost when they engage in physical retail.

Retail isn’t dead; single-channel selling is dead. Multi-channel sellers will prevail — including those that expand from their digital beginnings into real-world brand experiences.

But a permanent store is only one way to expand into physical retail. There are other ways to dip your toe in the proverbial brick-and-mortar pool. Let’s take a look:

Permanent brick-and-mortar retail stores

We’ll start with the most obvious: permanent brick-and-mortar stores. One classic example is Warby Parker, which found early success as an online-only eyeglass brand. It built a loyal and engaged audience base when the brand was still young, but over time, they realized that customers wanted to actually try the glasses on. It must be working: The brand plans to have 100 stores open by the end of this year.

The king of ecommerce also opened a physical retail store. Amazon Go debuted in Seattle in December 2016 with its cashierless, checkout-free store. The company has opened two more since then.

Temporary pop-up shops

Pop-up shops are a great way to experiment with brick-and-mortar retail but without a big resource commitment. Pop-up shops can be just a few hours or run over the span of several months. And pop-ups don’t have to be stores: They can be showrooms, fulfillment centers or even event spaces. The most important thing to remember is that a pop-up is an experience first, a store second.

Skincare and beauty etailer Glossier first tested physical retail through several pop-up shops,a and they’ve been so successful that now they’re opening permanent brick-and-mortar stores. 50% of shoppers who visit their store and pop-up locations convert — imagine how profitable you’d be if you could achieve that conversion rate online.

Mattress brand Casper also gained traction through its pop-up shops. Now they have plans to open 200 stores.

Looking to open a pop-up shop of your own? Check out these listing sites to find the perfect location:

 

Pop-in shops (pop-up shops within a retail store) and co-retail (a space shared by multiple brands) are two other pop-up-like approaches to expanding into in-person selling. Consider asking a local store if you can have a pop-up there, or look at those sites listed above. For co-retail options, check out options like Bulletin and Raas.

In-person events and markets

Physical sales don’t have to happen at a storefront. Events, markets, festivals and fairs can also present opportunities for online-only brands to make a footprint IRL.

When reusable beeswax-based alternatives to plastic saran wrap emerged on the market, I was curious (read: skeptical) about how effective they’d be. At a local festival in Boulder, Colorado, one such brand, Khala Cloths, rented a booth to show off their products and give away free samples. After trying it at home, I was impressed and eventually went to their site to make a purchase. It was a clever way to not only prove their product works, but also to make consumers remember them later.

Prive Reveaux is another online brand without a physical storefront. In addition to pop-up shops, the brand has co-hosted events with their brand partners — including celebrities like Jamie Foxx and Hailee Steinfeld — to raise awareness and secondarily promote their products.

Selling wholesale

Don’t want to manage or create a physical space yourself? You can tap into established retail businesses to start selling wholesale, piggybacking off their experience and success.

The Giving Manger had humble beginnings, starting their online business from home. After they gained fast and unexpected popularity, stores from all over the country would contact them to get their product in their stores. The brand has created a national presence without ever opening a store, pop-up or booth themselves.

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