Online-only Everlane takes an offline route
After vowing his clothing company Everlane would forever stay onlineonly, CEO Michael Preysman is going back on that promise. Because, once again, the retail landscape has changed.
“They told us retail was dead. They told us not to open a store. They told us to stick to the Internet,” Preysman wrote in a Facebook post. But that advice, he said, didn’t address a major drawback of being online: Customers can’t touch a product before they buy it.
That irreparable flaw of e-commerce, particularly for apparel, is slowly pushing online-only stores — such as Everlane — to open up physical spaces. Everlane is trending on startup database Crunchbase this week because it opened its first permanent store in New York City last weekend and has plans
to open another one in San Francisco in February.
“This is just the beginning,” Preysman wrote. “We’re taking it slow, but there are more stores on the way.”
The San Francisco company is known for chic and simple clothing. It was founded in 2010 and has $1.1 million in funding, according to Crunchbase. Over the past year, it has been experimenting with a temporary physical store in the Mission District called Everlane Lab, which was swarmed with customers on a recent Saturday afternoon.
The company’s jump offline signals yet another shift in the retail industry, which has experienced major turmoil the past few years. As Amazon and other online retailers steal more of the market, some of the biggest names in traditional retail — such as Macy’s, J.C. Penney and Sears — have announced sweeping store closures this year.
But, at the same time, niche and online-only companies are seeing value in opening up physical stores. Doug Stephens, founder of the Retail Prophet consulting firm, says this trend has more to do with the desire to create a “brand experience” rather than push more sales.
“Stores are living, breathing advertisements that can actually be more measurable and memorable than conventional ads,” Stephens said in an email.
Other companies that focus on specific products — such as eyewear company Warby Parker — have also opened up physical stores in recent years. Stephens said the reason behind this is simple: People want to touch a product before they buy it.
“Especially with apparel retailers, physical stores are a great means of introducing a shopper to the styles, quality and fit of their clothes,” he wrote. “From there they can buy more confidently online.”
Also trending: Boomerang Commerce
What it does: Compiles market data, such as consumer expectations and shopping behavior, to help retailers determine pricing strategies. Companies like Staples use Boomerang Commerce’s data to decide how to price their products competitively.
What happened: It released its annual report on holiday pricing, which indicates that Amazon is closely adjusting its prices based on other retailers such as Walmart, Target and Toys R Us. Why it matters: The company’s report indicates that Amazon is closely monitoring every major retailers’ holiday pricing, CEO Guru Hariharan said in a statement. This means that traditional retailers will need to accelerate their efforts to compete with Amazon, in terms of pricing and product availability.
Headquarters: Mountain View Funding: $20.5 million, according to Crunchbase Employees: 101-250
Orchid Labs
What it does: Creates a block chain-based network that it says allows users to access the Internet free of censorship, restrictions and surveillance.
What happened: Its founders — who are big advocates of net neutrality — were heavily involved in the online conversation about a free Internet this month, after the Federal Communications Commission introduced a proposal last week to reverse regulations on fair Internet use that were put in place in 2015.
Why it matters: As Internet access and virtual private networks are becoming increasingly difficult to access in places like China, Orchid Labs says it can insure that authorities cannot monitor Internet traffic or payments.
Headquarters: San Francisco
Funding: $4.7 million, according to Crunchbase.
Employees: 8