Online retailers seek to reach, reassure buyers face-to-face
CHICAGO — As traditional retailers scramble to boost their online presence, a growing number of online retailers are investing in bricks-and-mortar shops to put in valuable face time with their customers.
Online menswear brand Bonobos was among the pioneers when it launched its physical Guideshops, offering fit and style advice, in 2011, and later made its apparel available at Nordstrom. Eyeglass retailer Warby Parker, as well as Gap Inc.-owned Athleta and Piperlime, are other digital success stories that have set up offline locations.
Though e-commerce is growing fast, up 17 percent last year compared with 3.5 percent growth for bricksand-mortar stores, it represented just 5.8 percent of the $4.53 trillion in overall retail sales in the U.S. in 2013, according to eMarketer.
Online crafts market Etsy isn’t opening its own stores but is developing a wholesale service to help its sellers get their wares into independent boutiques and large retail shops across the world. Etsy Wholesale, which launched
If these online retailers don’t compete in an omnichannel way, they will lose ground to the bricks who are able to do this kind of thing.”
Joe Scartz, chief marketing officer for Digital BrandWorks
in beta a year ago and will launch publicly in August, screens and assists sellers to ensure they are able to produce at the scale necessary to satisfy orders from buyers such as Nordstrom, West Elm and New York boutique Michele Varian.
The trend, which has accelerated during the past year, doesn’t suggest a re- verse commute from digital to physical as much as the mounting importance of hitting customers from all angles, said Joe Scartz, chief marketing officer for Digital BrandWorks, a Chicago-based consultant helping retailers thrive in a digital world.
Smartphone-wielding customers have come to expect an always-on shopping experience, including the option to walk into a store, Scartz said. And as many traditional stores face down showrooming — that’s the practice of checking out the merchandise in-store and then finding the cheapest price online — by offering price-matching alongside the added value of their associates’ expertise, online retailers are having to compete on more than price, he said.
“If these online retailers don’t compete in an omnichannel way, they will lose ground to the bricks who are able to do this kind of thing,” Scartz said.
For some online retailers, pop-up shops are lowrisk opportunities to dip into the offline waters without making major lease or inventory commitments, Scartz said.
Often, the real moneymaking remains online while the physical locations serve public relations or marketing purposes.
“Physical real estate is very expensive in desirable locations, and brands that choose to do this often have secondary goals other than sales, such as awareness, Web acquisition or branding,” said Sucharita Mulpuru, an analyst with Forrester Research.