A real-world store is increasing the competitive edge in driving online sales for online retailers
High street shops have been reimagined as a showroom for a brand experience, led by global brands such as Apple and Burberry. This is encouraging customers to return, whether online or off. Now formerly online-only retailers are following this movement and opening storefronts of their own.
A couple examples of this can be seen with the fast fashion site Missguided, which now has prominent stands in two major shopping centres located in London. Another being Hotel Chocolat, which was originally an online-only retailer for seven years, that now possess over 100 real-world store locations in the UK.
Director of London Retail JLL, Duncan Gilliard said “Bricks-and-mortar shops are no longer purely about physical sales – they are key touchpoints for brand experience and showcasing product”
Some brands are deepening customer loyalty for future purchases by offering in-store services that are impossible to replicate online. Fitness retailer Lululemon holds yoga classes in some of its stores and Nudie Jeans allow customers to bring in their old pairs of jeans for recycling or repairs.
Although this doesn’t seem like it would make much difference on online sales, it does have a significant impact, with many retailers now looking to attribute online sales in particular regions to the closest physical store. Gillard comments “Retailers often report a halo effect – when they open a physical store, the online presence among internet users in surrounding areas magnifies”
Why go offline?
60 percent of sales for former pure-play operators are now generated by the physical store according to McKinsey. This makes them a key way for brands to connect with consumers.
Gilliard said, “Real-world stores help customers get to know a brand’s products, which gives them the confidence to buy online” In the case of clothing, the need and costs of product returns are reduced, as customers who know their size can order exactly what they need.
The U.S. menswear e-tailer Bonobos lets its customers choose clothing to try on with the help of stylists, they then go on to place orders at in-store tills for home delivery rather than walking away with them. This shopping experience sets the brand apart from others, but at the same time adheres to the service model its customers know.
Brands that started off in the digital space, often bring tech influences to their physical stores. An example of this is when eBay used biometric sensors and facial coding technology in its Christmas pop-up store to work out a product for a customer based on their emotional reaction to particular products.
The relationship between online sales and offline brand experience is something that retails are constantly grappling with as consumers increasingly shop on their laptops, mobiles and the high street.
Gilliard commented on this saying, “People drift in and out of online and physical worlds on their shopping journeys. As recent as three years ago, retailers considered their online and offline businesses separately. Now brands are trying to adapt and accommodate omnichannel shopping, with as many touchpoints as possible to interact with consumers.”
Now if a customer discovers a product in store, this doesn’t mean they are going to purchase it from there. They could price-check online, and end up purchasing it from a third-party e-commerce site. Click-and-collect offered by some brick-and-mortar stores has also been shown to increase offline sales by encouraging customers to purchase items related to their order.
Forward to future stores
Retailers are now rethinking how they design their brick-and-mortar real estate. Instead of just possessing lots of stores, they are making sure that all their stores are in convenient and accessible locations.
Gilliard said, “Retailers will invest more in the stores they have for an enhanced customer experience that can then drive online sales through third-party sites as well as their own platform, better understand this relationship, they will have to capture more detailed consumer data and build better customer profiles across these channels.”
Consumers have more choice than ever due to the breath of online shops, and real-world stores are a major opportunity for brands to win over customers.