This guest post was written by Michael Ansaldo, a veteran journalist and content marketer with 20 years experience covering technology and business.
Amazon dropped jaws when it announced plans to open retail shops. Isn’t this the brand that supposedly killed the brick-and-mortar bookstore?
Birchbox, Warby Parker and other popular online retailers have also gotten physical with offline stores.
What’s driving these online brands to hang brick-and-mortar shingles?
“Physical retail, when done properly, allows for enriching, satisfying, magical, inspirational shopping experiences,” says Bridget Johns, head of marketing and customer experience at RetailNext, an analytics platform for retailers. “[It’s] something special, something different and something truly memorable.”
The most obvious advantage of physical stores is that they enable human contact. Shoppers get questions answered in real time, and retail staff can surprise and delight customers in ways they can’t through a computer interface.
“Physical retail affords the opportunity for longer, uninterrupted personal interactions between the brand and its sales associates and shoppers,” Johns says. “Stores allow connecting on an emotionally satisfying level and the establishment of long-lasting personal relationships between store and shopper.”
You also can’t walk by a website. “A physical location that has good visibility can provide 24/7 marketing that a website with the best SEO cannot,” says Ani Collum, partner and consultant at Retail Concepts, a retail consulting firm.
Higher conversion rates
Stores also create more purchase opportunities through personal interaction with retail staff, strategic-attribute signage and fitting-room messaging, Collum says.
Conversion rates for stores — averaging as high as 40 percent — are notably higher than those online, which average closer to 3 percent. “Websites can suggest ‘other items you may like,’ which can definitely impact incremental purchase behavior, [but] nothing can replace the dynamic, interactive experience that a good brick-and-mortar store can provide,” says Collum.
The majority of shoppers still want to see or try out an item before buying it. That’s been a key incentive for online retailers to open showrooms.
Men’s clothier Bonobos has “guideshops,” where customers can try on clothes before ordering online. Casper opened a series of pop-up showrooms where shoppers can test its mattresses with a 30-minute nap. And Bauer Hockey’s retail stores let people test the merchandise on indoor ice rinks.
Collum says that strategies like these go beyond the try-before-buy model by letting the customer experience the product in the context of how they’ll ultimately use it. They also reduce returns due to poor fit or dissatisfaction, which can make it difficult for pure-play online retailers to operate profitably.
Physical stores allow brands to engage customers in ways they just can’t online.
At Converse’s Blank Canvas workshop, customers work with an on-staff designer to create a customized pair of Chuck Taylors.
Frank & Oak demonstrates its brand value of community by dedicating part of its stores’ selling space to a cafe, barbershop and lounge area.
Lululemon hosts complimentary yoga classes led by local instructors.
Experiential elements like these let brands meet customers’ needs in ways that stay true to the brand’s values and overall personality.
“Stores are great branding opportunities, allowing a retailer to share stories in a variety of ways and providing an opportunity for shoppers to create memories and share experiences of their very own,” Johns says.
The future of physical retail
Consumers increasingly demand seamless, multichannel shopping experiences, and a compelling brick-and-mortar retail experience can give savvy online retailers a competitive edge, Johns says.
“I think there’s little doubt that the industry will continue to see a steady movement of retailers, brands and completely new concepts growing into complementary and supporting physical retail channels,” Johns says. “Shoppers are in control of the shopping experience, and they are the ones dictating change.”