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Why the Biggest Online Retailers are Opening Bricks & Mortar Stores

From Clicks to Bricks Why the Biggest Online Retailers are OPENING BRICKS & MORTAR STORES In traditional retail lore-a company opens a store, expands its footprint to the Web and then works to integrate its online and in-store sales, but for some retailers, the opposite approach is more enticing. WHY GO FROM CLICK TO BRICK? of consumers prefer to shop in-store and they spend 6 times more in-store of retail sales are conducted in 78% 94% brick-and-mortar stores, while just 6% online. Physical stores are simply good business. than online. Occur 3 PRIMARY REASONS Multisensory Consumer Experiences 73% of consumers want to try on or touch merchandise before they make a purchase. Physical shopping centers allow consumers to do just this – interact with a range of products to make informed decisions about what they're buying. Better Logistics and Consumer Service Offerings Online retailers are using bricks and mortar stores as storage and shipping centers to improve the efficiency of their business. Bricks and mortar stores help these once pure online retailers reduce shipping times and costs – a benefit to both consumers and bottom lines. Strong, Lasting Brand Relationships As we move from an age of transaction-based retailing to one of relationship-based retailing, companies need to focus on connecting and establishing a relationship with their customers like never before. Physical stores are an avenue to meaningfully engage customers and build strong, lasting relationships. THE BIG COMPANIES FINDING SUCCESS WITH BRICKS & MORTAR STORES 1 APPLE Background O The Apple Online Store was opened in 1997 and carried all of Apple's product lines. O Steve Jobs, the former Apple CEO, believed the Apple retail program needed to fundamentally change the relationship with the customer, and decided that opening retail stores was an important part of that. Opening Bricks & Mortar Stores 7,700 444 In 2001, Apple opened the first official Apple Retail Stores in Virginia and California. More than 7,700 people visited Apple's first two stores in the opening weekend, spending a total of US$599,000. There are now 444 Apple Retail Stores worldwide. Key Observation I don't think we would have been nearly as successful with iPad if it weren't for our stores. It gives Apple an incredible competitive advantage. Others have found out it's not so easy to replicate. We're going to continue to invest like crazy. The average store last year was over 50 million in revenue. Tim Cook Apple CEO GOOGLE 2 Background Google O Everyone is familiar with Google's online presence and is aware that they are generally associated with all things online. O Their products typically include anything from online advertising technologies, to search, and to software. Opening Bricks & Mortar Stores Google had long been rumored to be entering the physical retail space to bridge the physical and digital divide. They eventually opened their first store in London in March 2015, in an effort to get closer to their Google is aware that many potential customers need to get hands-on experience with their products before they are willing to purchase. customers. Key Observation The pace of innovation of the devices we all use is incredible, yet the way we buy them has remained the same for years. With the Google shop, we want to offer people a place where they can play, experiment and learn about all of what Google has to offer. James Elias The UK Marketing Director for Google 3 FRANK & OAK Background A FRANK & OAK O Frank & Oak was originally an online menswear brand providing men with a personalized shopping experience. O The men's retailer has gained global attention through near-perfect physical and digital integration. Opening Bricks & Mortar Stores In 2013, the retailer opened its first In March 2015, the retailer announced plans to open 6 bricks & mortar stores and the company is launching a campaign that will allow customers to vote on which In November 2015, Frank & Oak opened its newest flagship store in Washington D.C. retail location in Montreal. While at the store, shoppers have the opportunity to meet with style advisors-and even get a haircut. markets they'd like Frank & Oak to open the stores. Key Observation A lot of people see Internet as next-generation and brick-and-mortar as being traditional. The way we see it is as a physical space that we can leverage to communicate our brand value. Ethan Song Frank & Oak's founder Background RENT THE RUNWAY 4 O Originally, Rent the Runway provided designer dress and accessory rentals online and it was a purely e-commerce company. O The business allows customers to rent designer dresses and accessories for a fraction of what they would cost to buy. RENTTHERUNWAY Opening Bricks & Mortar Stores In 2014, Rent the Runway opened its The location has proven to be a positive At the store, visitors are able to reserve step forward in converting browsers into buyers, as it eased shoppers' fears that an item wouldn't fit or show up on time. first store in New York City's Flatiron district. rentals for future events, or take items with them that day and even avail of tailoring services. Key Observation After we heard enough requests for a physical store, we were like, 'Let's test it out. Jennifer Fleiss Found of Rent the Runway 5 BAUBLEBAR Background BAUBLEBAR the final szy in fashion jercelry O BaubleBar specializes in inexpensive fashion jewelry. O Although the business started out online, co-founder Amy Jain said she and co-founder Daniella Yacobovsky set their sights on bricks and mortar stores from day one. Opening Bricks & Mortar Stores Baublebar opened their first store in Long Island, New York this summer. The company has been testing offline sales since its inception with both pop-ups and partnerships with its target customers' favorite fashion chains. The basket size and order size at bricks-and-mortar stores is about 3 times what it is online. Key Observation We've always believed that an offline presence was key to building a brand. Men and women touch and feel our product and they immediately understand what BaubleBar is about. Amy Jain BaubleBar Co-Founder WARBY PARKER 6 Background O Warby Parker began as an online-only retailer in 2010, specializing in fashion forward eyewear. O Shortly after launching, the company was featured on Vogue.com and in GQ, which called it "the Netflix of eyewear". WARBY PARKER eyewear Opening Bricks & Mortar Stores The eyewear brand now operates 8 independent stores and 8 showrooms across the U.S. Warby Parker's showrooms are operated within boutiques in cities such as Miami and Chicago, while the brand has standalone locations in New York Co-founder Dave Gilboa said the company is exploring options for stores in other cities. City, Los Angeles and Boston. Key Observation Having physical stores is another way we can bring customers into the world of Warby Parker-both existing customers and people who happen to walk past the store without having encountered us before. Neil Blumenthal Warby Parker Co-founder SMS storetraffic.com www.storetraffic.com References www.forbes.com/sites/fionabriggs/2015/08/11/shift-of-online-brands-to-bricks-mortar-stores-set-to-create-omni-channel-experience-for-malls/ www.entrepreneur.com/article/237876 www.entrepreneur.com/article/244760 www.telegraph.co.uk/technology/google/11462726/Google-opens-first-ever-Google-Shop-in-London. html techcrunch.com/2014/10/31/why-online-retailers-continue-to-open-brick-and-mortar-stores/ www.cnbc.com/2014/04/11/online-retailers-betting-on-physical-stores.html www.wired.com/2014/11/ebays-plan-reinvent-retail-shopping-magic-mirrors/ www.marketplace.org/topics/business/online-retailer-athleta-goes-brick-and-mortar www.kramerdesigngroup.com/news/?id%3=187 9to5mac.com/2013/02/12/cook-apple-stores-arent-just-stores-they-are-gathering-places-entertainment-venues-and-prozac/ www.canadapost.ca/web/en/blogs/business/details.page?article=2015/10/21/how_startup_frank_an&cattype=business&cat=shipping

Why the Biggest Online Retailers are Opening Bricks & Mortar Stores

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why many online retailers are opening bricks and mortar stores.? Online companies like Google and Apple have started opening bricks and mortar stores around the world. They eventually saw it as an im...

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