Direct-to-consumer companies are increasingly eyeing physical stores to give loyal customers a more “tangible” experience with the brand while also wooing potential consumers with something new and fresh.
Valerie Pettine, vice president of brokerage services at Metro Commercial, discusses what’s driving DTC to open stores and what brands need to consider in opening up physical venues.
WWD: Why should DTC digital brands consider having a brick-and-mortar presence? What are the benefits?
Valerie Pettine: There are many compelling reasons why DTC brands are opening brick-and-mortar stores. The biggest reason why we are seeing the growing trend is that brick-and-mortar stores provide brand and product awareness that is leading to a noticeable increase in overall sales. For companies such as Away and Casper, they see a surge in online sales in markets where they open a tangible location.
Additionally, it helps companies provide a more satisfying customer experience by giving them more avenues for where they can buy the product and allowing them to touch and feel the product, therefore gaining more confidence and trust. Having a brick-and-mortar presence also gives companies a better understanding of their customers; it will show them where their loyalty stands in comparison to other competitors, what their customers value, and what customers they may be missing out on currently.
WWD: Are there challenges? What do brands need to consider?
V.P.: For a DTC only brand, opening a brick-and-mortar is a whole different animal. The DTC model allows for a low-cost way to work closely with customers and having a physical presence can be a costly process involving staffing, inventory and commercial space that those companies aren’t familiar with.
There is much more planning and coordination involved in opening a brick-and-mortar location and companies need to beware of expanding too quickly, maintaining a quality product, and focusing on understanding their numbers.
WWD: How does having a physical store inform your brand’s online business and vice versa?
V.P.: A physical store gives customers a tangible experience where they can connect with the product and will give them the confidence to buy the product that ultimately may happen online. The physical store draws the attention of a customer who may not have known about the brand previously and lead him/her to do further research online.
Having both channels gives the customer the power — they can shop in-store and get the instant gratification, or they can have the ease of purchasing the product on their phone.
WWD: What else do companies need to consider in building an online and physical store business?
V.P.: The most successful companies are the ones that can evolve with both their online and physical stores. Opening a physical store will provide a deeper understanding of the customer, but this data needs to be taken into consideration and inform the brand. Brands need to see the overlap between the online and physical store customers and figure out how these strategies may vary.
Ultimately, the brand must be consistent through each channel and maintain a quality product.
For more WWD business news, see:
Why Venture Capital Is Not for All Entrepreneurs
H&M, Coach Top List of Most Searched ‘Recycling’ Fashion Brands
A Career Path That Winds From Fashion Brands to Amazon to Microsoft