The latest thing in retail: offline shopping


The latest thing in retail: offline shopping

By Adam Lawrenson
Executive Creative Director

Retail is dead, they say. Yet direct-to-consumer brands that disrupted the retail model—like Made, Away and Everlane—are all opening shops. And it’s working. What’s going on?

Commentators suggest that stores need to offer ‘an experience’. But that misses the big picture.

For example, take a look at the raft of modern DTC (direct-to-consumer) brands and an inconvenient fact emerges. These brands—that disrupted the retail model, and get bought with billion dollar valuations—are opening shops, running 30” spots, and putting up 48-sheet posters (not that they know why they’re called 48-sheet posters).

When brands like Warby Parker, Casper and Away emerged—cutting out retailers to provide cheaper, better products—it was easy to acquire customers via Facebook and Google, as long as the price in their category was rigged and the entrant brand could target a bullseye audience.

Wherever these digital-first brands open physical stores, online sales in that location go up.

But as these markets have matured, competitors have emerged. Forcing up the price of acquiring and retaining customers. Squeezing the model. So, to continue to expand, the ‘digital-first’ brand has to enter the traditional bricks-and-mortar space.

These digital-first brands have designed retail experiences where .com isn’t a different channel to the store. For them, the customer is the channel.

The irony is that wherever these digital-first brands open physical stores, online sales in that location go up. As CEO of Away Steph Korey commented after opening her 4th store, in Soho Manhattan, “it’s almost like opening a profitable billboard”.

But for high street brands that are struggling it’s a double kick in the teeth. It shows that turning stores into entertaining places for people to experience their brand—rather than inefficiently purchase products—isn’t enough. They must also re-engineer their system so that ‘online’ and ‘offline’ work as a single ecosystem for reaching and converting customers. Retailers with ‘store’ and ‘.com’ departments that are anything less than seamless have made a rod for their own backs. The customer is the channel.

The problem, as I see it, is that the more enlightened legacy brands will rush to copy what digital-first brands are doing with their stores—only to realise that the hard work is still to come. Because if they really want to survive, they will have to stop treating online and offline as separate channels, and start understanding how to pull a lever in one to drive value in the other.

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