Online Retailers Shift To Brick-and-Mortar

Retail today is rapidly changing and evolving. Technology has transformed consumers’ preferences and behaviors, as well the tactics retailers use to effectively capture consumers. Communication of brand is key for retailers today in the pursuit of creating a loyal customer base. Many of the leading consumer brands today had their start online. This strategy has allowed them to disrupt the traditional, capital intensive brick-and-mortar retail models. By operating under a direct-to-consumer model, brands are able to retain control of brand communication and distribution, while yielding higher profit margins.

Over the recent years, technology and e-commerce have hurt the physical retail store channel. However, one major trend we see is the expansion of many retailers who had their start as direct-to-consumer, online only businesses migrate in to the physical store realm. A significant example was Amazon’s 2017 acquisition of Whole Foods, which provided Amazon with a significant bricks-and-mortar presence in the US. Other popular retail brands have followed that trends such as; Warby Parker, Allbirds, Bonobos, and Casper Inc. All of the brands mentioned began solely as online businesses with great success, are heavily investing in to the physical space. The value in expanding in to the physical space is retailers can offer customers an “experience” they wouldn’t be able to provide otherwise. Retailers are able to create more “touch points” with the consumer and integrate them in to their network, making a more seamless experience for buyers and stronger brand loyalty.

How consumers interact with goods will continue to evolve. Technology will continue to influence how we see and desire the consumption of goods. That being said, the fact that many of the leading online retailers are pursing what is considered a dying channel in retail shows there is still value in it. There is something to be said about being able to touch and feel tangible goods. In a more hyper connected world, the longing for human experience has become novelty. As quoted by Neil Blumenthal, the founder of Warby Parker, “I don’t think retail is dead. Mediocre retail experiences are dead.”