Drop in a profit of retail, closure of stores, the emptiness of the malls are proclaimed that the internet is taking down another industry yet. In contrast with the past, Brick and mortar stores are appearing in the yellow pages. Recently, the Census Bureau delivered a data report showing that online retail sales surged 15.2 percent between the first quarter of 2015 and the first quarter of 2016. The data report shows that only 0.8 percent of retail sales transformed from offline to online between the beginning of 2015 and 2016.
In the past decade, some online companies in the US have announced its physical existence to better market their products, increase online traffic and sales, and forge closer customer relations. At the same time, Amazon includes specialty and clothing stores like Casper Warby, Birchbox, Parker, and Bonobos.
This movement also shines back the broader industry essentials over the multi-channel retailing, where Retailers’ prime focus was just to provide the products to their customers with a seamless experience be it online shopping through a desktop or at a traditional retail store.
For an instance, Macy’s and Nordstrom, invest an estimated $6.4m and $4m in paid search records for the highest thousand attire related keywords in the first quarter of 2015, as per the study from L2 Inc, a research firm, tracks digital brands.
As per the L2 report, Clicking on an online site is not appropriate to the highest-placed search ads, with little room for differentiation. Which ultimately means, the ads which have been running for a long time, have high rankings, and a high impression share in highly competitive markets. The report describes “evolved retailers”, online merchants that have opened brick and mortar storefronts.
What was the reason to do this? Actually, they want to create awareness among the customers and make them safe in the area of retail marketing. Also, for its vendors and personal products like jewelry, clothing, and eyewear selling the material as per the request of their customers’ needs.
Many of the offline forays have come up with a trail attempt shop just before announcing their new innovative stores especially in high-profile shopping areas such as SoHo neighborhood in New York, Michigan Avenue in Chicago. And, as per the response they have enlarged their stores rapidly.
“The big benefit of the flagship stores is that they’re terrific marketing vehicles,” opined Jason Goldberg, who is the Senior Vice-President of Commerce and Content at digital agency Razorfish. “Not only do those stores tend to be economically successful on their own but they generate a huge lift in incremental shopping to the online store.”
Even talking about Warby Parker, they have built a popular brand by selling fashionable, elegant eyewear frames for just under $100. In 2010, three years later, they have started their online flagship Soho and today, the company has twenty stores countrywide, also aiming to plan twenty more to add in this year.
Dave Gilboa, Co-founder and Co-chief Executive of Warby Parker stated the company stores which have been open at least two years are already profitable. “We also see a halo effect where stores themselves become a great generator of awareness for our brand and drive a lot of traffic to our website, as well and accelerate our e-commerce sales,” he further added.
At the same time, other e-tailers have started their showrooms which are emphasized on the basic essentials. This technique enables customers to size and sample products while lessening real estate and other traditional retail value. Bonobos, one of the best-known brands for menswear, adopts this technique, and its 20 other stores allow its customers try on clothing while orders are available online with the home delivery option. Also, one point because men agreed with it, while shopping at the store they were unnecessary compelled by the shopping bags.
“This supported our idea of using Bonobos.com as the place to fulfill orders, so we didn’t have to worry about stocking inventory in a location and we could focus more on the customer experience,” stated Erin Ersenkal, Bonobos’ Chief Revenue Officer.
And the result was Bonobos’ stores gained twice profit just because of its online approach.
Likewise, Blue Nile, a jewelry e-tailer, has opened its first standalone outpost in the Roosevelt Field mall on Long Island. As per Harvey Kanter, CEO of Blue Nile, Consumers are denying to buy online just because they are not being able to see and touch and feel the product.
As compared with other e-retailers categories, jewelry still has less penetration online, stated Kanter. Venturing offline is a way to motivate the vendors for its higher growth. Since June, Blue Nile has seen a rise in traffic and sales in the area around its first Long Island location. Now, they plan to open their other three to four Webrooms in this year.
However, Claude de Jocas, research shows on the L2 study, stated the advantages of economies of scale could result into some more locations added. “Some are also beefing up their physical retail teams with senior-level hires, suggesting aggressive expansion plans are in the works,” she added.
If talking about Amazon bookstore, this is linked to its site closely. In Amazon books there is a list of titles displayed if the customer wishes to select books in a particular field. These books are detailed with the users’ reviews and ratings. Each and every book is displayed face-out with a barcode to look at the price using its app. Also, the outlet allows people test drive its devices such as the Kindle e-reader and Fire tablets.
Today, Retail is evolving with great products and services. In other words, flexibility is the key by which retailers can follow their customers and improve their products as per their requirements. In coming decades, let see how the shopping and buying experience will changed in each retail category.