During the Big Show from the National Retail Federation, many online companies showed that they are beginning to consider having a Physical Presence of some sort and the value that this could bring. There is a growing awareness that while online-only stores can work, they do have their limitations.

Casper as an Example

One example of this is Casper. Casper is getting ready to complete an initial public offering. In the first nine months of 2019, it had a revenue increase of 20 percent from the previous year (up to $312.3 million). It also had a 4.9 percent increase in losses (up to $67.4 billion). The figures released by Casper before the offering also indicate that it spent $423 million for marketing between 2016 and 2019.

Most of the sales by Casper are made online. It has 60 stores of its own and also sells via retailers. Casper, however, no longer feels that this is enough of a Physical presence and will be opening more than 200 locations across North America.

Omnichannel Is Crucial

The relevant panel at the Big Show discussed the importance of omnichannel as well. Shamin Rostami Walsh, the managing director for BAM Ventures, a fund that is early-stage and consumer-focused, indicated that not every brand will need to have its store that is branded to its needs. However, they should at least consider retail partnerships or pop-up stores to take advantage of those omnichannel offerings. By offering even temporary pop-ups, companies can reduce the costs for customer acquisition.

The Stitch Fix chief operating officer, Mike Smith, also stressed the importance of a physical channel for most brands. He was clear that this is not the case for all companies, as Stitch Fix tested a pop-up and determined it was not right for them.

Physical Stores Also Boost Marketing

Others in the industry have indicated that another reason to include a physical store experience is the various marketing opportunities there. It is just not possible yet to try on clothing online or from the comfort of your home, leaving this to physical stores. Additionally, physical stores can be specifically designed in a way that encourages people to buy items and includes marketing. It is also merely a challenge to recreate the entire customer experience online.

This shift where online-only stores must consider at least some physical presence is particularly interesting given the number of brick and mortar stores that are shifting online and the increase in online shopping.

Source:

https://www.retaildive.com/news/e-commerce-companies-eye-physical-retail/570383/

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