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From clicks to bricks: why some e-tailers now want actual storefronts

Posting in Technology

Maybe Apple has been on to something. Its stores have been a raging success, along with its commanding online presence. Consumers seem to crave, more than ever, an in-person shopping experience.

The past decade has seen a non-stop discussion about the rise of online and virtual channels that are replacing physical storefronts. Now, it seems some e-tailers are getting into having a physical presence as well.

As documented by The New York Times' Stephanie Clifford, there is merit to having stores that customers can actually visit, to partake in a shopping experience, and feel and touch merchandise. Bonobos, for example, is an online apparel retailer that has recently opened six new stores to complement the channel.  In fact, Bonobos CEO and co-founder Andy Dunn was known for previous statements that the Internet channel was the only way to go.

Now, he says there is a need for a physical presence as well. As Clifford reports: “'I was pretty puritanical about e-commerce only,' he said, but found that about half of would-be customers would not order apparel online because they wanted to feel the merchandise."

Bonobos isn't the only e-tailer having a change of heart -- other large e-commerce operatives are also adding bricks and mortar to their channel strategies:

"After years of criticizing physical stores as relics, even e-commerce zealots are acknowledging there is something to a bricks-and-mortar location. EBay and Etsy are testing temporary stores, while Piperlime, the Gap Inc. unit that was online-only for six years, opened a SoHo store this fall. Bonobos plans to keep opening stores, and Warby Parker, the eyeglass brand, will soon open a physical location."

The appeal is that many customers see shopping as a social experience, and want to touch and feel the merchandise before they make a decision. As many established retailers are beginning to understand as well, the online and physical storefront channels complement and interact with one another as well. Customers view the inventory online to make a selection, then go to the store to actually pick up the merchandise. Or, they browse the store for ideas and then make the purchase online. Often, it's very helpful to be able to speak directly with a salesperson.

This is a dynamic not lost on Apple, which could have easily amassed huge sales through its websites and telecom partners alone. The Apple stores reportedly generate more than $6,000 a square foot, more than double the number-two contender, Tiffany & Co. More than simply selling products, the Apple stores serve to reinforce the brand.

In Bonobos' case, there is additional profit to be made in stores. "The average in-store transaction was $360, double what it is online, and first-time store visitors buy again in 58 days, versus waiting 85 days between Web site purchases," according to the NYT report. Dunn also said he "has cut Web marketing expenses in half as in-store purchases have increased."

(Photo: Joe McKendrick.)

— By on December 19, 2012, 1:15 AM PST

Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure