True innovation
These Online Stores are Getting Physical
Free Enterprise Staff | September 20, 2016

While it’s no secret that most traditional retail stores are looking to expand their online presence, a select group of formerly e-commerce-only companies are moving in the opposite direction by opening physical stores.

While it may seem counterintuitive for online companies to seek out physical spaces, the move can actually prove incredibly beneficial for their bottom lines, according to a recent report by management consulting firm A.T. Kearney. The study found that physical stores play a contributing role in online purchases, giving customers a chance to touch and feel a company’s products and immerse themselves in the brand experience before making a purchase. Additionally, two-thirds of consumers who purchase goods online visit a physical store before or after the transaction, according to the report.

Here’s a closer look at five of the online retailers that are responding to those trends by establishing a brick-and-mortar presence.

Warby Parker

Warby Parker founder Neil Blumenthal has a clear vision for his company’s future. The business got its start selling hip eyewear online, but has since opened 36 retail locations across the country. The company, which launched its flagship store in New York City in 2013, has also expanded internationally. The first Warby Parker store in Toronto opened in August 2016.

The decision to pursue brick-and-mortar retail may seem unorthodox for a company that made its name with a no-fuss online order system. However, Blumenthal has said having a physical presence ultimately serves customers better.

“We believe the future of retail sits at the intersection of e-commerce and brick and mortar,” Blumenthal explained to The Guardian. “The two experiences should be seamlessly integrated and complementary. The ultimate goal for each shopping experience is the same: to make the process of buying glasses as easy and fun as possible.”

Related: THE SHOPPING MALL IS HAVING A RENAISSANCE

Birchbox

Birchbox, a lifestyle subscription company, is eager to reinvent the way consumers discover and buy beauty products. The New York-based business initially attracted attention for its unique approach to product discovery. The company used an online survey that asked questions about consumers’ age, style and skin type to get a sense of the type of beauty products they might like, and then shipped samples of those products to their front doors. In recent years, the brand has taken its innovative approach to the physical retail world, taking on established beauty companies such as Sephora in the process.

Customers who walk into the Birchbox store in the Manhattan neighborhood of Soho see traditional features such as display cases and staff members walking the floor to help customers, but they’ll also find in-store tablets that contain Birchbox’s signature product-matchmaking service.

Co-founder Katia Beauchamp hasn’t said whether or not the company will open more stores . She did tell the New York Times, however, that moving into physical retail allowed the company to expand its brand. While many customers used to simply try the samples they got in the mail and go buy the full-size products at physical stores, having a Birchbox store allows customers to discover and buy products in the same place.

“We want that message to be clearer to consumers,” Beauchamp said. “You’re supposed to discover what you love and then act on that.”

Nasty Gal

Since its launch in 2006, the online clothing retailer has made a fashionable name for itself with trendy pieces for young women. What started out as a small business that sold vintage items on eBay is now a multi-million dollar business with customers in more than 60 countries, not to mention its own fashion line.

Founder Sophie Amoruso explained that retail expansion seemed like a “natural next step” for the brand. The company launched its first brick-and-mortar store in Los Angeles in 2014 and has since opened a second location in Melrose. The move allowed the company to curate a better shopping experience than what is typically available online by offering in-person help , she explained.

“Our store is really about a curated experience that combines the best of what we’re designing with the best vintage and the best of other brands,” company founder Amoruso explained to the LA Times. “And each of our muses, which is what we call our salespeople, is armed with an iPad mini, so for the most part, people can check out from anywhere…. The service is wherever you are, rather than ‘Help yourself. We’ll be here behind the counter.'”

Fabletics

Athletic apparel website Fabletics – co-founded in 2013 by Kate Hudson – has gained much attention for offering stylish and high-quality luxury athletic gear at affordable prices for women. Spinning off of that success, the brand also recently announced a second line, named FL2, which sells high-performance athletic wear for men.

The e-tailer – which initially ran its sales on a monthly subscription model for its customers – opened five brick and mortar stores last fall, and two more this past spring. The company aims to open 75 to 100 stores within the next three years.

Fabletics, a subsidiary of billion-dollar fashion e-tailer, JustFab, plans to test and develop its brick and mortar strategy, keeping in mind its rapid success online. “We want to completely mirror the stores to the online experience,” JustFab co-founder and co-CEO Adam Goldenberg told Forbes. The stores will not only allow shoppers to try on actual Fabletics apparel, but also give staffers an opportunity to recruit customers to join the online subscription service, which offers benefits such as discounts.

Amazon

The e-commerce site opened its first physical bookstore last year in Seattle. Since then, the world’s largest online retailer has expanded to a handful of pop-up shops across the country and industry insiders say the company plans to open hundreds of stores in shopping malls over the coming years.

Amazon’s brick-and-mortar ambitions have raised eyebrows, given that the company has been blamed for pushing independent bookstores and publishers out of business with its ultra-low prices. Still, those who tracked the company’s moves closely weren’t totally shocked by the announcement. Founder Jeff Bezos hinted at possible physical locations in 2012 stating that he would “love to” open a physical store if he could find a way that was “unique.”

While the founder has stayed largely mum over expansion plans, industry experts have had no problem opening up about what they believe the move means for the company. Jenn Risko, co-founder of the industry newsletter Shelf Awareness, believes Amazon’s retail stores are a way for it to attract consumers who enjoy browsing in physical bookstores—a market from which it has been excluded over the years.

“If you think about the fact that Amazon publishes lots of books, it’s virtually impossible for them to get them on any shelves whatsoever. Both the independent bookstores and Barnes & Noble bound together and said, ‘We will not carry the Amazon-published books.’”