E-commerce companies turning to physical sites
Such moves help customers discover online brands
In recent years, a rash of e-commerce companies from Warby Parker to Bonobos have opened stores.
Three key forces are driving this trend. Malls, keen to find new tenants as struggling traditional retailers close stores, see online merchants as potential traffic drivers. E-commerce companies have discovered that a physical location helps consumers discover their brand.
Traditional retailers, meanwhile, are buying or partnering with online merchants and opening boutiques inside their stores.
“All these slick e-commerce startups have realized, ‘What a great way to get customers,'?” said Howard Tubin, a New York-based retail analyst. “Open a store, let people touch and feel and try on your product, and then convert them to e-commerce.”
Bonobos, an online purveyor of menswear, is in Nordstrom locations and has opened 20 stand-alone stores around the United States. Bonobos can reach older customers and women shopping for men. Nordstrom pulls in younger shoppers who know Bonobos.
“Thousands and thousands of customers have discovered us through Nordstrom,” said Bonobos CEO Andy Dunn. “It's been a huge stage in the brand evolution. We view it as a way to reach a much more diverse audience much more quickly.”
Last summer Birchbox, an online cosmetics seller, opened seven pop-ups in Gap stores across the United States. Gap was “interested in seeing the interplay between beauty and fashion, learning how to talk to a new audience or their audience in a different way, “ said Birchbox CEO Katia Beauchamp. Her company, meanwhile, got access to a wider range of customers.
In November, Amazon launched a bookstore in Seattle. Besides books, the location gives pride of place to Amazon gadgets such as the voice-activated Echo speaker and Fire TV streaming device — a clear attempt to give shoppers a chance to play with them before buying.
“This is a consumer electronics store housed in bookstore clothing,” said Michael Pachter, a Wedbush Securities analyst. “One of the reasons people think Best Buy will be around forever is because most people are too stupid or too scared to buy electronics without first seeing them.”
Amazon declined to comment on plans to open more stores.
In remarks to analysts on Tuesday, Sandeed Mathrani, CEO of mall operator General Growth Properties, said the likes of Amazon, Bonobos, Birchbox and Warby Parker were coming to appreciate the benefits of bricks and mortar because it's an effective way to get goods to shoppers.