Clicks to Bricks: Why Do Online Retailers Go Physical?

There is recent phenomenon which is sometimes called “clicks to bricks”. In other words: online retailers building physical stores. A report by Jones Lang LaSalle points that digitally native brands such as Casper, Adore Me and Allbirds are about to open 850 new “physical” stores over the next five years. Even Amazon, the ecommerce king, has started initiatives such as Amazon Go (a chain of physical grocery stores). Let’s explore some of the reasons behind that fascinating trend.

Added Trust

Whether setting up a permanent store, pop-up or short-term space, some experts agree that having a brick-and-mortar presence can strengthen the trust between brands and consumers. “Pretty much anybody can sell something online these days, but to have a physical location, there is definitely a brand legitimacy in that,” says Jill Dvorak, Senior Director for Digital Retail at the National Retail Federation in Washington, D.C. “It gives the sense to the consumer that the business is going to be in it for the long haul.”

Go to the Mall, Buy Online

At Century City, an open-air mall in Los Angeles with a new billion-dollar makeover, tenants include the likes of Bonobos, an apparel store recently acquired by Walmart, Untuckit, which sells casual men’s shirts, Warby Parker (eyewear), and Amazon Books. Some of these stores which were born online, like Bonobos, don’t have inventory that shoppers can purchase and take out of the store. Instead, shoppers place orders that are filled at a fulfillment centre and then shipped to their home. It may become common to leave a shopping centre without one bag to take to your car, with malls building awareness around brands rather than generating monetary transactions onsite.

A Deeper Brand Experience

By moving offline, online retailers can create a deeper, more immersive brand experience. Showrooms and concept stores are places where customers can be immersed in the brand culture. Physical facilities can also be utilized as event venues where fans and influencers can directly interact with the brand. In-store atmosphere can be a key differentiator for online retailers, and way to create lasting impressions (as well as returning customers).

You need experiential locations, where you can talk to staff and community as well,” says retail influencer Bruce Winder. “You [also] have to have a strong digital footprint so folks can learn about the brand and interact with the brand.

Affordable Market Research

In 2015, after 13 years of selling clothes online, fashion retailer ModCloth opened its first physical store. “We discovered small things, the details our customers love,” stated Matt Kaness,​ president and CEO at ModCloth, to USA Today. “They loved linings in dresses and skirts, and they loved pockets.” Data collected from an e-commerce store can be useful to understand customers, yet retailers can also learn about their customers just by watching them shop and interact with the space and products. “From a market research standpoint, [a store] pays for itself. The amount of market research you gain just by observing people, it’s the equivalent of 100 focus groups,” says Sucharita Mulpuru, Senior Analyst with Forrester Research.

As the retail sector continues to evolve, the lines between online and offline will become even blurrier… in a good way that is.

By Phil Siarri