Online retail has become extremely competitive. The gaps are filled, the niches are plugged, and there's a compelling brand catering for every market segment under the sun. Opportunities to really mean something to our customers are disappearing fast.
A few years ago, being online and having a fast-growing Instagram was enough to drive market share away from main street and into our e-commerce stores — but the amount of brands selling online is reaching such a high number that getting noticed is becoming harder and harder.
Moving into physical retail must be your next move.
The Return Of Retail
The strategy worked, and many have become multibillion-dollar companies. But, believe it or not, the most vexing problem keeping every DTC entrepreneur awake at night is finding customers. As DTC startups have proliferated in every category imaginable, the costs of marketing via Facebook and Google have risen exponentially. I’ve met with e-commerce brands who are currently spending hundreds of dollars on advertising to make a single sale, and the situation is only likely to worsen. As a consequence of sky-high customer acquisition costs, astronomical retail rents that are out of the range of most businesses now look too good to pass up for venture-backed startups with cash to throw around. The industry leaders have decided to do something that was totally unimaginable just a few years ago: They're opening physical stores at the exact moment retailers, both large and small, are struggling to survive.
The Power Of In-Store Experiences.
Today’s generation of customers is much more interested in experiences than objects. The power of experience is unstoppable and it will also allow you to differentiate your brand from your competitors. A physical space is much easier to individualize than a webpage — it’s not a list of items on a screen, it's a room with its own wallpaper, layout and even scent. As well as this, physical spaces have the potential to do a lot more than a static webpage. They can hold openings, VIP nights, classes and even live music — and these are only a few ideas. You need to transform the boring classical retail space into a Coachella. If you need real-world examples, look no further than some of the world’s most successful brands and what it is like to enter their stores. As well as seeing their products online, you want to tour the original Dr. Martens factory with a virtual reality system by Oculus in the Camden flagship in London, try on Nike sneakers and test them out on the court or on a simulated run at the brand's SoHo store in New York City, and create your own video in the Warby Parker Green Room on Melrose Avenue in Los Angeles. I believe that stores today are more brand activation points than places where you go to buy a product. They have the potential to be a lot more than what they were for the past 100 years, and I believe the current crisis will force this change.
A brand with a solid online backbone doesn’t even have to sell anything in its physical space. Customers can be saved the hassle of actually purchasing products in-store, being able to buy them instead from the comfort of their sofa and have them delivered in a day, if not hours. This is the best of both worlds — the unique experience of your brand and the convenience of online retail put together. Two quintessential examples: Tesla showrooms feature just one or two core luxury products and one or two highly knowledgeable salespeople — but I find it’s an amazing experience simply walking in. Warby Parker's online retail store worked well for them for a while, but then it became clear that customers wanted to try on and to feel the glasses on their faces, so they opened physical locations. The physical world is still the world that we live in, go to work in, eat dinner in and fall in love in — it's important. It is our experience of the world — and it is the experience of a brand that will have your customers coming back. Based on what we've learned from working with a large variety of clients, spaces need to be extremely well-designed to work and attract customers. A beautifully designed space will last much longer than a warehouse space, it will retain customers for a longer time, and most of all, it will function as a brand activation in a way online advertising cannot. In my experience, people tend to remember physical experiences much more than the digital ones, partly because all senses — especially smell — are involved. My suggestion to retailers is to think hard about the one message they want to convey to their customers and then create a space that will transmit that message in the best possible way. The digital space is there for convenience. The physical space is there for the experience. As a business owner, your duty is, above all, to bring value to the customer in new ways. Yes, the internet will always beat retail in cost-efficiency, but it will never measure up to the rich, real-life experience of being in a physical store. If you’re crushing it on Instagram with a great aesthetic and follower count, then physical retail must be where you’re headed next. In my opinion, designing experiences — rather than huge warehouse stores with hundreds of products — will not only be much more fulfilling for you and your customers, it will improve your foot traffic, online sales and overall retail revenue. Bring your online brand to life.
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