Clicks to Bricks
The Sunday ZEITGUIDE
April 14th, 2019
Online Brands: Coming to a Store Near You
More and more online brands are opening physical retail locations. Now shopping centers, department stores, legacy retailers and marketplaces that deal exclusively in digital brands are all racing to be the go-to place where you can fondle the merchandise in person.
Mortar and Bricks to Get More Clicks
—The billionaire’s playground that is Hudson Yards prominently features retail spaces for brands born online, including shoemaker M.Gemi, sock retailer Stance, men’s athletic apparel company Rhone, beverage brand Dirty Lemon and men’s underwear brand Mack Weldon. These traditional stores also act as showrooms, driving up online sales. “The statistic is in the markets where you have physical retail, the [e-commerce] business in that market increases by about 30 percent,” says Mack Weldon founder and CEO Brian Berger.
—Last year Macy’s bought Story, which operated a retail space for temporary brand installations with exclusive products and elevated shopping experiences in lower Manhattan. Now Story founder Rachel Shechtman is Macy’s brand experience officer, helping the company to create themed spaces inside 36 of its locations that carry a limited inventory of oh-so-cool products curated around a narrative. The Story-within-the-store are a part of Macy’s strategy to keep pace with the kids—by giving smaller online brands some good-looking shelf space, the company hopes to remain relevant while other retail giants go extinct. CEO Jeff Gennette said he wants to give Macy’s customers “a fresh reason to visit” the department stores.
—Competing with the legacy heavyweights are new retail marketplaces that exclusively feature brands that built their customer base online. For example, Showfields in Manhattan, b8ta in Hudson Yards, and Bulletin in Brooklyn (which focuses on women-led brands), have a pay-to-play model, charging a company like Quip a fee to be featured. The idea is going national: see Neighborhood Goods in Plano, Texas. These outlets not only drive sales, they sign up new members and provide data, helping brands identify who their customers are and what they want to buy.
The Must-Have Conversation
The rush of online brands partnering with physical retailers or opening stores of their own is evidence of the perseverance of brick-and-mortar retail, even as more shopping migrates online. Even if they don’t earn a profit on their own, these outposts bring value to brands by providing a space to market and promote their offerings.
“Most new brands find that about 50 percent of their brand awareness comes from retail, not public relations, not digital advertising,” says Phillip Raub, founder of b8ta. “People are discovering and learning about their products for the first time [in-store].”
What Else We’re Reading This Week
Trying to find that secret sauce to stay motivated and avoid burnout? A recent study on zookeepers might hold clues. – Quartz
Why are tech companies racing to build faster internet connections in underdeveloped parts of the world? Because Africans are consumers, too. – The Wall Street Journal
Eager to check out the world of gaming, but don’t want to buy all that hardware? Here’s how to cut the cord. – Axios
Global & Society
The newest threat to economic stability? Climate change protests. Here’s how security firms are going to help corporations weather the storm. – The New York Times
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