Despite raising eyebrows at the beginning, truth is that in the last couple of years, nearly 20 online retailers in the US alone have opened brick & mortar stores.
The likes of Apple, Amazon, Bonobos, Birchbox or Casper are just some of these formerly pure online players which are already profiting from boosted market share, stronger relationships with consumers and higher online traffic and sales.
“It’s very hard to launch a brand these days that’s just online-only. It’s an incredibly difficult and crowded e-commerce environment,” said Sucharita Mulpuru, a retail analyst at Forrester Research, earlier this year, at the National Retail Federation’s annual Big Show conference in New York.
Fabletics uses physical stores to win over online skeptic customers
“At Fabletics, retail introduces our products to consumers who are uncomfortable with online ordering. It allows us to service existing online customers at an even higher level. It’s the paradox and payoff of going from online to off,” sums up Shawn Gold, the Chief Marketing Officer (CMO) of Fabletics. In fact, Fabletics’ “next 18 to 24 stores will be where our online customers are and where brand awareness is strongest.”
In a recent interview with ‘Business Insider’, the CMO of Fabletics recalls how the athleisure brand began as an e-commerce company, “But we opened 14 stores in the past year with more on the way.”
“The trend isn’t about overconfident e-commerce executives, though. There’s real value here, and Fabletics is looking to capture some of it,” assures Gold.
“Since we already have deep data about our online customers, we can customise what we stock in a given store,” adds Gold, giving away more reasons for the retailer to go offline. “We're seeing that our customers with a store nearby have twice the lifetime value as those without one. These customers also report much higher satisfaction,” further explains Fabletics’s CMO to ‘Business Insider’.
Meanwhile, advertising on the online space is also becoming more and more expensive, highlights ‘The Guardian’, quoting a study by L2 Inc. This report outlines the estimated 6.4 million dollars and 4 million dollars that Macy’s and Nordstrom spent respectively in paid search listings for the top 1,000 apparel-related keywords in the first quarter of 2015.
By opening physical stores, they aim to increase awareness and draw customers in a realm where the retail options aren’t infinite or influenced by an all-powerful gatekeeper, reports ‘The Guardian’.
“Every metric related to the consumer is healthier now than it was the past couple years,” says John Kernan, an analyst for Cowen & Co. “The consumer is in a very good position right now,” assured Kenan earlier this week in an interview with Bloomberg, highlighting the case of brands such as Bonobos or Fabletics that have collectively steered 200 billion dollars in annual sales away from big chains over the last five years, according to research from Deloitte.
“All this has encouraged us to double down on retail. Over the next few years we plan to put a store within a convenient drive of 80 percent of the US population,” advances Gold, confirming Fabletics’ strong bid for a truly omni-channel strategy.