News Feature | March 27, 2015

Online Retailers Opening Storefronts Shows New Cycle In Retail

Source: Innovative Retail Technologies

By Brianna Ahearn, contributing writer

Online Retailers Opening Storefronts

In February 2014, Forbes ran a piece entitled “Year of Reckoning for Brick and Mortar Retailers” about the shift in the shopping mentality of the American consumer. For years, Forbes said, it was as simple as establishing a storefront near housing developments or establishing properties. In these central locations, retailers would flourish, particularly with the popularity of the shopping mall.  The retail landscape has changed significantly in the last twenty years as technology has advanced in all facets of a consumer's life. In the 1980's, the shopping mall was more than a retail destination, it was a hub of an individual's social and community experience. With the invention of the internet, shopping started slowly shifting online, and existed beyond the microcosm of the mall or strip mall. 1994 saw the arrival of Amazon and in 1995, auction retailer eBay. Seeing the rising popularity on online shopping, and wanting to keep their existing customer base meant brick and mortar retailers needed to rethink their marketing process and get digital. Retail analysts seeing the changing tide in consumer behavior declared online shopping was the future. Now in 2015, retailing has reached a new point, however, where retailers that once existed solely online are moving into a brick and mortar model.

The online shopping experience offers benefits to both consumers and retailers. Retailers are able to market via email and other digital channels, maintain a large inventory, and aren't hampered by a commercial real estate market for choosing a viable storefront with a good walk score and centrally located to their target consumer. Customers are able to enjoy a streamlined shopping experience with one click, without needing to visit a store in inclement weather or during a busy week. Online shopping also allows purchases to be delivered right to a consumer's door for free or a nominal fee. Online retailers have also seen the benefits of having a brick and mortar presence though, and the number of online retailers rushing to establish a physical presence in a storefront is growing. With a physical storefront, online retailers are exposed to a new audience that may not be aware of their online presence, and also offer a more hands-on experience, since customers can touch and try on products, or receive an in-store demonstration of their features.

Prescription eyewear and sunglasses retailer Warby Parker was founded in 2010, and five years later the company has four retail stores and eight showrooms. The company is currently looking into building its own POS (Point of Sale) system, and will open its first Miami, Florida store this month. Speaking to INC upon opening their flagship store in New York City, founder Neil Blumenthal says, “We believe the future of retail is at the intersection of e-commerce and bricks-and-mortar.” He also cited Warby Parker's famous “try on at home” offer as one reason they went retail, saying that customers would ask to come try on glasses at Warby Parker's headquarters, which at that time was a city apartment. The retailer then offered pop-up stores and a showroom, before finally offering a flagship store.  Warby Parker is a prime example of the benefits of a brick and mortar approach for retailers.

Subscription box company BirchBox opened their first retail location in Manhattan not far from Warby Parker's, letting customers put together custom boxes of beauty samples, browse of all BirchBox's offerings, and receive personalized recommendations. BaubleBar, an online jewelry retailer, has been open for only three years, but is now experimenting with a pop-up shop in Manhattan as well, in a move a Business Insider writer called a retail store “women desperately need,” because the retailer offers fashionable yet affordable jewelery to women age 20 and up. Even Amazon isn't shying away from the trend, and instead opened its first brick-and-mortar store at Purdue University in February. The campus store lets college students order rented textbooks then pick them up in-store, and also serves as a pick-up/drop-off location for returns and orders. Amazon is still exploring new retail location options as well, showing that while online shopping was once the wave of the future, the focus has shifted to be both online and offline for retailers who want to maximize their profits and reach, as well as offer consumer service.