Clicks to bricks strategy is a business model whereby businesses have both an online store and a physical location integrated into a single retail strategy. These strategies illustrate a major shift in the way retailers are choosing to connect with and drive customers to physical locations.
Despite the major disruption in the retail space, businesses continue to grow by finding innovative ways of engaging customers. According to JLL, an investment management company, ecommerce retailers (e-tailers) are planning to open 850 physical stores throughout the United States within the next five years. By evaluating the histories and expansion plans of 100 e-tailers, they found that PIRCH, a California-based furniture and housewares retailer, made their first physical appearance in 2009, following closely by Athleta that offers trendy sportswear and accessories for women, BHLDN which is a clothing retail company specializing in wedding dresses, and Trunk Club, a personalized clothing service for men and women. Despite what business owners may think, shoppers are still interested in the convenience and instant acquisition they can get at a physical store as opposed to shopping online.
Innovative Ways of Turning Online Shoppers into Foot Traffic Customers
Based on the JLL report, 16 percent of clicks-to-bricks retailers chose Los Angeles as the hub for launching their pop-up store while 12 percent chose San Francisco to launch permanent retail spaces. However, New York City remains the place to be with 60 percent of clicks-to-bricks retailers opening their first pop-up store and 41.3 percent of e-tailers opening their first permanent location. E-tailers are choosing innovative ways of closing the gap between online shopping and luring shoppers into physical locations.
Apparel and accessory brands like UNTUCKit and Bonobos are prime examples of clicks-to-bricks retailers making the shift from strictly online retail space to physical locations. Although online retail shopping is still highly popular, it makes sense to open physical locations as consumers enjoy touching and trying on clothing before making the commitment.
Casper, a popular mattress retailer, launched their first standalone store in New York City in 2018. While they believe in brand consistency, they have made small tweaks based on customer preferences and location, changing the store’s music playlist and adding/removing certain products. They plan on opening 200 stores throughout the USA by 2021.
Adore Me, a women’s intimate wear brand, is choosing a unique clicks-to-bricks strategy for connecting with consumers. They’re adding storefront locations in close proximity to Victoria Secret stores. One of their differentiators includes a wide range of sizes. With an initial plot of 10 locations by 2019 and plans for expanding to 200-300 stores over the next five years, they offer showrooms to find the correct garment fit. Shoppers can book online appointment sessions with in-store stylist, try new products online or in-store, or shop exclusively online.
Other in-store strategies include:
- Discount initiatives by purchasing online and picking up in store
- In-store purchase point rewards
- Free product days
- Experiential events
- Product launch parties
- Book signings
- Using special days of the year to create an in-store event
- Birthday discounts on in-store purchases
- Pet parties and breed educational days
- Instagrammable food events
Retail Space is Getting Cheaper
Not only do shoppers enjoy more of a personal experience by being able to interact with merchandise and sales associates, commercial real estate is also becoming more affordable. While big-name stores are closing, prime retail space is more readily available in high-end shopping centers at a much lower price. Property owners are willing to negotiate terms with lessees in order to fill valuable retail space.
Physical Locations Boost Sales
E-commerce retailers are experiencing an increase in sales by having a physical location in addition to an online store. Fabletics, for instance, never featured physical stores in their original plan in late 2014. However, they soon realized the importance of permanent retail spaces for acquiring customers more efficiently. They now enjoy two-and-a-half times increase in revenue from their most active customers within a 30-mile radius of their 34 physical storesin North America. Head of retail for Fabletics, Ron Harries, said that consumers who live in close proximity of Fabletics stores are more likely to make in-store returns. This creates an opportunity for additional in-store purchases.
Leveraging Digital for an Increased Physical Presence
While many consumers still choose online shopping as their preferred retail experience, the physical portion of their businesses still require a large portion of their margin. In order to make the clicks-to-bricks strategy a success, digital campaigns need to remain current and innovative.
Web analytics play a major role in online sales, focusing on behavior targeting, goals, benchmarks, and overall campaign direction. Although it’s extremely difficult to use analytics for in-store purchases, it’s becoming an important challenge to overcome as the retail market continues to shift.
The need for mobile-friendly websites in a mobile-first indexing era are more important than ever before. Mobile marketing offers consumers the opportunity to shop from anywhere. They’re able to find the nearest store location with ease of access to important information and in-store promotions.
The digital experience, however, goes beyond an online presence. Amazon Go, a brick-and-mortar manifestation of the famous online e-tailer, has taken the convenience store to the next level. Upon entering the store, customers are checked in at a turnstile using an app-generated barcode. Items are picked up off the shelves and added to a ‘checkout basket’ with the help of in-store cameras. Customers are able to add and remove items as they please. Once they’ve accumulated the items on their shopping list, customers are able to leave the store without having to stop at the register or present any payment method.
The Future of Clicks-for-Bricks Retailers
Several digital-native retailers (e-tailers) have chosen showroom modelsfor their in-store experience. This allows consumers to try out and interact with sample products. The challenge is that consumers prefer instant acquisition – being able to leave the store with an actual product. As brands grow online and consumers continue to flock to physical retail spaces, showroom models may diminish. However, innovative e-tailers continue to lead with creative ways to engage customers online and drive them to an in-store experience. E-commerce isn’t killing brick and mortar stores. It’s allowing retail to tap into traditional in-store shopping behaviors to significantly increase revenueas well as brand awareness.
Learn more about the benefits of adding a clicks to bricks strategy to your business model with Pop-Up Shops and Airports: The Perfect Match.