clicks to bricks

© Green Room 2016 1

Clicks to Bricks


Online e-tailers are doing the last thing their venture capitalist backers ever thought they’d want to do: laying down some good-old bricks and mortar.

The retail trend from clicks to bricks is becoming a common occurrence as online-only retailers discover that a physical presence and multiple channels of distribution can help to build volume and scale.

According to research by Verdict and British Land, in 2015, 89 per cent of retail sales ‘touched’ a physical store. The figure represents a 5% boost to in-store sales and demonstrates how different retail channels complement each other.

© Green Room 2016

Irreplaceable Experiences.

Clicks to bricks debutants have a fresh and unencumbered approach to retail and are playing an important role in helping to introduce effective digital solutions into retail spaces.

Their dynamic, fast-paced and data-driven background means that these new entrants on the high street are good at developing the possible symbiotic relationships between physical and digital stores, solutions such as click-and-collect, consumer online stock checking and pre-booking time with in-store assistants.

Their digital fluency also means they are keen to introduce effective digital solutions in-store, to both integrate with their online offering and provide the data to help future decision making.

© Green Room 2016

Physical Presence.

The following three examples of recent clicks to bricks high-street new-comers have all proven that having a physical store presence supplements and enhances their brand experience.

In each example the brands have found value in giving their customers direct access to physical products, which is something that online simply cannot achieve on its own.


Made.com

Online homeware retailer Made.

com now has a fleet of physical

showrooms, which feel like a blend

of Ikea meets Tate Modern. Their

ability to use digital interactions to

add value to their physical store

experiences have set them as

leaders in this field.

CEO and founder Ning Li states

the future for Made.com is a

“convergence of online and offline”,

using the showroom to improve the

online retail experience. “Everyone

is trying to find a way to link both

online and physical worlds. Online,

there are no square footage

constraints – space is endless – so

coming up with ways to showcase

our full catalogue was a challenge.”

Physical Presence | Clicks to Bricks_


Baublebar

Fashion jewellery label BaubleBar started out online but set

their sights on bricks and mortar from day one, evolving first

a pop-up store, then launching an exclusive collection with

Anthropologie.

“We’ve always believed that an offline presence was key

to building a brand,” co-founder Amy Jain said. “Men and

women touch and feel our product, and they immediately

understand what BaubleBar is about.”

Their approach is paying off; “The basket size and order size

at bricks-and-mortar stores is about three times what it is

online” commented Jain.

Julia Straus, BaubleBar’s director of partnerships, said

that their pop-up strategy has become about customer

acquisition; “After people have the opportunity to touch and

feel the product, they’re more likely to shop on the site”.



Athleta

The athletic wear brand launched e-commerce operations in 1999, but physical stores didn’t

follow until more than ten years later when Gap acquired them and brought the brand to the

high street, planting its first flagship store in San Francisco.. The chain currently has about 80

stores, and on a recent earnings call stated that its current aim was to get to 100 locations

around the world.



Made.com

Online homeware retailer Made.

com now has a fleet of physical

showrooms, which feel like a blend

of Ikea meets Tate Modern. Their

ability to use digital interactions to

add value to their physical store

experiences have set them as

leaders in this field.

CEO and founder Ning Li states

the future for Made.com is a

“convergence of online and offline”,

using the showroom to improve the

online retail experience. “Everyone

is trying to find a way to link both

online and physical worlds. Online,

there are no square footage

constraints – space is endless – so

coming up with ways to showcase

our full catalogue was a challenge.”



Baublebar

Fashion jewellery label BaubleBar started out online but set

their sights on bricks and mortar from day one, evolving first

a pop-up store, then launching an exclusive collection with

Anthropologie.

“We’ve always believed that an offline presence was key

to building a brand,” co-founder Amy Jain said. “Men and

women touch and feel our product, and they immediately

understand what BaubleBar is about.”

Their approach is paying off; “The basket size and order size

at bricks-and-mortar stores is about three times what it is

online” commented Jain.

Julia Straus, BaubleBar’s director of partnerships, said that

their pop-up strategy has become about customer acquisition;

“After people have the opportunity to touch and feel the

product, they’re more likely to shop on the site”.



Athleta

The athletic wear brand launched e-commerce operations in 1999, but physical stores

didn’t follow until more than ten years later when Gap acquired them and brought the

brand to the high street, planting its first flagship store in San Francisco.. The chain

currently has about 80 stores, and on a recent earnings call stated that its current aim

was to get to 100 locations around the world.


© Green Room 2016

Physical & Personal Touch.

These online retailers converted to a shop format when they discovered the value it could add to their customer experience, having found that customers wanted a more specialist interaction with the brand and products beyond the website. Driven by consumers increasingly demanding to physically “touch” products, in both a literal and personal sense, the multi-sensorial experience of a store just cannot be replicated, as yet, online.


BonobosBonobos co-founder and CEO Andy Dunn’s market research told him that about half of his

customers needed to put hands on the product before they made their first purchase, so he

set up a couple of fitting rooms in the lobby of the Bonobos offices. When they started doing

a million dollars of revenue in run rate out of that lobby, it was a clear green light for opening a

store. They now operate ten shops called Bonobos Guideshops.

The ‘Guideshop’ store format is unconventional; you cannot walk out with merchandise. Instead,

a knowledgeable ‘Guide’ walks customers through Bonobos merchandise, helping clientele to

find their perfect fit. The order is then shipped directly to a chosen address. Due to the popularity

of these stores, booking ahead is advised.

Dunn sums up why the physical business is growing: “We believe the future is digital,

but great in-person experiences aren’t going away”.

And, on the subject of their revised store format, he further explained; “If you pull the

inventory out of a store, you can really deliver an experience: Rather than having people

run around folding clothes and waging war against huge inventory, we can focus on

the customer.”

Physical and Personal Touch | Clicks to Bricks_


Indochino

Indochino, the Vancouver-based maker of made-to-measure suits, created a

“Traveling Tailor” concept as a reaction to the identified needs of their predominantly

male customer. It became evident that buying a custom suit - even when it can

be done efficiently online - is something that many men still prefer to do in person.

The first Travelling Tailor in 2011 proved so popular that the number of pop-ups

developed continues to increase year-on-year in high-traffic locations. From 7

permanent “showroom” locations in 2016, the company plans to open a further 150

bricks-and-mortar stores by 2020.

“The business is designed [so] that you and a buddy can measure at home in 10 to

15 minutes,” says Indochino CEO Kyle Vucko, “but there is a group of guys who like

the convenience of pre-booking an appointment, getting measured, swiping [their]

cards and heading out the door.”

For those who might not be so sure about what style of suit they want to buy,

it’s even more important. “It’s a safe place where guys can ask seemingly silly

questions about fashion,” Vucko says.



Warby ParkerThis fashion-forward eyewear brand

started out as an online-only retailer

in 2010, but they now operate an

international collection of independent

stores and “showrooms”.

“We view the future of retail as a truly

blended approach. Customers are

shopping online [including on their

phones] more than ever, but people

still crave in-person experiences and

interactions,” said co-founder Neil

Blumenthal. “Having physical stores is

another way we can bring customers

into the world of Warby Parker—both

existing customers and people who

happen to walk past the store without

having encountered us before.”



BonobosBonobos co-founder and CEO Andy Dunn’s market research told him that about half of his

customers needed to put hands on the product before they made their first purchase, so he set

up a couple of fitting rooms in the lobby of the Bonobos offices. When they started doing a million

dollars of revenue in run rate out of that lobby, it was a clear green light for opening a store. They

now operate ten shops called Bonobos Guideshops.

The ‘Guideshop’ store format is unconventional; you cannot walk out with merchandise. Instead,a

knowledgeable ‘Guide’ walks customers through Bonobos merchandise, helping clientele to find

their perfect fit. The order is then shipped directly to a chosen address. Due to the popularity of

these stores, booking ahead is advised.

Dunn sums up why the physical business is growing: “We believe the future is digital,

but great in-person experiences aren’t going away”.

And, on the subject of their revised store format, he further explained; “If you pull the

inventory out of a store, you can really deliver an experience: Rather than having people run

around folding clothes and waging war against huge inventory, we can focus on

the customer.”



Indochino

Indochino, the Vancouver-based maker of made-to-measure suits, created a “Traveling

Tailor” concept as a reaction to the identified needs of their predominantly male

customer. It became evident that buying a custom suit - even when it can be done

efficiently online - is something that many men still prefer to do in person. The first

Travelling Tailor in 2011 proved so popular that the number of pop-ups developed

continues to increase year-on-year in high-traffic locations. From 7 permanent

“showroom” locations in 2016, the company plans to open a further 150 bricks-and-

mortar stores by 2020.

“The business is designed [so] that you and a buddy can measure at home in 10 to 15

minutes,” says Indochino CEO Kyle Vucko, “but there is a group of guys who like the

convenience of pre-booking an appointment, getting measured, swiping [their] cards

and heading out the door.”

For those who might not be so sure about what style of suit they want to buy, it’s even

more important. “It’s a safe place where guys can ask seemingly silly questions about

fashion,” Vucko says.



Warby ParkerThis fashion-forward eyewear brand

started out as an online-only retailer

in 2010, but they now operate an

international collection of independent

stores and “showrooms”.

“We view the future of retail as a truly

blended approach. Customers are

shopping online [including on their

phones] more than ever, but people

still crave in-person experiences and

interactions,” said co-founder Neil

Blumenthal. “Having physical stores is

another way we can bring customers

into the world of Warby Parker—both

existing customers and people who

happen to walk past the store without

having encountered us before.”


© Green Room 2016

Generate awareness through exposure.

There have been numerous examples of brands investing in showrooms and pop-ups purely for the media attention that they can leverage from the presence.

The following four examples all highlight the benefit that a physical presence can provide.


EtsyPop-ups | Clicks to Bricks_

Etsy, the online marketplace for handmade goods, opened its first standalone seasonal pop-up store in

New York. Open for ten days only; the store featured an edited collection of products from Etsy’s online

community of artisans.

The pop-up also offered customers the chance to connect with some of the faces behind the small

businesses on Etsy through a raft of workshops held within the space, “live-crafting” events hosted by

Etsy designer-makers, and other look-and-learn experiences.

Proving such a hit for the Etsy community, the brand recently launched Etsy House,

the first-ever, three-day UK Etsy pop-up shop. Located in the heart of London’s

Covent Garden, the shop featured products for sale from Etsy sellers across

multiple categories including art, home decor, bath & body, clothing, jewellery,

furniture, stationery, and more.


Pro-DirectPro-Direct’s debut store, just off

Carnaby Street, was their first foray

into bricks and mortar. The store’s

brief from inception was to create

‘Retail Theatre’. To bring to life a

physical manifestation of the constantly

evolving, content-led, editorialised

online store. To develop a hub for their

loyal football fans to interact with the

physical product; a meeting place; a

place to share experiences; a place to

host events; a brand focus.

Their space boasts a packed calendar

of events including brand launches,

competitions, live broadcasts,

celebrity appearances and signings.

These activities now draw huge

online audiences with far greater

reach potential that the geography

surrounding the store. Unsurprising

given that the store has 400,000+

Instagram followers.

PR | Clicks to Bricks_


eBayPop-ups | Clicks to Bricks_

For five days only, the retailer opened a

pop-up ‘dynamic virtual store’. The space

showcased only a small selection of

eBay’s bestselling products, selected using

Amazon-style recommendations based on

what’s popular now – realised from social

network chatter.

Items were displayed alongside a QR code,

which when scanned with a smartphone

took customers to the checkout on eBay’s

website. The item was then delivered to the

shopper’s door just a few days later.


BirchBoxBirchBox, the subscription box service for cosmetics, opened a permanent store in NY

after the success of a string of pop-ups. The store attempts to mimic in retail everything its

makeup tutorial-obsessed devotees love about the site. Displays match the typeface and

design of their website counterparts.

Digital integration is strong, with iPads propped up for perusing the store’s digital catalogue.

The curated collections change monthly with the theme of their boxes, and on the lower

levels, there are areas for salon treatments and classes in cosmetology.

“It’s incredibly valuable to have a direct line to customers every day,” Birchbox co-founder

Katia Beauchamp told the Observer. “It keeps you focused and forces you to improve.

We’re almost four years old—you don’t just create a disruptive product once and say to

customers, ‘ride with us forever.’”



Pro-DirectPro-Direct’s debut store, just off

Carnaby Street, was their first foray into

bricks and mortar. The store’s brief from

inception was to create ‘Retail Theatre’.

To bring to life a physical manifestation

of the constantly evolving, content-led,

editorialised online store. To develop

a hub for their loyal football fans to

interact with the physical product;

a meeting place; a place to share

experiences; a place to host events; a

brand focus.

Their space boasts a packed calendar

of events including brand launches,

competitions, live broadcasts,

celebrity appearances and signings.

These activities now draw huge

online audiences with far greater

reach potential that the geography

surrounding the store. Unsurprising

given that the store has 400,000+

Instagram followers.



EtsyPop-ups | Clicks to Bricks_

Etsy, the online marketplace for handmade goods, opened its first standalone seasonal pop-up

store in New York. Open for ten days only; the store featured an edited collection of products from

Etsy’s online community of artisans.

The pop-up also offered customers the chance to connect with some of the faces behind the small

businesses on Etsy through a raft of workshops held within the space, “live-crafting” events hosted

by Etsy designer-makers, and other look-and-learn experiences.

Proving such a hit for the Etsy community, the brand recently launched Etsy

House, the first-ever, three-day UK Etsy pop-up shop. Located in the heart of

London’s Covent Garden, the shop featured products for sale from Etsy sellers

across multiple categories including art, home decor, bath & body, clothing,

jewellery, furniture, stationery, and more.


eBayPop-ups | Clicks to Bricks_

For five days only, the retailer opened

a pop-up ‘dynamic virtual store’. The

space showcased only a small selection of

eBay’s bestselling products, selected using

Amazon-style recommendations based on

what’s popular now – realised from social

network chatter.

Items were displayed alongside a QR code,

which when scanned with a smartphone

took customers to the checkout on eBay’s

website. The item was then delivered to the

shopper’s door just a few days later.


BirchBoxBirchBox, the subscription box service for cosmetics, opened a permanent store in NY after

the success of a string of pop-ups. The store attempts to mimic in retail everything its makeup

tutorial-obsessed devotees love about the site. Displays match the typeface and design of

their website counterparts.

Digital integration is strong, with iPads propped up for perusing the store’s digital catalogue.

The curated collections change monthly with the theme of their boxes, and on the lower levels,

there are areas for salon treatments and classes in cosmetology.

“It’s incredibly valuable to have a direct line to customers every day,” Birchbox co-founder

Katia Beauchamp told the Observer. “It keeps you focused and forces you to improve. We’re

almost four years old—you don’t just create a disruptive product once and say to customers,

‘ride with us forever.’”


© Green Room 2016

Customer Convenience.

Clicks to bricks brands also understand the value of customer convenience. Macy’s CEO, Terry Lundgren, commented on click and collect purchasers; “We love this kind of sale; because [the customer has] already made her decision, she knows where to go in-store, and when she gets there, she almost always buys something else — spending about 125% of her intended order. And she doesn’t require a delivery fee.”


Groupon

US online discount voucher business Groupon founded a Hong Kong store intended to

make it easier for customers to redeem deals purchased on its website, as well as providing

a space where they can test out the products.

Shoppers are provided with iPads to browse, buy and print Groupon vouchers on the spot

in the 4,000 sq ft space. “We’ve found many customers prefer picking up their Groupon

products as opposed to delivery in Hong Kong,” explained Danny Yeung, chief executive

and founder of Groupon Hong Kong.

Groupon Australia chief executive Alistair Venn was motivated to create a seasonal Groupon

Pop-up purely catering to Groupon customers who wanted to “click and collect”. The pop-

up also had the added benefit of introducing Groupon to new customers. Their statistics

seem to be proving the point, Venn commented; “of the Groupon customers that have

purchased one of the 20 stocked products online, 47% have opted to “click and collect”.

Customer Convenience | Clicks to Bricks_


Frank & OakThis Canadian menswear retailer

opened its first location in Montreal.

While at the store, shoppers have

the opportunity to meet with style

advisors—and even get a haircut!

Highlighting the sensorial differentiator

of the physical environment.

Their online to in-store customer

experience prides itself on being “All

Synched”, which uses single-sign-

on (SSO) technology to link your web

and store accounts. Purchases gain

credits, which can be used against

other purchases anytime, anywhere.



Rent the Runway

Rent the Runway, a burgeoning designer dress rental startup, just

raised $60 million in venture capital to open more physical retail

following the success of its first freestanding store in New York City’s

Flatiron district. The new investment will fuel their expansion to four or

five new Metropolitan areas.

Co-founder Jennifer Fleiss said the location has proven to be a positive

step forward in converting browsers into buyers, as it eased shoppers’

fears that an item wouldn’t fit or show up on time. At the store, visitors

can reserve rentals for future events, or take items with them that day.

The location also offers the added value of tailoring services.



Groupon

US online discount voucher business Groupon founded a Hong Kong store intended to make

it easier for customers to redeem deals purchased on its website, as well as providing a space

where they can test out the products.

Shoppers are provided with iPads to browse, buy and print Groupon vouchers on the spot in

the 4,000 sq ft space. “We’ve found many customers prefer picking up their Groupon products

as opposed to delivery in Hong Kong,” explained Danny Yeung, chief executive and founder of

Groupon Hong Kong.

Groupon Australia chief executive Alistair Venn was motivated to create a seasonal Groupon

Pop-up purely catering to Groupon customers who wanted to “click and collect”. The pop-up

also had the added benefit of introducing Groupon to new customers. Their statistics seem to

be proving the point, Venn commented; “of the Groupon customers that have purchased one

of the 20 stocked products online, 47% have opted to “click and collect”.



Frank & OakThis Canadian menswear retailer opened

its first location in Montreal. While at the

store, shoppers have the opportunity

to meet with style advisors—and even

get a haircut! Highlighting the sensorial

differentiator of the physical environment.

Their online to in-store customer

experience prides itself on being “All

Synched”, which uses single-sign-

on (SSO) technology to link your web

and store accounts. Purchases gain

credits, which can be used against other

purchases anytime, anywhere.


© Green Room 2016

What Next?

While the fear of clicks replacing bricks is rescinding, behaviours adopted by online retailers when they execute high street stores is certainly having an effect on the bricks and mortar category overall:

Stores need to connect effortlessly to online channels with interactive facades transforming architectural spaces into interactive, shoppable and social experiences.

Driven by e-commerce, consumers demand real-time retailing, ‘fluid’ store environments that ‘shape-shift’ according to the spaces or people in and around them have great appeal. This new breed of space capable of reacting to those around them indulges consumers’ increasing appetite for personalised experiences.

A new wave of elevated experiences emerges to hold the added value of unpredictable physical happenings in retail, from co-creation to celebrity launches, which are difficult to replicate online, are one of the primary drivers of physical retail visits.

While digital consumers value speed, real-time service and efficiency, the mileage in providing added extras through service in store is being illustrated by many successful brands. The social currency of new skills and knowledge that excellent service can offer provides an opportunity to deliver something more emotional beyond formulaic brand assistance – replacing transactional sales for lifestyle enhancing advice.

© Green Room 2016

Conclusion.

The fear that clicks may one day entirely replace bricks is no longer the case. In fact, those brands which make the two channels work together and cross fertilise each other are likely to be the most successful retailers in the future.

This report has shown that innovation in this online/real world symbiosis is already happening amongst these digital native new-comers to the high street. Clicks to bricks brands are well placed to disrupt traditional retailing and deliver architectural spaces that are interactive, inventory free, heavily digitised but using consumer-centric design and still sensorial, sociable and shareable experiences.

© Green Room 2016

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