So much for the retail apocalypse. 67% of ecommerce brands have opened physical stores

Amidst the apparent decline in brick-and-mortar, 67% of leading ecommerce brands have opened physical spaces in the past 36 months.

Take a poll of most people working in retail and they will tell you the same thing, the industry is in total flux.

Look across the spectrum of retail press and you’ll see that the headlines are engulfed with a sense of impending doom for the future of retail; store closures, job losses and household names disappearing from shopping malls.

But there is a group of rapidly-growing digital native brands defining an entirely different future for retail. We decided to dig a little deeper.

Amidst a lot of talk about a retail apocalypse and store closures — dozens of e-commerce brands are actually heavily investing in opening brick and mortar stores, and creating a new type of ‘connected retailer’.

We studied the top Digital Native Vertical Companies (DNVCs, catchy) who have received over $6m in funding. Our research looked at brands like Everlane, Birchbox, Warby Parker and Made.com; companies who have seen rapid growth in a challenging retail market.

Our findings unearthed some surprising results, showing that a staggering 67% of these once pure-play brands have now launched a physical store or showroom in the past 36 months. A curious move in the midst of an impending ‘retail apocalypse’.

Clockwise from left to right: Warby Parker store Washington DC, Bonobos store LA and Away’s New York boutique.

Putting experience at the heart of retail

Unlike retailers who all-too-often see their website as an extension of their stores, these brands regard themselves as ecommerce businesses with physical spaces. They have grown up into a world of omni-channel. They use data to decide where they open their next locations and strive to ensure a seamless experience across all channels. We call them ‘omni-channel natives’.

“We don’t think retail’s dead. We think mediocre retail is dead…Historically, the world’s been viewed as pretty black and white. You had e-commerce companies like Amazon, or had kind of pure bricks-and-mortar retailers. You’re seeing a convergence. Most consumers don’t think of the world in channels.”
— Dave Gilboa, Co-Founder & Co-Ceo, Warby Parker

Omni-channel natives aren’t just opening cookie-cutter stores, but are experimenting with multiple formats to keep consumers engaged. Online car dealership Carvana recently launched an impressive car vending machine. Eyewear brand Warby Parker started trialing physical retail by renovating old school busses in 2012 and has since successfully opened 62 physical outlets (at last count). Subscription beauty box service Birchbox opened its first physical store in SoHo, NYC and is set to open a second in Paris later this year.

Carvana has launched its 4th car vending machine in 2 years

These brands are seeking to extend the innovation brought about by technology to the physical space, injecting it with a new lease of life that allows for better customer experiences that increase sales and growth.

Because they know brick-and-mortar stores convert at anywhere up to 30% — much higher than their websites, physical stores have a killer advantage that is — at present — missing from ecommerce; expertise from associates.

These expertly trained individuals are able to get under the skin of a customer’s needs, offering guidance, help and reassurance — and can up-sell the roster of products in-store. They are the human faces of the brand.

Without this hands-on, personal service, online shopping is purely transactional; heavily reducing conversion rate in the process.

‪It is with this understanding that the retail disruptors who started out exclusively in ecommerce are seeing the opportunity to find growth by delivering human-led experiences, with their stores and associates at the heart of the offering.

MADE showroom, Paris

Delivering personalized experience, at-scale

With retail disruptors like Made.com and iconic brands like Harvey Nichols, Hero is turning in-store sales associates into connected real-time advisors — extending the personal experience of the physical store to online shopping.

Made’s expert advisors, found in showrooms from London to Berlin, can shop with online customers through messaging and live video streamed from the shop floor, increasing conversion rates by 19 times — with customers spending 80% more. By digitally connecting 21bn sq. ft of physical space, retailers can create a formidable advantage against Amazon.

We’re excited to be part of the rebirth of the physical store and it looks like we’re in good company.

Discover the full list of brands:

  • All brands marked ‘Yes’ have opened a physcial location within the past 36 months, expect for Harry’s which set the trend, opening it’s Corner Shop in Oct 2013.

Data drawn from sources including:
Crunchbase
Andy Dunn’s V-Commerce encyclopaedia