From Clicks to Bricks: Online Retailers Dabble in Physical Stores
When Warby Parker founder Neil Blumenthal wrote the business plan for what is now one of the hottest e-commerce companies, there was no mention of physical stores. But 48 hours into the affordable-eyewear site's February 2010 launch, he had to reconsider that omission.
"We had to suspend our home try-on program because of unexpected demand," said Mr. Blumenthal, on the phone from Boston, where Warby Parker just opened a store on Newbury Street, its second permanent outpost. "So I started inviting people over to my apartment -- our headquarters at the time -- to try on glasses. That was our first indication that brick-and-mortar would be a big part of our business."
Showrooms, pop-ups and mobile trucks followed, all with success. In response, Warby Parker opened its first permanent store in New York's SoHo neighborhood last month. Boston opened May 17, with more stores planned over the next year. "As awesome as the internet is, somebody can experience a brand in a physical setting in a way that no digital experience can replicate," said Mr. Blumenthal. "In five years when people use the term "retail,' it'll mean both physical and e-commerce. The phrase "e-commerce' won't even be used any more."
Warby Parker isn't the only previously pure-play e-commerce retailer to establish permanent physical stores. In September 2012, Gap-owned Piperlime opened a shop in SoHo, where it offers an edited sample of the contemporary-priced clothing and shoes sold on the site. Bonobos' Guide Shops, on the other hand, hold no inventory. Instead, they serve as a showroom, where a man can go and try on the brand's shirts, pants and other products. If he purchases something, the store places the order, and it's shipped from warehouse to his home.
"It's a better experience for our customer," said Bonobos Chief Financial Officer Bryan Wolff. "Guys want to be more efficient about their shopping -- they don't need to take home the bag that day."
Even daily-deals player Living Social has a store in Washington. It serves as a space for the company's top local merchants to hold events, such as self-defense classes and cheese tastings.
Though they result in more overhead cost, stores can be worth it. Both Warby Parker and Bonobos say the customer who makes his first purchase in-store typically makes a second purchase, and usually online. Mr. Wolff put it this way: "Eighty-five percent of people still like to purchase offline."
Bauble Bar, the online jewelry store co-founded by Daniella Yacobovsky and Amy Jain in January 2011, plans to continue with old-hat pop-up shops for now. "If we can get people touching and feeling our product, it's a huge win for us," said Ms. Yacobovsky. "But we're a startup in the classic sense, and we're resource-restrained. We're still figuring out what the right formula is for us offline, so we're going to try to gather as much data and do as much testing as possible before committing."