In 2020, according to McKinsey & Company, Brick-and-Mortar stores will realise 80% of the USA retail sales. This figure proves that retail is not dead. Some Pure Players have been insolently growing in the past years. Now you have probably already heard of the word Phygital? This marketing contraction comes from the words Physical and Digital. This basically combines the digital and the physical marketing techniques. After a couple of years of e-commerce investment from the Brick-and-Mortar, we are going see Pure Players investing in physical stores. And according to Jim Cusson, President at Retail Branding Agency Theory House, the biggest changes in the retail sector will not come from what he calls the “Legacy Retailers” but from the Pure Players. There are some great innovation in the retail sector and here are some of them. Here are 4 reasons why Pure Players want to open stores!
Seeing, Touching, Testing the Products
This fact is particularly true for the fashion and furniture sectors. Being able to see, touch and test the products eliminates a lot of obstacles during the buying process. According to Guillaume Lachenal, CEO of Miliboo.com, clients asked to see and try the products but also have advice. Miliboo.com didn’t want a classic store but a store reflecting their “Pure Player” origin. The idea was to reconcile the consumer journey between the digital and physical stores. The Parisian store would, after only one year, already be profitable! And Guillaume Lachenal adds that the customer returns are exceptional and the average basket increased. But the growth of online marketing spendings makes Pure Players Business Model more complex. The marketing pressure is very high. It is as if you had all your competitors in the same street, says Guillaume Lachenal.
Better Logistics with Click & Collect
Spartoo is in France a very interesting business case. A dozen of Spartoo’s stores are today opened in France. And according to the CEO of the company, Boris Saragaglia, opening stores helped them create value. In addition to that, all the stores will not have the same products in stock. A Spartoo store has, on average, more pair of shoes in stock than traditional shoes stores. And these shoes are only the products that make up the most sales in the catchment area. Of course the stores are fully connected and the staff walks around the stores with tablets ready to browse the website and order a pair which could be unavailable in the store. The client can pick up the product the next day in the store.
Creating a Brand Experience
For Jim Cusson, today online retailers can give you a lot a choice and prices but it is much more difficult for them to develop a brand experience exclusively online. Discovering a store or shopping in a store is also a social interaction that a lot of shoppers are looking for. And that’s exactly the recipe Warby Parker applied to the about sixty stores they have already opened in the USA & Canada. Everything starts with the atmosphere of the stores. The company created a real brand experience. To do so, the shops are built like bookstores and libraries with marble, dark wood, etc. The eye glasses are displayed on shelves and there sometimes are sliding ladders the staff can use. Since glasses are always tried on, the staff can enter the customer’s account and access the pairs they have saved online. The company is very customer centric, tests a lot and is very involved in the in-store experience. That’s how they discovered that customers prefer not to try on glasses on small mirrors but on full length mirrors.
In-Store Market Research
In order to improve their products, brands use digital but also in-store data. And M. Gemi fully understood this trend. The high-quality Italian shoes e-commerce website, M. Gemi, opened a shop in Boston. All the colours are available in the store but not all the design in every colours. The pair of shoes bought in this “Fit Shop” are delivered the next day. This shop allows the brand to have direct contact with the customers. You can book an appointment in the Boston store. Since the brand would like to launch new products every week, the data M. Gemi collects online and in-store are very useful for the brand strategy. According to Cheryl Kaplan, co-founder of M. Gemi, this direct link with the shoppers make them stronger because they create the new designs based on the discussion with the clients. And this method seems to be working well. A M. Gemi type client do four purchases a year!
Several of the aforementioned reasons influenced most of the Pure Players who opened stores. We also could have mentioned Amazon. They opened their first stores called “Amazon Books” in 2015! They sell mainly books there but they also display other products like the Kindle or the Amazon Echo. And already one year ago Amazon surprised us with their AmazonGo concept (details here) where they explained their no lines and no checkout technology. So, is Jim Cusson right? And would the most disruptive changes in retail come from the Pure Players? There definitely will be big changes but it’s maybe too soon to give an answer.