More E-Commerce Retailers Are Opening Brick and Mortar Stores
A decade ago, it was feared that the internet would be the death of traditional brick-and-mortar. Funny how things turn out. These days, e-tailers—retailers that exist only online—are starting to show up in real life. Even Amazon, the one e-tailer that significantly disrupted a traditional market – bookstores – is increasing its investment in brick-and-mortar stores.
Given that this market shift is only a few years old, it’s perhaps too soon to look at how much revenue e-tailers’ B&M sites are generating, because each company faces a different bottom line and has unique goals. But one thing is for sure: These outposts largely serve as marketing vehicles, increasing awareness and drawing in new customers. The online world has become overcrowded, and it’s increasingly expensive to appear at the top of web searches. Most e-tailers can’t afford to compete with big retail. For example: According to research by L2, Macy’s and Nordstrom each spent at least $4 million in the first quarter of 2015 for paid search listings for the top 1,000 apparel-related keywords.
But there’s another factor at play here as well: The increasing maturity of consumers’ relationships with the brands they choose to support. People care more about the stories behind the products they purchase, and a sense of connection. Brick-and-mortar e-tail looks to deepen that relationship between brand and buyer. Retailers and e-tailers both wants a seamless, omnichannel experience for customers, but brands like Warby Parker, Bonobos, and Blue Nile are finding ways to meet them in interesting and individual ways, from innovative marketing events to concept stores and pop-up kiosks.
The effects of this shift on big retail can already be seen. Department stores are now aggregating smaller groups of brands within them, looking to create curated experiences. Everyone is seeking to satisfy a new kind of customer that moves fluidly between digital and real-world experiences. For now, e-tailers are looking to identify themselves in a market that wasn’t necessarily built for them, and shaking up things in the process.