The return of bricks and mortar? Startups leveraging omni-channel retail strategies

The changing dynamics of omni-channel retail strategies

Websites and e-Commerce sites used to serve as a tool to drive customers to bricks and mortar stores. As the internet has prevailed, however, that power relation has also changed.

Today, bricks-and-mortar business models seem to be making a comeback as many innovative startups are moving back to the traditional channels.

But does this trend signify the return of physical stores on the one hand and the decline of eCommerce on the other?

How exactly is online-offline retail strategy relevant to today’s digital age?

‘An online-to-offline strategy is broadly defined as an integrated, multi-channel plan of action designed to utilize online assets to re-establish in-store value with a view to increasing revenue.’

Consumers are increasingly tech-savvy and have easy access to more information, rendering traditional retail experiences irrelevant and static. They seek for information that could influence their purchasing decision online, and at the same time expect extraordinary in-store experiences.

While long-standing fashion brands may have advantages in building seamless omnichannel experiences, innovative startups are also bringing fresh ideas of combining the best bits of two different worlds. In this article, we look at 3 interesting case studies where brands are capable of utilising the given resources to deliver optimal offline and digital experiences.

• Warby Parker’s story

‘Some retailers are moving in the opposite direction: They begin online and expand into the offline world, interacting with customers through stores or showrooms.’ (From Kellogg Insight)

As people familiarise themselves with online shopping, it is no surprise that many young companies begin their businesses exclusively from online.

Founded in 2010, Warby Parker offers affordable designer’s eyewear via its stylish eCommerce site. While the transactions remain online, it has also successfully expanded offline by opening showrooms in various cities.

Just like clothes shopping, it is important to know how it feels like when putting a new pair of glasses on for the first time. Inevitably, choosing the right pair of glasses is determined by the ‘look and feel’ for many customers. Despite Warby Parker’s unique business model of ‘home try-on program’ where consumers can order and try up to 5 samples for free before deciding on which ones to buy, the brand also acknowledge the clients who are less comfortable with online order.

The most effective way to appeal to those customers is to turn to physical showrooms, where customers can engage with a product before ordering.

While minimising the drawbacks of having bricks-and-mortar stores (issues often involving inventory), Warby Parker attempts to incorporate the advantages of display-only showrooms into its online business where customers can touch and feel the products in person.

The results have been rather positive: a quick surge in demand and sales.

But truly savvy companies don’t just stop there.

Following the pop-up showrooms across different locations, WP then compares the buying behaviours according to different zip codes. By doing so, the researchers were able to ‘weed out the effects of factors like new eyewear collections or seasonal shopping’ (Kellogg Insight).

• Grana’s story

Grana is another brand that embraces the benefits of two worlds.

Inspired by WP, this Hong Kong-born eCommerce brand is proud of their price competitive and simple-looking yet premium-quality fashion through working directly with fabric manufacturers. From fashionable T-shirts to jeans, the brand has already shipped their products to Australia, Europe and the North America.

They are well aware that physical shops remain vital as in-store consumers are more valuable than their online counterparts.

Unlike Warby Parker, Grana faced one major obstacle. With the eCommerce market being nearly “non-existent” in Hong Kong, the company had to start from educating the customers.

Unlike in the UK, “people [in Hong Kong] don’t trust brands that sell exclusively online, […] There’s no habit of buying in bulk and returning what you don’t want.” said the communications director Crystal Chen.
Given the high rental costs and the absence of online shopping culture, pop-up stores have helped the brand tremendously in raising the brand awareness and the concept of online shopping.

• Bonobos’ story

Hybridising online and offline shopping experience has also been the primary focus for Bonobos, specialised in tailored suits.
‘Bonobos excels because it initially focused not on product or on distribution, but on the customer first.’
As our early post on menswear eCommerce has pointed out, online shops catered for the millennial male customers need to understand the unique needs and challenges of their male shoppers: hassle-free and time-efficient shopping experience.

(Bonobo’s eCommerce equation: Image via cargocollective.com)
Knowing that men are generally more loyal to brands offering ‘fit’ rather than ‘trendy’ clothing, Bonobos’ eCommerce business focuses on the two most crucial factors: perfectly fitting trousers and perfectly timed delivery.

With customer experience at the heart, how is this startup utilising both channels?

In addition to its seamless purchasing and delivery process, they also address the desire of some customers to touch and feel the products before purchasing online. This is where their offline Guideshops come in handy as shoppers can easily book one-to-one fitting sessions on the website.

Taking the hybrid approach

Today’s smart businesses recognise the gap that exist between two groups of consumers – those who are rigorous online shoppers and those who are less comfortable giving out their personal information online. In fact, the in-store customer is four times more valuable than the online counterparts.

They are also highly aware of the pros and cons of both channels, and, therefore, take a hybrid approach. The strategy has allowed the companies to ‘expand product offerings, capture ancillary consumer purchases’, diversified the customers’ experience while helped to form better relationships.

No matter how technology gets advanced, the human-to-human connection will never lose its significance. While going digital is becoming the synonym of maximising the efficiency of running a business to make profits, physical stores still retain the key advantages in building and nurturing customer relationships.

The ultimate customer journey

More and more brands and businesses will need to think in a big picture, incorporating two unique realms. From raising brand awareness to post-purchase customer relationship, online-to-offline user journey has to be seamless and personal to keep customers enthralled.

So does your business smoothly navigate your customers from offline to online, or vice-versa?

What do you think?

Appnova is a digital agency specializing in web design, UX, e-commerce, branding, digital marketing and social media.

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