Everything old is new again. That saying is true in fashion, in politics and even in the retail industry. 10 years ago, and even just a few years ago, it was much more affordable and strategically viable to connect with customers online, rather than opening a traditional brick-and-mortar retail location. But with rising digital advertising spends companies are seeing the Customer Acquisition Cost increase and spiral out of control. It’s pricey to acquire new online customers. So pricey that brands are looking to get back into the physical space and it’s a trend that’s already starting to happen. 

According to Forrester Consulting on behalf of Spotify 32% of brands said they’ll be establishing or expanding their pop-up and retail experiences in 2022. 31% of brands said they’d be expanding their physical retail store footprint this coming year as well. 

In this blog we’ll break down why brands are returning to retail space, analyze the ‘clicks to bricks’ strategy and see if retail is right for you.

Clicks to Bricks?

Clicks to bricks is the strategy of driving online shoppers toward your physical retail space. Simple, no? It’s a sales funnel/user journey that begins online and ends in-store. Brands allow shoppers the option of browsing an online catalog and purchasing or picking-up the item at your retail location. Combining both digital and physical retail gives retailers the best of both worlds while offering customers multiple ways to shop, based on their own preferences. It is estimated that eCommerce takes about 21% of all retail sales, so going retail-only isn’t advisable either. Clicks to Bricks is gaining in popularity because of the flexibility it offers customers and the impact it has on a brand’s bottom line.

The benefits of a clicks to bricks strategy

Customer acquisition costs (CAC) are rising, and fast. You’re not the only company in the world trying to grow their digital presence, space and revenue. As more and more businesses enter and expand in the digital space the cost of getting yourself in front of customers only increases. Simply put there are now more businesses vying to fill up and exploit the already-limited digital advertising channels. But as Google is charging more and more for ad space on their platform, retail rent is remaining steady, and in many parts of the country, available at a dramatic discount. (Retail rent can and should be included in your CAC.

Your online store opens up your customer base to potentially a worldwide audience, but many customers still enjoy and prefer the simple act of visiting a store. This is especially true for clothing and fashion retailers. No matter how flexible and easy a clothing retailer’s digital return policy is, it will never replace the physical act of trying on the clothes yourself, making sure it fits just right or confirming that it does not. Having a local brick and mortar location is still a good thing. According to the Forrester Consulting study, partnering with Shopify, nearly half (47%) of customers said that a local presence was a ‘significant’ or ‘very significant’ influence on which brands they have chosen in the last 12 months.

Clicks to Bricks Challenges

Of course there are risks involved with opening and maintaining your brick and mortar location. Let’s take a look at a few:

Hiring and retaining employees – As if it’s not enough to worry about your retail space, your POS system, your inventory,  maintenance and overhead but you also have to worry about employees. In any brick and mortar location they are going to be the living embodiment of your brand and the first interaction many customers will have with you. Not only do they need to be competent in their jobs and interact well with customers, they also need to actively champion and embody your brand’s values. This is easier said than done even with years of retail experience across multiple franchises. 

Brand Consistency – For a brand moving from the digital space to a physical retail space you will need to take the digital culture you have built and manifest it into the real world. For any digital brand, customers must feel that your retail space is your digital brand, manifest into reality. That applies to your products, store layout and even your employees. If your website and brand are more on the serious side, then your physical space needs to reflect that in its design and layout. While a more ‘lighthearted’ product or brand can afford to have a more playful and bright retail layout. The most important thing to know is your brand identity. Without that, you can’t begin to manifest correctly in the real world.

Omnichannel inventory management

Just a short time ago we dedicated a few blogs to the applications and extensions that are currently available to build and maintain a better Onmichannel system. To learn more about which extensions our expert Development team works with and recommends check out the blog, “How to Integrate Omnichannel Management in Your Magento Site”. While the blog title may be seasonal there are extensions and inventory management tactics that are evergreen in our blog, “Building a successful holiday pop-up shop”.

Who is doing it right?

Casper Mattress is an excellent case study for retail success. The mattress store started off as online-only. But, like many products, there is no digital substitute for actually trying it out for yourself and feeling the bed underneath you. You can’t lay on a mattress that’s on your desktop screen. 

Casper is the go-to case study for direct-to-consumer business owners. 

“Customers are going to do their own research,” said CEO Philip Krim. “They’re walking into stores to aid their education. Oftentimes those are happening at the same time. People are on their phones reading about products while looking at them on the shelves.”

While incorporating a physical retail space into their business model, Casper now boasted multiple touchpoints and the capability to engage with customers in their preferred manner, whether that all-online, all- in-person, or some combination. They embraced a strategy that was ‘channel-agnostic’ and embraced the retail portion of their business model. In a relatively short amount of time Casper has now expanded to more than 70 retail stores across the country and experiential retail now plays a huge role in their stores and strategy. 

Philip says. “We’re just as happy if you buy Casper products through one of our retail partners as we are through our retail-owned and -operated stores, or on our ecommerce store.”

Bringing it all together

With customers longing for great retail experiences and a return to normalcy, coupled with the sinking costs of retail leasing and rent, now is the perfect time to get back, or get into the retail space. But there are obstacles in the way. Good thing that we’ve been working with brands for more than 20 years to expand and improve their offerings and capabilities. Message us today and let’s get started.

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