The Washington Post Spots a Trend: Online Retailers Are Now Opening Real Stores

Friday, 22 Aug 2014 10:40 AM

By John Morgan

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Online shopping may be the future, but in a trend reversal, some Web retailers are now moving into bricks-and-mortar locations.

The Washington Post may have spotted the trend in noting that online retailers such as jewelry seller BaubleBar recently opened a store in Manhattan. Designer clothing play Rent The Runway is doing the same, and handicrafter Etsy is making its wares available in Nordstrom stores.

“Upstart online retailers have emerged as a major challenge to traditional outposts such as Wal-Mart and Best Buy,” the Post reported.

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“Now, many are taking a page from their traditional competitors by offering an in-person shopping experience that can’t be mimicked on a tablet or smartphone.”

Some online retailers are trying to put a different spin on their physical outlets. For instance, online shaving product retailer Harry’s set up a barber shop in its New York SoHo location.

Online clothier Bonobos is opening small physical showrooms called Guideshops that allow shoppers only to try on clothes, then handles the sales online and the purchases arrive in the mail within two days.

“The company sells twice as many suits in Guideshops as on the Web and 50 percent more dress shirts. The company has slashed its online marketing costs in half as purchases have increased at the Guideshops,” the Post reported.

Simeon Siegel, a retail analyst for Nomura Securities International, said online retailers may be helping redefine how the retail industry thinks about brick-and-mortar outlets.

“Sales per square foot used to be the most important metric, and you’re now hearing managers shy away from that,” Siegel said.

According to the Post, that means the success of a store may be judged less for its income and more on its usefulness as a marketing tool for the brand.

A digital versus physical store location strategy can apparently work in both directions.

Trefis, a stock analysis site for professional investors, said Wal-Mart’s recent disappointing quarterly results show the bricks-and-mortar retailer needs to improve its e-commerce capabilities so that it has a fully developed one-two punch.

“Wal-Mart’s results confirmed that U.S. buyers are still not spending freely. Moreover, they are preferring online shopping over store shopping to avoid impulse buying. When shopping online, buyers usually stick to their shopping list. While this trend has hurt consumer spending at Wal-Mart, it has helped online sales of retail giants,” Trefis reported.

“Given that U.S. buyers are gradually shifting to online shopping, developing its web presence should be among Wal-Mart’s top priorities,” Trefis concluded.

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