Online retailers trending offline

August 22, 2014

E-commerce retailers are taking a step back in time and opening brick-and-mortar shops.

E-commerce retailers are taking a step back in time and opening brick-and-mortar shops. 

Moving to a physical location is a new way for online retail companies to create a buffer zone between themselves and competitors overflowing the e-commerce market, according to the Boston Globe. It is also a way for these businesses to grow their revenue in a market still dominated by traditional retailers – despite the rapid growth of e-commerce. 

“It’s all about having the online retail world figure out, ‘Maybe we can showcase our products better in store,'” Marshal Cohen, chief industry analyst for NPD Group, told NewsFactor Network. “We are going to use retail as a way to eliminate some of the challenges online has because you can’t touch and feel and smell and taste.”

So far, only a small group of e-commerce companies have opened up physical shops, according to the media outlet. However, the movement so far is a sign that some online businesses have acknowledged that there are consumers who still prefer to shop the old-fashioned way. 

Startups are going physical
E-commerce companies are noticing the kind of difference that a physical shop can make. Internet jewelry retailer BaubleBar recently opened a shop in Manhattan, and in-store consumer habits are vastly different than their online shopping preferences, the Boston Globe explained. The less gaudy pieces received more attention in the brick-and-mortar shop than they ever would online. Shoppers in the BaubleBar shop purchased three times as much as they would online, cofounder Daniella Yacobovsky told the newspaper. 

”Having the opportunity to touch and feel our product is a big value,” she said. 

Birchbox, an online beauty retailer, also recently opened up a physical store, in New York’s SoHo neighborhood, the New York Times reported. The company’s website uses a questionnaire in order to identify products that the customer would be interested in, then ships out a box full of samples. 

At the Manhattan location shoppers can fill out the same questionnaire, and give employees their email addresses. In addition, customers in the store are allowed to try out the featured products at their convenience. 

“There is still this desire to work with somebody that you really trust,” Katia Beauchamp, a founder and chief executive of Birchbox, told the New York Times. “You probably trust the consumers and the overwhelming number of consumers who are like you, and who are then buying something.”

Rent The Runway, a company that rents designer clothes out by the day, will soon open a shop in New York City, the Boston Globe noted. In addition, products from online marketplace Etsy will be sold in independent boutique and some major retailers. 

?The omnichannel shopping experience
Omnichannel shopping, or a combination of online and offline shopping, has become a popular concept in the retail world. In fact, 50 percent of offline transactions will be preceded by digital research or shopping in September 2014, according to a report from L2.

The report found that retailers such as Macy’s and Coach have taken advantage of their physical presence in order to outperform online retail giants such as Amazon. Still, not every retailer has tapped into the potential that omnichannel retailing holds. Only 6 percent of the retailers tracked by L2 had online inventory visibility implemented, and a mere 26 percent allowed for in-store pick-up of packages. 

“Omnichannel success requires retailers to use technology and data to deliver real value to shoppers in terms of convenience, experience and connection. There is a sea change occurring in retail as merchants tap into personalization, location data and new devices to deliver real-time experiences that support the shopper in her goals,” Diane Kegley, CMO of  RichRelevance, said according to L2. 

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