Digitally native brands killed single-channel selling

There was a time, not so long ago, when we talked about different, segregated sales channels: brick-and-mortar and online. And we saw how “online pure players”, with Amazon as their flagship, disrupted the retail foundations, threating legacy business models. The list of traditional retail brands going to bankruptcy began to be significant. The apocalypse of (brick-and-mortar aka traditional) retail was here. There were even some store closings counters that monitored this phenomenon.

But, in 2011, online pure players started to have a physical footprint. Companies like Amazon, Bonobos, Casper, Everlane, Glossier,… which all were success stories of online retailing, opened stores, in many formats. The “online pure player” naming was over. We started talking about “digitally native” brands.

Paradoxically, over time it seems that the success of online is rising brick-and-mortar from the dead…

But which are the key levers to make online-only brands turn their eyes towards brick-and-mortar? Here are a few:

  • Inspiration: Only brick-and-mortar shoppers can physically touch, see, feel, smell, and even wear the product

  • Personalization: Building intimate relationships needs a “human touch”

  • Transaction: 85% of total retail sales are converted through brick-and-mortar

Just a fact of the value of brick-and-mortar: in 2017, 67% of US online brands opened retail stores.

As most of digitally native brands revenue base comes from online, their main goal when going physical is not direct conversion although it may apparently seem attractive enough to make this move. Instead, they are investing in making the physical channel either a way to increase awareness or a way to consolidate their value proposition. Experience and community are the hot topics nowadays.

This new in-store experience is based on principles such as:

  • The wow effect: the ability to surprise your audience

  • Show you know me: hyperpersonalized interaction

  • Uniqueness: develop unique store concepts

  • Sensorial experience: the power of touch and all other senses

  • Make it scalable and repeatable

By combining technology and data-driven customer insights, some pioneering brands are able to create completely new, innovative experiential contexts where supercharged assistants bring the human touch to close the customer experience loop. In the case of digitally native brands, they tend to start by launching pop-up shops before deciding to invest in permanent brick-and-mortar stores.

The number of experiential stores is rapidly increasing, and it is not exclusive to digitally native brands: from Warby Parker’s Green Room store that pays homage to Hollywood movies, Casper’s The Dreamery nap showroom, Canada Goose’s Cold Room to test its jackets, to Nike’s by Melrose Live store or Nordstrom Local stores. They all make their specific interpretation of what the new in-store experience means to bring something that makes those brands as destination for their target segment of customers.

Given this, the only truth is that digitally native brands killed single-channel selling but physical retail, no matter how we call it, from brick-and-mortar stores to physical touchpoints is not dead, just evolving.

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