Well known online brands are opening shops! Well at least they are in the USA. Most of us will be aware of Amazon’s grocery stores and their newly launched Book stores, and will not know of the likes of Fabletics, Bonobos and Warby & Parker, as they are American online retailers who have started opening stores within shopping malls as a way of developing their brands in a more cost effective way in the face of the extremely high costs that are associated with web site marketing.
Will it cross the Pond? I can’t see why not. I go further and say it is inevitable. Despite politicians constantly rabbiting on about Online operators not paying any taxes and having unfair advantages over High Street retailers, apart from a handful of giant operators, they are oblivious to extraordinarily high costs involved in getting to ‘market’ and worse still staying there.
What this illustrates is that consumers like going to shops . For the online retailer it gives them brand exposure at a lower cost , and ‘real’ contact with their customers. Whilst I suggest it is not scientific yet in their analysis, initial findings by the US retailers that have pursued this route are very positive. Those selling clothing have reduced their returns, increased their exposure and found unexpected benefits, such as customers coming into store ordering more that than would have done through the web site , because they have seen, touched and tried on product in addition to being delighted as they don’t have to cart the stuff home (apparently particularly true of men).
Recent news over the Christmas period of the failure of the likes of HMV,and the relative success of Next only go to reinforce this potential trend . Both retailers have ( or had as with HMV) stores and both have online operations . With HMV both were poor , as opposed to Next , who with long experience of ‘Distance Selling’ with their catalogue understand who their customer is, what they wanted and the way they would buy it , sadly HMV didn’t. I digress slightly, but only slightly. I believe the Next is or about to change their free returns policy. If you want to return FOC, you have to take it back to a store. This not only reduces a cost but gets the consumer back into a store where they are more likely to make a further purchase.
Amazon(it’s that name again) have also announced that they are planning to open more food stores in the US. And this indirectly, is another reason why Etailers are having to look a different routes to market. Because the constantly increasing influence of Amazon, and many sellers who use Amazon as their main route to market are aware that they must be looking for additional solutions. And here is another frightening statistic 40% of new sellers on Amazon Europe are based in China (and Hong Kong) . source:ECommerce news Europe.
The image below is not great but the picture is clear (the blue portion is the Chinese share)
What is also striking is the similarity in percentages.
So are clicks and bricks becoming one ? Not entirely but of all the Online operators I know there is not one that is not looking at different routes to market .They are all looking at improving and developing their own web sites but they are all aware of the huge costs involved and know that this is cannot be the only alternative.
Hackneyed a phrase it maybe, but all forms of retail are undergoing change at a rapid rate. Change is not new , in the 14th century there were nearly one hundred and forty shops on the original London Bridge and eight hundred years later not even the bridge exists. Which goes to show absolutely nothing, but I just like the fact ! I am not sure even the most knowledgeable of retail analysts or retailers themselves know how retail will develop in the next eight years let alone eight hundred. Yet , I am absolutely sure there will be ‘shops’ but perhaps not quite as we know them .