If it worked for Warby Parker, Allbirds, and Casper, it could work for you. These companies are well-known ecommerce brands that took their strategy in the opposite direction: opening brick-and-mortar retail stores.
This seems counterintuitive, as the promise of the internet was that retailers would do away with physical stores altogether.
Yet this strategy has taken hold among dozens of ecommerce merchants looking to add another sales channel that can contribute to profitability.
“Building relationships is now vital to growing a brand. This isn’t always easy for a business that sells exclusively online,” notes Kabbage. “The ‘human touch’ often doesn’t translate across the internet.”
What are some considerations for an ecommerce merchant before attempting to add brick-and-mortar locations? Let’s have a look at several.
Having Enough Product
The most important thing to consider is whether you would have enough product to support both your own ecommerce sales and wholesale to retailers.
“You don’t want to find yourself in a position where you can’t ship your own sales because of fulfilling wholesale requests, or not being able to supply retailers because you’ve sold too much online,” cautions Shopify.
Pricing and Profitability
In addition to issues related to production and volume, you have to consider how you will price your goods once you decide you want to place them on the shelves of retailers.
It may have taken you several years to find the right price for your goods — price points that, when manufacturing and procurement, marketing, and logistics are taken into consideration, deliver you a profit. There are additional factors to consider when going to physical locations, such as shelving or slotting fees to ensure attractive placement for your product, or additional logistics to the retailer’s warehouses.
Of course, if you decide to open up your own retail space, there are costs related to rent, utilities, staff, and other considerations.
Another operational issue to consider is customer support once your products are sitting on a retailer’s shelves. While the customer most likely will bring the item back to the store for a refund or exchange, you might also receive quite a bit of messaging — to your website or social media channels — if a customer has a question about a product. You will need to decide how you will divide and conquer any customer-care issues that might arise once you sell through additional channels.
In order to have more control over the brick-and-mortar experience for your products and brand, it’s best to approach smaller stores and chains. If there are issues, the owner has a direct line of communication with you.
However, as you grow, you might want to cast a wider net to find potential retailers. Consider joining an online wholesale marketplace, such as Shopify’s Handshake platform, where you can list your products for potential distributors to find.
Testing by Going Pop-Up
Still not sure whether brick-and-mortar retail would work for your products? Try it out — temporarily.
Consider renting a booth at a farmers market, county fair, art show, or flea market. Larger venues, such as concerts, stadiums, universities, and churches, may offer more elaborate pop-ups in the form of a container or dedicated space. Going pop-up before full-on brick-and-mortar can provide you with customer feedback and market research, especially regarding pricing.
Still unsure whether to go brick-and-mortar? Contact Hawke Media’s ecommerce strategy team to discuss what the best options are for you. We’ll evaluate your current strategy and help you make the move to physical stores.
Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, he covers such topics as security, mobility, ecommerce, and the Internet of Things.