Do Online Brands Need a Physical Location?: Q&A with BookingBug

There has been a clear trend in the retail industry of online-only brands investing in brick-and-mortar. In the past month alone, we’ve seen brands like WayfairParachute, and Fabletics announce plans to open physical locations. In this Q&A with RetailTechNews, Hayley-Jayne Cone (pictured below), chief customer officer, BookingBug, goes into detail about why were are seeing this shift. 

RetailTechNews: Why are we seeing an increasing number of e-tailers opening physical locations?

Hayley-Jayne Cone: Retailers that are digital-only have an opportunity to learn a lot of valuable information about their customers. They are able to determine what their customers want and their purchasing behaviour before investing in a physical location. Having this ability to think strategically about what your customer might want before committing to a brick-and-mortar presence is much more effective than trying to catch up after the fact – the changes are much less costly and simpler to back out of if they don’t have the desired effect. We’re seeing e-tailers open physical locations in order to use this data to their advantage and provide a holistic customer experience that bridges online and offline channels.

Hayley-Jayne Cone, Chief Customer Officer, BookingBug

Do you think this trend will continue, even with technology such as augmented-reality online fitting rooms?

Yes, I suspect this trend will continue. While customers are increasingly ‘digitally native’, it doesn’t mean they’ve lost interest or care less about the in-store experience. In fact, it just means they expect more out of both channels. Brands that are to succeed are the ones that provide convenience, flexibility, and a frictionless experience to consumers across all channels (i.e. order online and pick up in-store). Retailers must have a physical presence to offer the level of convenience that today’s consumers are looking for.

Will these new stores represent a significant sales channel for e-tailers, or rather a location where shoppers can ‘experience’ the brand?

I think it will be both. For brands that used to be digital-only, the physical location will serve as a manifestation of the brand image and a destination for shoppers who have followed the brand up until that point. If the in-store experience matches or exceeds consumer expectations, it will become a significant sales channel. However, stores must balance price, service, and quality to gain repeat customers.

What are the challenges facing online-only retailers looking to develop physical stores?

Online-only retailers that open physical stores will face a lot of competition. They will need to ensure that they employ strategies that set them apart from other brands, such as hosting events or offering personal styling sessions. More practically speaking, not all e-commerce brands will be able to afford opening physical locations. As retail space becomes more sought after, prices will rise and be out of reach for some smaller e-retailers. 

With the high street in decline, what must the new stores offer shoppers if they are to buck the trend of closing stores?

As mentioned, retailers must offer something different to shoppers to stand out from the pack. Hosting events or offering personal style sessions are both great ways to attract potential customers and engage with them in a unique way. Retailers must find ways to connect with shoppers in a manner that is new and different in order to provide a quality customer experience and form lasting relationships. Additionally, retailers need to get the basics right. For example, choosing the right location, having parking options available, maintaining inventory or ensuring that employees are well-versed on products. With rising competition across the board, consumers will remember if your store didn’t have their size or an unhelpful employee left a bad impression, and they will be more apt not to come in again.