Today’s shoppers are more sophisticated than ever. They expect an efficient, seamless, and highly curated (bespoke) shopping experience that’s consistent across all channels of brand interaction. The customer has more touch-points on a path to purchase and therefore requires more information about each step. In the age of newCommerce, the strongest and most relevant retailers are those able to successfully marry a physical store presence with a solid eCommerce strategy. It’s no longer a case of bricks-and-mortar versus online sales – the two are now fully integrated and brands are focused on maximizing total volume as opposed to analyzing performance independent of one another. In this new retail landscape, pure players – those brands borne of eCommerce – are poised to leverage their established digital presence to inform real estate strategies that speak to their unique understanding of their existing and target customers.
To do this effectively, several considerations must be analyzed by pure players prior to launching a bricks-and-mortar retail strategy. The following three steps must be achieved in order to move forward effectively at the beginning of the journey:
Step 1: Aligning with the right team. The first, and perhaps most important, is creating an internal team that supports and integrates all aspects of the retail business. Expertise, analysis, and consultation will strategically align the right internal and external partners required in early stages of the process. This includes determining the mission of the brand, defining product offering and concept development. Testing products, advertising, and delivery options will help determine future considerations around product design and materials sourcing.
Step 2: Capturing customer data from day 1. Understanding the path to purchase means deriving the right customer analytics. While it is imperative to set up a data collection system that is equipped to capture customers’ movements from all portals into your brand, it’s just as important to select the best talent to analyze the data that comes in. This means aligning your marketing team and advertising initiatives with your predictive data analytics team. Integrated data systems can better educate the brand about the customer. It is an opportunity to maximize interaction, create the right experiences for your customer, and invest in the right kind of advertising.
Step 3: Optimizing your distribution network. The next critical element relates to merchandising and inventory. How a pure player creates a distribution network to deliver goods to its customers is, arguably, one of the key determinants of brand loyalty, quality, and trust. This distribution network will evolve to eventually support physical store locations. In the age of newCommerce, a brand’s supply chain must be flexible, agile, seamless, and equipped to accommodate a demanding consumer that values speed. The manner and frequency with which product is fulfilled to a customer’s doorstep will impact where future stores should be located. This will then impact a longer-term real estate strategy as the brand matures from selling exclusively online to both online and in-store. It is therefore imperative to develop a fulfillment strategy that meets customer expectations, while aligning the brand with the potential for fast-paced growth. Operating and executing consistently is an expectation of today’s consumer and directly linked to customer satisfaction and loyalty.
A brand that originated in eCommerce has a distinct advantage in developing a store expansion strategy in that they often possess a significant amount of historical data. “Clicks-to-Bricks” companies are often able to utilize extremely valuable data about their customers gathered through their online channel that proves instrumental in determining the viability of a market for a new store. However, while leveraging this data is critical to success, it isn’t the only factor in site selection. To succeed as a bricks-and-mortar retailer, it is imperative to understand the nuances of each potential location, the market dynamics, the brand’s core customer and the interaction of online sales and the customer’s path to purchase.
As the retail industry continues to transform, pure players, like traditional retailers, will need to continue to evolve and adapt. Advancements in technology create both challenges and opportunity. Seizing that opportunity and ultimately becoming a viable and sustainable retail brand will largely be determined by those able to integrate and maximize their performance both on and off line. Those pure play brands that transition successfully into bricks and mortar retail will likely be those that most effectively utilize the information and data gathered in the past to inform their future.
Tune in to Part II of this newCommerce series on Pure Players to Bricks-and-Mortar where we delve into the process of how these clicks-to-bricks retailers effectively integrate their richest tool – their data to support strategic decision-making in real estate expansion planning.
Michael O’Neill is an Executive Managing Director for Cushman & Wakefield’s Retail Services. His notable experience with Pure Play brands includes his representation of UNTUCKit—where he advised on their first bricks-and-mortar store and has since represented the digitally native brand in securing more than 20 new stores nationally along with consulting and advisory services. Additional clients include Muji, Vince, Lacoste, JPMorgan Chase Bank, and Forever 21 as well as several other retailers and notable Landlords.
Jalna Silverstein leads the Retail Consulting team for Cushman & Wakefield’s Retail Services, Americas. She has extensive consulting experience with retailers who seek specialized solutions in commercial real estate—for all stages of growth from brand development to store expansion and optimization. Most recently, she has helped digitally native brands like UNTUCKit, navigate location decisions. Additional clients include Giorgio Armani, Crate & Barrel, Nike, Cole Haan, and Lacoste as well as other retailers and investors.