Why brands are going from clicks to bricks
Is the retail apocalypse real? It’s clear that many brands would argue no.
Despite headlines proclaiming the death of malls, the demise of department stores, and the end of brick-and-mortar retail as we know it, store openings are still outpacing store closures, according to a June 2022 report by Coresight Research.
While some retailers are hedging their bets on smaller format stores, others are leaning into the “clicks-to-bricks” business model for the first time. Under this model, online channels (the “clicks”) are used together with offline channels (the “bricks”).
It’s a proven model used by the likes of Warby Parker and Fabletics to expand their businesses beyond the digital screen. While physical retail is certainly not the same as it was a year ago, it’s, as many would believe, still a force to be reckoned with.
A simple definition of the click-and-brick model
A click-and-brick model is an omnichannel retail strategy involving the marriage of online and offline retail. There are two paths that your business could take:
Clicks to bricks - This is when you take your online store into the physical world by adding brick-and-mortar locations. It also involves funneling online shoppers to your physical stores in order to see, try on, and purchase your products.
Bricks to clicks - The reverse of clicks to bricks, bricks to clicks is when you bring your physical store to the virtual world by learning how to start an online store.
Both paths take into consideration that today’s consumers often hop from one channel to the next. In order to capture and retain the most interest, you must meet customers on their preferred channels and allow them to decide when, where, and how to shop.
A clicks-and-bricks approach also recognizes a harsh truth: while eCommerce keeps growing year over year, it currently only represents 19.6% of all retail sales worldwide. That means that roughly 80% of all sales are conducted in person. So, establishing a physical presence to complement your online storefront could help you reach those offline customers.
4 factors fueling the clicks-to-bricks movement
To dive a little deeper, here are several reasons why the clicks-to-bricks model is growing in popularity.
01. The halo effect of physical retail
Physical retail has shown to have a halo effect on online sales, in some cases influencing 110% higher sales within areas where a brand has a physical location. According to another study by ICSC, when a shopper has a positive online purchasing experience, they’re more likely to spend money at the retailer’s brick-and-mortar location within 15 days.
02. Escalating online costs and competition
As more and more sellers have embraced eCommerce, customer acquisition costs (CAC) and digital ad prices have soared. Meta’s cost per thousand (CPM) increased 61% YoY, according to Insider, at the same time that TikTok’s CPM jumped 185% YoY. As it’s getting harder and more expensive to compete online, brands are turning to physical retail space to gain an advantage.
03. More affordable physical rents and available space
Business closures due to the COVID-19 pandemic increased the available inventory of vacant storefronts and led to rare decreases in commercial rents. Brands today have a better chance at snagging a prime physical location at a lower cost than in the past. This comes with a word of caution: inventory and rental prices will eventually normalize, with some predicting commercial real estate to rebound within the next two or three years.
04. High eCommerce return rates
A high rate of returns poses serious threats for pure-play eCommerce retailers. Last year, nearly 17% of all items purchased online were returned, amounting to more than $761 billion worth of merchandise that was sent back to stores or warehouses. Meanwhile, bracketing is on the rise, causing even more logistical nightmares for online retailers. Having a brick-and-mortar presence now only allows buyers to try on products before purchasing them, but also opens up the possibility of accepting in-store returns to reduce shipping and logistical burdens.
Brands embracing the movement
From SMBs to major brands, various merchants are experimenting with clicks-to-bricks strategies.
Among some of the earliest adopters: in 2018, DTC jewelry brand Mejuri opened up its first physical store in Toronto, followed shortly thereafter by a New York City location.
“We wanted to create a space where our community could interact with our products and with each other,” Mejuri co-founder and president Majed Masad told Retail Insider.
Today, Mejuri has eight physical stores in select U.S. and Canadian markets. Each store acts as a showroom, where customers can try on pieces that catch their eye and speak with a stylist. Some even feature a piercing studio.
“We found that bringing our brand to life in the form of retail has been a strong customer acquisition channel for us and great for loyalty, leading us to expand our retail footprint,” Masad said.
Fashion brand Everlane rolled out its first collections of ethically made clothing online in 2010. In those early days, founder Michael Preysman swore he’d shut down the company before going into physical retail.
Yet in 2017, Everlane opened its first brick-and-mortar location in New York City. While modest in size, Everlane’s stores have allowed the brand to reach new shoppers and driven by their customer’s desire to touch their products before they made a purchase.
“Our customers tell us all the time that they want to touch a product before they buy it,” Preysman told The Washington Post in an interview in 2017. “We realized we need to have stores if we’re going to grow on a national and global scale.”
Having tested various shop formats (pop-up, open houses, and more), Preysman remains committed to finding a more inspiring format for apparel shopping.
“If people are going to go somewhere, it’s because they want a connection,” he said to the Post in 2017. “If they’re just going to shop, they can do that online.”
Today, Everlane has nine physical locations in the U.S., with a tenth on its way.
The eCommerce behemoth itself has performed many experiments with brick-and-mortar locations over the years. To name a few: Amazon Go convenience stores, Amazon Books, 4-star stores, and Amazon Fresh grocery stores.
Most recently, Amazon launched a new Amazon Style store, the first stores of its kind for selling men’s and women’s clothing. Located in a popular outdoor mall in Glendale, California, Amazon Style lets shoppers scan QR codes to see available size, colors, and customer ratings.
Fitting rooms are also outfitted with touchscreens, through which customers can browse related items and request new items to be sent to their rooms. Through the Amazon Shopping app, customers can send items directly to a pickup counter as opposed to carrying products around the store themselves.
With a familiar cavalier attitude towards offline retail, Amazon writes, “Amazon Style combines Amazon’s love of fashion with innovative technology and world-class operations to help customers find looks they’ll love.”
4 building blocks of a successful clicks-and-bricks strategy
Whether you’re going from clicks to bricks or bricks to clicks, crafting the right strategy takes careful consideration and planning. Consider these foundational elements of any winning clicks-and-bricks strategy.
01. A reliable POS system
The right point of sale system will help you smooth out the many speed bumps that can bring a clicks-to-bricks strategy to a halt. First, it will give you a single place to process payments across your locations, including your online store, physical store, pop-ups, and more.
Secondly, it will simplify the checkout process for your consumers no matter where they choose to shop.
And, just as importantly, the right POS system will help you navigate the challenges of omnichannel inventory management. If your online and offline inventory software isn’t properly integrated, you run the risk of running out of stock unexpectedly and having to cancel (or delay) orders.
Wix POS is a good option for those looking to sell in store or on the go. With a variety of hardware and accessories to choose from, Wix POS can be tailored to businesses of any size.
02. Accurate data and reporting
When you run an eCommerce business, data is your best friend. It helps you know your customers’ behaviors and act upon them so that you meet your customers at their precise moment of need. The same is true when mapping out a successful clicks-to-bricks strategy.
Use your analytics to see which items are your most popular products in specific geographical areas. This will help you find the best state, city, or even street for your first brick-and-mortar store.
For example, let’s say you sell office furniture, and data shows that the majority of customers who purchase your desks and chairs work from home. Your data also shows considerable interest from consumers purchasing online in Arizona. This could lead you to determine that Glendale, Arizona—considered the best U.S. city for remote workers, according to Nerdwallet—is the ideal place to open your first physical location.
Moving forward, you can use data from your physical and online sites to determine which products to stock in your physical stores. Data can additionally reveal why consumers choose to visit your physical versus online store, giving you the information you need to optimize each channel.
03. Brand consistency
Consumers expect a seamless shopping experience. Meaning, you can’t just slap your brand name to the front door of your store and call it a day. Nor should you reinvent your branding just for your physical store.
Between your store decor, signage, product availability, and customer support, your branding should remain consistent. Customers should feel comfortable moving from one store (or site) to the next, never questioning if they’re in the right place.
Consider, too, how you don’t want your customers to be disappointed when walking into your store. Ensure that your store represents the full range of items available on your online shop, and think of promotions, services, or events that can keep people physically coming in the door.
04. Outstanding customer service
Both online and in-store, the quality of your customer service will make or break a shopper’s experience. Choosing to open a brick-and-mortar location means you must be committed to hiring and retaining employees who can positively shape the in-store shopping experience.
Brands that do this best will reap the rewards, as 50% of shoppers say that they’re more likely to visit a physical location if it means having access to personalized customer service.
With that said, retail faces notoriously high employee turnover rates (60%, compared with 19% across all U.S. industries). You’ll need to arm yourself with strategies to keep employees motivated, while simultaneously keeping your customers’ best interest in mind. In other words, establish a good system for training and holding staff accountable, while fostering an environment that’s welcoming and true to your brand values.
Should my eCommerce business go from clicks to bricks?
A clicks-and-bricks approach can help you increase sales and brand visibility, yet it isn’t right for every retailer. If you answer “yes” to any of these questions, then it may be time to investigate a clicks-to-bricks strategy further:
Do I sell products that most customers need to touch, feel, and experience to confidently purchase?
Do I routinely get inquiries like “Do you have a physical store?”
Do I deal with a high volume of returns, even though I’ve taken steps to mitigate them on my site?
Does a large cohort of my customers live in a certain geographic region?
Is commercial space available and affordable in the area where my customers live?
While getting your physical store off the ground will undoubtedly require hard work, the rewards could far outweigh the costs both in terms of sales and brand reach. For a more in-depth look at multichannel retailing, check out our guide.
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Editor, Wix eCommerce
Allison is the editor for the Wix eCommerce blog, with several years of experience reporting on eCommerce news, strategies, and founder stories.