The retail landscape is shifting profoundly in an era dominated by e-commerce and digital marketing. Brands are re-evaluating their strategies; for many, the focus is returning to the physical store. This change isn’t merely a nod to nostalgia; it’s a strategic move based on tangible benefits that stores offer, often overlooked by digital platforms.
The Website Is No Longer Unique
When it comes to websites, virtually every brand has one. As Jason Reidel, CEO at Gorjana, aptly notes, “I love the fact that it’s become completely accessible to everyone because, as an advocate of entrepreneurs, I love that someone can have a cool idea and slap up a Shopify website. From that standpoint, I love that it’s all become commoditized, but I am looking at our business now, and everyone can do it, so it’s really not that special.”
The democratization of e-commerce platforms has undoubtedly spurred innovation and competition. However, it has also led to an overcrowded online space. What was once a thrilling frontier is now a saturated market, making it increasingly challenging to stand out. Even younger generations have proven to continue to be in-store shoppers; an ICSC Gen Z report from earlier this year cited 97% of respondents shop brick-and-mortar, with over 35% of those due to the experience and ability to see, touch, and try products.
Brands realize that a website alone no longer offers the unique and engaging experience it once did. Instead, they’re turning to physical stores to provide a distinct environment where customers can interact with products in a way that’s simply impossible online.
Canada Goose is another brand that has embraced this advantage of stores. It recently opened its 12th and 13th permanent stores in the US in Phipps Plaza and King of Prussia, and it plans to hit 65 stores globally early next year. It’s grown its retail channel to 70% of its total business and has evolved from being a manufacturer and wholesale brand to a DTC and retail brand.
“We’re focused on stores as part of our global growth plan for two reasons: they’re where we bring our brand to life and where we can be closest to our consumers. The key to success in this channel lies in the experience – that is, the differentiator, especially for luxury brands. To win here, you need to deliver an experience that is unique, elevated, and authentic. From our Cold Rooms to our inspiring in-store Art Program, to the service our Brand Ambassadors deliver, Canada Goose is an early adopter of experiential retail,” stated Carrie Baker, President of Canada Goose.
Stores Are Both Transactional And Marketing Channels
Similarly, while online platforms excel at transactions, they often struggle to offer the same immersive marketing experience as physical stores. In-store experiences can be meticulously crafted to engage customers on multiple sensory levels, leaving lasting impressions that extend far beyond the initial visit and significantly boosting overall business revenue, making them both a transactional and marketing channel.
Victor Tam, co-founder and CEO of Monos, a luxury Canadian luggage brand, emphasizes, “The store is a crucial part of Monos’ omnichannel experience that helps us engage new and repeat customers. We see the retail store as part of our larger strategy to become a legacy travel lifestyle brand; brick and mortar is tried and true.”
Moreover, the surging online marketing costs further highlight the value of in-store marketing. Last year, the cost per thousand impressions (CPM) saw significant spikes, with a 64% increase on Snapchat, 89% on Facebook, and 92% on TikTok. These substantial hikes underscore the financial strain brands face in online advertising.
Stores Are Profitable Growth Engines For Online Sales
Contrary to the common belief that online sales are the primary revenue driver, stores have proven profitable and instrumental in boosting online sales.
Tam shares Monos’ success, stating, “Our flagship store has been open for three months, and we have accomplished approximately double what we had forecasted. On our site, we have seen a steady increase in web sessions in Vancouver and the surrounding areas coinciding with the store opening, showing an increase in overall brand awareness due to our new physical presence.” This confirms the revenue contribution and a sales lift to the online channel.
This synergy between physical and digital channels creates a robust sales ecosystem. Customers who visit a store often continue engaging with the brand online and vice versa. This cross-channel behavior leads to increased customer loyalty and higher lifetime value.
In addition to the impact on other channels, many brands find that stores alone can be incredibly profitable. The resurgence of stores and retail in the brand strategy is not a mere nostalgic whim but a calculated response to the evolving retail landscape. As Reidel of Gorjana succinctly says, “We really are a retail business, and we’re a profitable business.” This sentiment echoes the growing consensus among brands that the physical store is not just a relic of the past but a vital asset for the future.
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