Monday, 20 June 2016

Do online stores need a physical presence?

Many online stores have, since their first days, been digital only, without a physical presence on the high street or in the shopping centre.

The obvious example is Amazon, which pioneered online-only retailing and is making a major marketing effort in the UK to sell groceries online. But in the US, Amazon is currently experimenting with book stores in two locations, and planning additional book stores in the future.

Amazon can learn a lot about shoppers by observing how they browse, what catches their attention in the store, what sells well in a store compared with online only, and so forth. It can also experiment with covers, shelf placement, pricing, adjacencies and other details.

In Canada, several online-only retailers are opening physical stores. The goal is to provide a physical space in which to express the brand image and showcase branded products. Indochino, which originally marketed online-only bespoke men's wear, now generates half of its turnover from the physical stores it operates.

Even brands that sell through other retailers are opening their own branded stores. Upmarket outerwear company Canada Goose, well known for its goose-down jackets and other apparel, is opening its own stores in New York and Toronto.

As the global economy improves, will more online-only retailers become multichannel?