Rachel is an account manager at Vovia with a background in the exciting world of websites and digital project management. When she's not analyzing reports, strategizing with clients or crunching numbers, you can find her enjoying hanging out with her family and friends, exercising, creating a new salad mix for lunch or travelling.

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The Mall Revolution: Direct to Consumer Retailers & Brick-and-Mortar Innovation

We’ve been hearing for a long time that brick-and-mortar stores are dying, and that malls are becoming a thing of the past. From the death of big-box retailers like Zellers, Sears, or K-Mart and the struggles of long-standing retailers like Hudson’s Bay and the Gap, to the dramatic increase of online sales and direct to consumer retailers, you might be wondering if there’s any money to be made in physical stores? No wonder so many familiar mall retailers and big-box stores are closing, right?

For lease sign in empty store

With the margins that can be achieved in an online-only environment and the ease of buying online coupled with two-day or even same-day delivery (thanks Amazon Prime!), it makes sense that retailers might struggle with making physical stores ‘work’ in this day and age.

Don’t be so quick to dismiss that in-person shopping experience though; Brick-and-mortar stores are here to stay (for now at least), and surprisingly what used to be online-only retailers are the ones helping to keep to fill the void.

These retailers might be considered ‘new’ to mall shoppers, but not to the droves of online customers that have shopped with them for years. In the last few years, there’s been an emerging trend of online-only, direct to consumer (D2C) retailers opening up physical, brick-and-mortar locations to customers in both Canada and the United States. These are well-established online retailers bringing their online shopping experience into the physical realm to reach new customers and grow their businesses.

Even major online retailers like Amazon are getting into the game here. As familiar retailers close up and leave malls across the country, these new direct to consumer retailers are taking their places. So who are they, and how are they different from the brick-and-mortar stores we know all too well? How are they planning on thriving and surviving in today’s saturated retail space?

Adapting to Changing Times

It might not be true that brick-and-mortar stores are dying, but rather that their store experiences are out-dated and falling out of favour. Customer expectations are changing, and some brick-and-mortar retailers have not adapted. On top of this, the customer is changing too. Millennials now make up a significant portion of shoppers in North American with equally significant buying power. But they have different preferences than shoppers of older generations; this group prefers to use their disposable income to pay for experiences like travel over goods. And when they do shop for consumer goods, they’re expecting value for money, customization and unique experiences.

This new wave of direct to consumer online retailers opening physical stores is another sign of the changing times and changing shopping preferences, and has forced retailers to think more about the in-store experience and how it needs to change. It’s an opportunity to blend the online experience into the physical experience, literally bringing an online store to life in a new and unique way to attract today’s shopper.

Focusing on Experiences and Services

Physical stores can offer experiences and services that just can’t be matched online. Two great examples of this are from two new D2C online retailers that have recently expanded into physical stores in Canada and the US – Casper and Bon Look.

Casper is a mattress brand and from its start was a radical entry in the mattress category. Retail mattress sales have long been dominated by an in-store experience almost exclusively at department and furniture stores, with sales pressure and questionable pricing schemes (has anyone ever bought a mattress in a store at regular price?). 

In contrast to this, Casper was a fresh and very different online-only option for customers looking to try something different. And I mean very different – the memory foam mattress’s arrive in a medium-sized box that could hold a king-sized mattress. Founded in 2014 exclusively online as a direct to consumer retailer, by 2017 the company had opened up 18 locations across the US followed by its first permanent brick-and-mortar location in 2018. Stores came to Ontario shortly after, with two new stores in Vancouver and Calgary added last month.

Casper began its in-store expansion with a ‘Napmobile’ tour in the spring of 2016, stopping in Vancouver, Calgary and Toronto. Consumers got the chance to test the popular mattress in person prior to buying – an experience online buyers from D2C goods are almost always deprived of. In its new Vancouver and Calgary locations, Casper shoppers will be able to ‘book a nap’ to experience sleeping on the mattress inside the stores’ mini homes. This in itself is a really unique experience for customers – instead of walking into a room packed wall-to-wall with mattresses and (at times pushy) salespeople, they pick a miniature home and settle into the comfy bed inside to try before they buy.

Instagram Image of a Casper Mattress Sleep Shop

With this experience, customers get to test out the mattress before buying, a key piece of the decades-old mattress-buying experience, now reinvented for 2019. And they aren’t showing signs of slowing down – in 2018 the company announced plans to expand to 200 stores in the US alone.

Bon Look is another example of a D2C retailer that has expanded to brick-and-mortar locations, and brings with it a new take on the in-store experience while recreating the online experience. The vertically integrated eyeglass manufacturer and retailer from Montreal have been selling online since 2011. They began expanding to physical retail locations in Quebec and Ontario in 2016. Like buying a mattress, buying a pair of eyeglasses is a purchase that is enhanced with an in-person experience. This allows for customers to get properly fitted for frames, see an optician, have frames adjusted and just try on frames in person. Their new boutiques have been a true compliment to their online sales experience; users can browse online and do their research before coming in to complete the purchase.

But Bon Look’s stores are missing one major element of traditional brick and mortar stores – cash registers. The reason behind this is again to create an easy shopping experience, all the way to checkout: “the goal is to create a modern, ‘hassle-free’ environment where interactions between employees and customers can be more relaxed”. Due to the ease of shopping online, a major key to success for D2C retailers in brick-and-mortar stores will be finding ways to make that in-store experience easier. 

Driving In-Store Traffic 

This shift in retail experiences means new opportunities for these brands to market themselves and reach new customers, and a big need to get customers into their stores. It also provides a new opportunity to find ways to drive in-store traffic with paid media as opposed to website traffic (or in addition to it!). This shift in the retail experience has been followed by the introduction of new media tools by giants like Google, who recognize the opportunity to use digital advertising to drive actual foot traffic and new ways of measuring this. 

Google now allows you to track, report and optimize to Store Visits within your Google campaigns. This requires your Google Ads account be linked to your Google My Business profile. Location services on mobile devices and Wifi are used to determine if a user who clicked on your ad ended up visiting your location within 30 days. You can even drill down to the keywords that drove the most store visits, or the display creative that generated the most store visits during a period of time. These Store Visits can be reported for Google Search, Display, YouTube, Gmail and map campaigns. 

Other third-party display media partners offer foot traffic attribution. Using similar technology to Google, foot traffic can be reported to demonstrate the effectiveness of a campaign at driving customers in-store. This is especially useful for retailers that don’t offer e-commerce. 

Out of home companies are also getting in on this with integrated digital OOH boards and digital inventory space that can use foot traffic attribution to serve ads to customers who have seen a digital OOH and visit a physical location.

This is a shortlist of just some of the media opportunities that exist right now to drive store traffic – we can expect it to grow as this brick-and-mortar evolution continues. The development Google and other media partners have done with Store Visits and foot traffic attribution is closely aligned with the trends we see happening with many successful online retailers opening physical locations. Many shoppers still enjoy that in-person experience or prefer to shop for certain products in a store as opposed to online, so it’s important that we be able to optimize media spending towards the objective of getting people in-store.

Strengthening Connections

In my intro, I posed a question around how D2C retailers could survive and thrive in an already saturated retail market. This is an uphill battle for many knowing the overhead required for operating physical stores and the challenges other retailers have faced. But many D2C brands that have made that transition are making this work, and the focus is on more than just sales, but something a bit more aspirational. 

Glossier, a makeup brand that enjoyed cult-like online status before opening its flagship retail space in New York City last year, didn’t exactly lose its cool status when opening a physical store. The opportunity at stake was greater: “the aim [was] to strengthen connections with brand ambassadors; to allow them to experience a physical manifestation of a brand that they could previously only access through social media”. In today’s world where in-person, physical, tangible and tactile experiences seem few and far between, I think it’s a welcome trend, and will pay dividends to brands that make it work with their physical stores. With so many choices in front of consumers, creating opportunities to create a strong connection with your customer is key. I can’t think of a better way to create a strong connection with your customer than in-person with an experience that sets you apart from the rest (though a nap in a miniature home in the mall doesn’t sound bad either). 
Do you have a physical retail location and are looking to drive more in-store traffic? Contact us and let’s chat.