Looking back over recent years, you could be forgiven for thinking that ecommerce is undoubtedly the priority for almost all retail brands. But while this was most certainly the case during the pandemic, we are now in fact seeing a significant shift to physical retail from many brands.
Where this is most notable, and perhaps the most interesting, is within the world of pureplay online retailing. In almost all prime global retail destinations, we are seeing former online-only brands open major flagship retail stores, supercharged with significant investment into fit-out, brand experience and customer service.
We initially started seeing this trend in the US as early as 2013, with retailers such as eyewear brand Warby Parker and footwear brand Allbirds opening stores to much success in New York and San Francisco. In the years that have followed, we have gone on to see some of the biggest and most exciting names in online retail open physical locations from Amazon to Peloton through to Everlane, Glossier and Fabletics.
In the last 12 months in the UK we have seen athleisure powerhouse Gymshark open its global debut store on London’s Regent Street to profound success, while further up the road on Oxford Street, online menswear retailer Maniere De Voir recently announced plans to opens its first flagship store (with Savills advising on the deal).
What’s exciting is that we are beginning to see this shift translate throughout global retail markets. Following its initial opening on Melrose Avenue in LA, affordable luxury accessories brand By Far chose to open its second store in Shanghai this year, while emerging Chinese online beauty brand Florasis opened its first physical store in Hangzhou last December.
There are many reasons why this shift has taken place but perhaps most notable is the fact that for all brands, the cost of acquiring customers online has skyrocketed in recent years. This has led to a change in the role of physical stores, particularly prime flagships, turning those stores into aspirational destinations where customers can build a real life human connection with the brand. By having this physical touchpoint in a high profile location such as Oxford Street or Fifth Avenue, brands have the opportunity to tap into some of the highest levels of retail footfall globally and elevate their brand to new heights.
Additionally, bricks and mortar stores drive higher conversion rates and increase average transactional volumes by utilising the expertise of in-store staff to offer a more personal service. The physical presence of a brand increases its credibility and gives consumers the ability to try before they buy – a benefit to both the consumer and the retailer as it reduces the need for online returns.
As a growing number of online brands begin to see the value in physical stores, we only see this shift continuing. While having a strong online offering is now vital for most retailers, what is of most importance is having a quality omnichannel approach where both online and physical work in tandem. The market adjustments within retail have created unparalleled opportunities for digitally native brands to acquire prime retail space on favourable terms, and those that have already made the bold move are reaping the rewards.
Further information
Contact Sam Foyle or Callum White
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