Do Digitally Native Brands Need A Physical Presence?
Lisette Huyskamp is CMO at Productsup and has 20+ years of experience leading marketing initiatives at CleverTap, Optimizely, Qlik and HP.
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I tried to order a new tablet online the other day, and it was an experience I’m sure most of you can relate to. I sat at my computer and browsed a few sites, reading reviews and comparing prices. Eventually I identified the one I wanted and added it to my online cart. But when I went to check out, I discovered shipping would take two months. And of course, I needed the tablet sooner than that. So I considered my options. Luckily, I found the retailer had a buy online, pick up in-store (BOPIS) feature, so I was able to identify where the tablet was in stock. I ended up buying it from one of the retailer’s physical stores that same day.
Despite the substantial wait time for shipping, this is a customer success story. I came extremely close to ditching my online shopping cart and searching for the tablet on a different retailer’s site, but because I received flexible fulfillment options, the sale wasn’t lost.
Moving Toward The Hybrid Shopping Experience
My tablet-shopping scenario isn’t uncommon. In fact, it’s quickly becoming the norm. Shopify found 59% of consumers are interested in BOPIS shopping options. I think a lot of this interest comes from the desire for convenience. Consumers enjoy shopping online for the speed and variety of product availability, but if they’re met with friction along the way, such as delayed shipping or out-of-stock items, the e-commerce experience loses its original value.
This is exactly why we’re seeing many digitally native brands establish a physical footprint. Warby Parker, Allbirds and Away are just three examples of companies that began online and have since built a strong brick-and-mortar presence. Even Amazon—the world’s largest e-commerce retailer—is leaning further into physical retail (paywall) by investing in the revitalization of its Whole Foods locations and launching Amazon Style, its first physical apparel store.
As consumers become accustomed to hybrid shopping experiences, they’re going to expect the ability to choose when and how they discover, research, test, buy, receive and in some cases return a product. While headlines announcing industrywide store closures and the rise of the metaverse may deter online brands from taking the leap into brick-and-mortar, brands should remember we live in an omnichannel world where physical needs still exist.
What Digitally Native Brands Stand To Gain From Expansion Into Brick-And-Mortar
As technology advances and commerce operations mature, companies are implementing many different strategies to blend the offline and online shopping experiences. To meet evolving customer expectations, digitally native brands should consider the following competitive advantages offered by the hybrid shopping experience.
1. Alternative Pickup Options
As evidenced in my own tablet purchase described earlier, the ability to offer customers the option to get what they need when they need it is crucial. A company having a physical location that offers in-store or curbside pickup can determine the difference between a completed transaction and a deserted online shopping cart. Some retailers are enriching the curbside experience even further, offering additional perks to make the trip to the store worth consumers’ time. Target, for example, has added Starbucks orders to its curbside pickup service.
Another tool marketers can use to direct online shoppers to their physical stores is Google Local Inventory Ads (LIAs). With these ads, shoppers who are searching for a product online will receive information about the availability of that product in the stores closest to their location. Google LIAs have the power to redirect sales that might otherwise have occurred online to brick-and-mortar.
2. Value-Add Services
Another big play that businesses with a physical presence have found success with is offering services that relate to their product catalog. A good example of this is what Petco is doing with its wellness and service offerings. The pet retailer reported record revenue in 2021, having added grooming, boarding and vet services in its stores. Lowe’s is another retailer boasting strong recent earnings that is known for providing services and assistance with home improvement projects.
These add-on services can result in significant revenue growth, as they allow brands and retailers to extend their business offerings to drive more sales. By creating a new purpose for consumers to interact with their business, they increase the chance of future product purchases being made.
3. Unique Brand Experiences
Going a step beyond service offerings, brick-and-mortar businesses also have the opportunity to create unique in-store experiences that can strengthen relationships between companies and their customers. Nike has been a front-runner in using immersive in-store shopping to better connect with consumers. One of its recent store concepts, Nike Rise, uses a localized approach to match the products and experiences with the surrounding community. Shoppers can purchase personalized items that aren’t available online as well as sign up for local events or fitness classes.
It’s hard to replicate this level of brand interaction online. That’s why having a physical location to engage with customers and create shared experiences can hold the key to building long-lasting relationships.
Because of the extent to which e-commerce is trending and excitement about the metaverse is buzzing, it can be easy to write off traditional retail experiences. But I expect that future commercial success will depend on how well companies can blend physical, digital and virtual experiences. Due to this, forward-thinking digitally native brands will need to leverage their lead in online retail to build a multidimensional, omnichannel commercial ecosystem.
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