Online retailers open stores to help promote brands, boost sales

TORONTO – Companies often launch online stores without a physical presence in order to save on costly overhead expenses from stores or to avoid being tied down by geography.

But many e-commerce operators eventually look to expand their reach beyond the nimble digital realm.

Men’s clothing retailer Frank + Oak opened its first store about two years after it started selling clothes online. Parka giant Canada Goose just announced plans to open its first two stores, and made-to-measure suit-and-shirt maker Indochino plans to go from eight to 150 locations by 2020.

Physical stores offer digital retailers something the Internet cannot — a space to experience the brand’s community, products and strong customer service in person. That can boost sales.

“You’re real. You’re alive. You’re touchable,” said John C. Williams, a senior partner at retail and marketing consulting firm J.C. Williams Group, explaining why online retailers open bricks-and-mortar locations.

“When you have … four walls, you know, you can build in an emotional experience much better.”

That’s what men’s clothing retailer, Frank + Oak, is attempting to do as it expands its stable of shops.

Part of the brand’s ethos is creating a sense of community, said co-founder Ethan Song, and “physical spaces can play a very powerful role in doing that.”

The company now boasts 13 locations in Canada and the U.S., with two more Canadian stores coming this summer.

Visitors to the store are treated to experiences they can’t get online, Song said. The brand uses the stores as a way to engage with customers and create a deeper relationship.

The brand’s Queen Street West location in Toronto, for example, includes a barber and coffee shop. Many of their stores include at least one of these amenities, while the Vancouver shop sells cold-pressed juices.

Most Frank + Oak stores dedicate a third of their square footage to such lifestyle features, Song said.

“But the actual act of cutting hair is not necessarily important to us,” he said. Instead, those services help communicate to customers what the brand stands for.

Physical stores also allow companies to offer superb service, Williams said.

When Apple opened its first Apple Stores in 2001, for example, co-founder Steve Jobs declared it “an amazing new way to buy a computer.”

Previously, the company sold its Mac computers through an e-shop and its partners, whose lacklustre customer service and product knowledge frustrated Jobs. At Apple Stores, he promised, knowledgeable sales staff would demonstrate how to use Mac computers. The stores would also include the first so-called genius bars to help customers troubleshoot issues.

That amped-up customer service seems to be the same approach luxury winter jacket retailer Canada Goose is banking on as it plans to open its first two retail stores in Toronto and New York this fall.

Employees will be brand ambassadors, the company said in a statement. They’ll tour Canada Goose factories, some will visit Churchill, Man., as part of the company’s partnership with a polar bear conservation group and some will even travel to the company’s resource centres located in a number of Arctic communities.

The company currently sells its parkas and other winterwear through its website and authorized retailers.

The decision to become a so-called omni-channel retailer can pay off.

Indochino, which sells made-to-measure shirts and suits, launched online in March 2007 and opened its first store in Toronto seven years later.

Its eight showrooms now account for nearly 50 per cent of the company’s sales, said spokesperson Sarah Mayer in an email.

But despite all the benefits, it’s unlikely the retail world will be seeing a significant increase in stores, said Frank + Oak’s Song.

“It’s clear that you need fewer stores in the future,” he said, adding many big chains could benefit from closing about 30 per cent of their retail outlets as more and more sales come from e-commerce.

Nonetheless stores have the ability to provide a space for brands to express themselves and build consumer loyalty.

“They can be very useful if you invest and do the right things that make sense for your customer.”


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