Making the Leap to Retail: Why These Online Brands are Investing in In-Person Sales

Bulletin NoLita store interior | Shopify Retail blog

There are new, digitally native brands launching every single day online. Scroll through Instagram and you’ll find endless apparel, consumer tech, and wellness brands vying to get your attention.

But once you’ve launched your online shop, how will you drive traffic to it? How will you cut through the noise of an oversaturated, crowded Internet? And how much money will you have to spend to attract potential customers and then convert them?

That’s where brick-and-mortar stores come in. Just like an increasing number of online-only brands, here at Bulletin, we also began as digital natives. We started as a shoppable, digital magazine featuring products from up-and-coming brands. And just like many ecommerce-first brands, we struggled to market our site and generate sales in an affordable, sustainable way.

That’s why, in 2016, we bucked industry norms to push past the constraints of a computer screen. We invested in physical retail ourselves and quickly realized the power of a high foot-traffic, premium storefront. We no longer grasped for site visitors or pumped money into acquisition marketing. We found a way to reach, connect with, and convert our pre-existing audience.

When we realized the power of brick-and-mortar ourselves, we wanted to help other brands connect with customers in-person.

While headlines blast frightening tales of a “retail apocalypse” for “Old Guard” retailers (like Sears, Gap, Walgreens, Lord and Taylor, J. Crew), newer digital brands are ready to supplement their online presence with an offline one. It’s not enough to sell online — more online-only brands are ready to sell in physical stores.

Cut to 2018 and we work with over 150 digital brands that are eager to sell IRL. We just opened our third permanent store in Union Square, NY, trailing our first store in Brooklyn and our second in NoLita.

So, why are fellow digital natives investing in physical retail? We interviewed a handful of merchants from our community to identify why they’re making the jump to multichannel retail.

Digital Marketing is Expensive and Complicated

Ecommerce versus retail sales | Shopify Retail blog

Image: Business Insider

While ecommerce is a booming $400+ billion dollar market, online sales still only account for 10% of total retail. And honestly, being a meaningful part of that 10% is difficult (and costly) work.

With Facebook — and Facebook-owned Instagram — changing its algorithm regularly, that work is increasingly confusing. Brands either struggle to find the “magic formula” for social ads and digital marketing, pay an exorbitant amount to keep it running, or don’t have the funds to do it in the first place.

According to Lea Ridenour, founder and CEO of Made Au Gold, this stressful tango with paid marketing is part of the reason she took a risk to sell IRL.

“Physical retail allows my products to reach a new customer base and it’s guaranteed to increase my visibility,” she said. “It helps me differentiate from the vast online competition and it’s a reliable way to market my brand.”

For Lea, physical retail acts as a replacement for digital marketing. Rather than running pricey, targeted Instagram ads that (hopefully) attract a New York audience, she hosts her product in high-foot-traffic areas that guarantee exposure. It’s a simpler calculation: thousands of pedestrians + catchy storefront = eyeballs on her brand.

Not only is this formula simpler — it’s often more affordable. Matt Michaelson, a growth consultant for brands like THINX, Sustain, and now his own cat food venture Smalls, recently told me he’s budgeted over $50,000 to “crack” a brand’s digital marketing puzzle.

"Businesses often overlook the true cost of launching a direct-to-consumer (D2C) strategy,“ he explains. “If you're considering launching a D2C business or making a push toward digital marketing, don't forget to think through those various expenses.”

He advises that brands consider not just the cost of running paid ads, but also the price of creating those ads (writing copy and creating images), time spent optimizing those ads, and even setting up email marketing initiatives.

“Getting this all set up can easily exceed $50,000 before you’re even ready to run your first ad, but all of these costs are in the pursuit of finding paid acquisition strategies that are cost-effective and scalable. If you can crack the code, then the promise of a rapidly scaling business looms large — but there's no telling how many different tactics and strategies you'll need to try before discovering the key."

From planning, producing, and editing ad creative to testing those assets with various audiences, digital marketing can be confusing and expensive. While brands figure out the perfect digital marketing mix for their business, they can also consider physical retail. Depending on how brands choose to sell in-person, retail can be a bit less expensive and provide a reliable ROI.

Showcasing Physical Products Offers a Rich Brand Experience

Bulletin Williamsburg store | Shopify Retail blog

Image: Bulletin

Physical retail also accomplishes a lot of work that acquisition marketing simply can’t. Positioning your brand in a physical space allows you to show off your product and connect more intimately with your customers.

That’s how brands like THINX, Unbound, Brooklyn Candle Studio, and Kiddbell think about brick-and-mortar stores. For Kiddbell founder Whitney Bell, it’s a way to reinforce product quality.

“Occasionally we will get complaints that our brand is too expensive. Things like, ’Why would I buy a T-shirt for $35?’ But we care deeply about the quality of our products. You won’t find Forever 21 price tags, and you also won’t find Forever 21 quality,” she says.

“If you were shopping on our website, you wouldn’t know that our T-shirts are a buttery soft, lightweight vintage knit. You couldn’t feel the hefty weight of the sterling silver lighters we carry. You wouldn’t be able to see the smooth matte finish on our buttons. All these choices were made very deliberately, and a lot of that care and attention gets lost in digital shopping.”

Unbound, the sex tech powerhouse, and THINX, the period-proof underwear company, are looking through a similar lens. As a company producing high-tech intimate products, Unbound leverages physical retail as a way to communicate value and ultimately convert customers.

Polly Rodriguez, founder and CEO, explains: “We find that when customers are able to feel the [products], they can see the high quality of engineering in the design. Specifically for our product Squish, the harder you squeeze it, the harder it vibrates. When customers are able to actually see this functionality in-person, they're blown away by how intuitive and thoughtful it is.”

Per Jasmin Jenkins, Head of Events and Partnerships at THINX, retail is also an opportunity to build familiarity with a customer. Especially when launching a high-value product that’s both innovative and unfamiliar.

THINX is investing in physical retail because we see the value in allowing our customers to touch the product and get their questions answered in person,” Jenkins said.

“Even in our hometown of New York, with so much brand awareness, many people still don't know what THINX feel like or how they work. Physically showcasing the product is important because it allows for customers to understand that THINX feel just like a regular pair of underwear; they're seamless, comfortable, and wash like your other underwear.”

And even if you’re selling the most familiar product on the planet — like candles — physical retail offers customers a 360-degree experience, which is something customers can’t get when shopping online. According to Tamara Mayne, founder and Creative Director at Brooklyn Candle Studio, offering that experience is the No. 1 reason she’s invested in brick and mortar.

“Scent is the central experience of our candles, [and] it is important for customers to smell the fragrance firsthand,” Mayne says. “Not only that, but our packaging has many luxurious, tactile qualities that are difficult to pick up from a product photo — embossing, foil stamping, etc. You get more of the full experience of our products when most of the senses are involved. We can only accomplish so much with photographs and copywriting — the physical retail space is necessary for the full experience.”

Physical Retail Offers Important Data

These kinds of in-person experiences with customers offer a wealth of information to a brand. The data behind in-store sales, product engagement, merchandising, pricing, and customer feedback is totally separate from ecommerce and offers different insights to business owners.

Bulletin works with numerous brands that have never sold offline before. They quickly learn that communicating a product or brand in physical space is wildly different from selling behind a screen. And as a brand, you need data to solve that puzzle. Does your packaging communicate the product’s value? Do your necklaces tarnish quickly in a retail environment? What percentage of your sales come from tees over tank tops? What’s your top-seller in-store and why do people love it?

Real-time, in-person data can help brands pivot and even gain more sales. For example, if a keychain slogan continuously sells out, maybe the brand should turn it into a shirt to introduce a higher price-point. If the product feels too expensive, reassess the packaging first. These are things ecommerce data often can’t tell you. What do real people, engaging with endless products in an actual store, think about your stuff?

For Prinkshop, a purpose-driven apparel company, that’s the main reason they invest in brick-and-mortar sales. It’s also why they do many other retail activations beyond selling at Bulletin’s Union Square storefront.

“We feel retail is a laboratory to engage and understand our customers,” says Karen Fechter, who runs strategy and business development for Prinkshop. “Although we are an ecommerce platform, we constantly engage with customers by doing pop-ups. Women of the World conference, The Wing, DC Market, a J. CREW collaboration pop-up… these are just a few of our pop-up screen printing and selling events. Each time, we learned so much about our customers. It serves as a chance to know who we are talking to and receive feedback on the designs and partnerships. Both [are] positive and constructive.”

Most Bulletin brands, at one time or another, have expressed serious interest in and gratitude for real-time sales dashboard and customer feedback. There’s only so much you can extrapolate from Google Analytics, bounce rates, cart abandonment stats, and time on site.

Physical retail fills that gap with in-store anecdotes, customer behavior, and purchase patterns. And if the retail staff is trained properly, a brick-and-mortar store can function as a brand and product observation deck.

Sometimes, the competition, materiality, and intimacy of a real store help address problems you didn’t know you had or learn something you couldn’t have known otherwise.

A Screen Can Only Go So Far

Janine E. Lee, CEO and co-founder of cult nail polish brand Floss Gloss, sums up the impact of seeing her products in person.

We sell a color cosmetic product, and although our phone and computer screens are 1080p high-def — it’s always so much more impactful seeing it in real life.

Real life is high-impact. It offers a customer something tangible, experiential, and memorable. It isn’t something you can just swipe left on or “X” out of.

Natalie Mackey, CEO of cosmetics brand Glow Concept, agrees.

It’s difficult to replicate opening a beautiful box, feeling the weight of the product in your hand, and opening it with a click,” she explains. “There is also more trust and goodwill created in-person than online."

Moving Forward With Selling In-Person

A computer screen isn’t your enemy — it’s just a piece of a larger puzzle. Ecommerce is a quick, effective, affordable, and easy way to launch your own business. But as an online merchant, you’re competing with merchants all over the world. Retail is a differentiator. If done right, retail can bring a vast, built-in audience to your brand. Selling in-person can validate your product and communicate value. It builds familiarity with your customer and generates important, useful data.

To see some of these brands IRL, check out Bulletin’s new flagship store at 17th and Broadway in New York City starting Aug. 3. Or check out our other spaces in Williamsburg and NoLita.

To test out the power of selling in-person yourself, apply to sell with Bulletin. We can’t wait to see what you and our brand have got in store.

Ali Kriegsman, Bulletin | Shopify Retail blogAbout the Author

Ali Kriegsman is the Co-Founder and COO of Bulletin. Bulletin builds experiential retail stores for women, by women. Each item we sell was dreamed up by a female entrepreneur and 10% of all store sales go to Planned Parenthood of New York City.