It’s no secret that with the rise of online retailing, traditional brick-and-mortar retailers are suffering. Known in the marketing world as direct-to-consumer or D2C brands (think Glossier, Casper, or AllBirds, or Away), these digitally-native companies are revolutionizing retailing by providing highly curated and well designed customer experience, rendering traditional retail strategy obsolete.
Apple’s much anticipated launch on Sept. 12 included various new iPhone models, but the star of the show by far was the Apple Watch, with its new, built-in, FDA-approved ECG monitor. This is the brand’s largest step forward into the healthcare/medical equipment field and can mark a huge shift in their marketing strategy.
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But that’s not to say the brick and mortar space is dying. In fact, analysis of advertisements from our platform found that unlike traditional brands who position physical retail as the point-of-sale, D2C brands have utilized it as a tool for brand awareness and consideration. In other words,
Digitally native brands position the brick-and-mortar store higher up in the marketing funnel, shifting it from a sales center to a branding hub while keeping sales online, and traditional retailers have yet to catch up.
D2C brands often expect customers to leave the store empty-handed, only to go home and order the items they loved most from their online shops. That’s why these physical stores aren’t four walls filled with product-lined shelves—they’re immersive spaces where customers step into a brand’s world.
Tracking the Brick-and-Mortar Shift Up the Marketing Funnel Space
At its core, the shift of brick and mortar up the marketing funnel is a response to changing buyer behaviors of online shopping, and these brands are acing the ultimate test of good customer service. Instead of trying to attract customers into the store and have them conform to the old buyer structure, new brands are adapting their sales funnel to the customers themselves.
In repurposing the store to generate buyer consideration, customers can visit the brand’s space, consider the product, try it on, and buy it at a later point. These spaces have come to be known as “guide shops,” for their ability to literally guide customers through the buying journey.
Bonobos, one of the first D2C retailers to call their spaces by this name, has over fifty guide shops locations across the US. They’re designed to keep online stores as the point of sale, where customers try on clothing in the space only to place an order either through the store or on mobile, to be delivered to their home rather than walk out with a purchase. This frees up time traditionally used for stocking among the staff, and accommodates to the modern buyer’s journey.
Winning Brands Nailing the “Guide Shop”
Online luggage retailer Away, for example, has brought its wanderlust-inspiring Instagram image to life at physical stores in Los Angeles, Chicago and New York. Hero products—namely Away’s carry-on suitcases—are displayed in ways that allow customers to touch and try. Dreamy travel quotes emblazon clean white walls as a nod to Away’s minimalist brand featured on their online store. In line with their immensely successful travel magazine/blog, Here, artsy travel guidebooks and accessories set a mood that appeals to travelers.
Similarly, Millennial-focused cosmetics company Glossier has launched stores in New York and Los Angeles that showcase the brand in all its pastel-pink glory. Customers can visit the spaces with curvaceous interior architecture to test out the brand’s cult-followed skincare products and makeup, displayed on reflective shelves that allude to Glossier’s iconic packaging. The diffused lighting and giant mirrors make it easy (and fun!) for customers to see how the colors and textures look.
After seeing success with pop-ups and a permanent location in New York, direct-to-consumer mattress brand Casper is also capitalizing on the power of traditional retail with plans to open up another 200 stores. Casper treats its cozy stores as educational spaces, where customers can touch the fibers from inside of pillows and test out mattresses in mini homes, complete with skylights and bird sound effects. These are experiences customers just can’t get on a screen, but they’ll use the memories to influence their online purchases.
The Customer Journey from Guideshops to Purchase
If the in-store experience is moving up the marketing funnel, how are brands tracking long-tail conversions?
The solution starts with retargeting customers who have already visited their stores and prioritizing online as the point of sale. At BrandTotal, we can see this strategy reflected in D2C brand’s advertisements. For example, our platform has shown that that Everlane has allocated 42 percent of its digital campaign strategy to Facebook over the last 60 days, where almost all of the ads include the call to action, “Shop now.” Likewise, razor company Harry’s has devoted nearly half of its media mix to Facebook, and 71 percent of the ads were aimed at converting new customers. These ads take customers directly to mobile-optimized landing pages, making checkout a breeze.
Same day shipping, free returns and the direct-to-consumer model has clearly disrupted the traditional retail experience this past decade. As brands return to brick-and-mortar, they’ve got to nail down the right combination of physical immersion and digital engagement to connect with consumers, wherever they are on the buyer’s journey.