Does Everlane need to open stores?

Discussion
Photo: Everlane
Dec 04, 2017
Tom Ryan

In 2012, Michael Preysman, founder of Everlane, the cult online apparel upstart, vowed to The New York Times that he would “shut the company down before we go to physical retail.”

Eliminating brick-and-mortar overhead allowed Everlane to keep prices reasonable. Prices range from $20 for a tank top to $68 for jeans and $100 for a cashmere sweater.

Known for its minimal aesthetic and “radical transparency” in disclosing the costs of its manufacturing process, Everlane has since experimented with pop-ups in New York City and inside Nordstrom. But earlier this year, Mr. Preysman in an interview with Quartz again reiterated his feelings on physical stores’ limitations by noting that he didn’t think any apparel store delivered a “great experience” on par with Apple or IKEA.

Instead, Everlane uses high-quality videos and imagery online as well as its periodic parties and pop-ups to bring the brand to life. He told Quartz, “It’s just all about how you use the medium that you have.”

Yet following the path of former online-only firms such as Bonobos, Warby Parker, Tuft & Needle as well as Amazon, Everlane on Sunday opened its first store, on Prince Street in Manhattan’s SoHo neighborhood.

“It wasn’t an easy decision,” Mr. Preysman said in a statement. “Being online-only has significant advantages. It’s flexible, it’s lean, and it’s easy to scale. But it has two serious flaws. Customers don’t get to touch or try the product before they buy it. And we don’t get to have in-person — real-life — conversations with our community.”

The store features 257 of Everlane’s top-sellers. Its denim line is available to be tried on in-store but must be ordered online.

Having a store also gives management an opportunity to educate customers on Everlane’s sustainability focus. A landline phone plays back the sounds of its Los Angeles T-shirt factory. One section features cards with information about its contractor factories. Panels and community events are being planned to also highlight the retailer’s supply chain process and ethical standards.

Everlane will open a second store in San Francisco next February, but Mr. Preysman said the company will be “taking it slow” with its physical expansion.

DISCUSSION QUESTIONS: What benefits do you see Everlane gaining from opening a physical store? Does having an apparel focus or sustainable positioning make it more important that the chain have a physical presence?

Braintrust
"Those who get the balance right between online and physical presence will win."
"Good for Everlane for swallowing their pride and trying omnichannel out for the first time. Welcome! "
"Of course they’re opening two permanent stores. Cheers to them. I’m taking notes."

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22 Comments on "Does Everlane need to open stores?"

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Peter Messana
BrainTrust

Touch and feel is key to building the brand. Online-only is fine but the validation a physical store gives is amazing. For apparel it lowers return rates and you can really understand what the consumers like, much more so than online where you are looking at something on a computer or phone.

VR/AR will help address some of this but the ability to touch and feel is important and, when done right, stores are amazing for brands that are truly unique.

Art Suriano
BrainTrust

There are many advantages to having physical stores and Everlane is just catching on. In today’s world, having both an online presence as well as physical stores is the best because people shop differently. Some customers only shop online and some customers just shop in stores. But the majority of customers use both forms of shopping as they see fit. Physical stores allow customers to touch and feel the products and it creates awareness with those customers who may not be familiar with the brand. Whenever I hear anyone say, “no one shops in stores anymore … ” I laugh and say, “really?” Then I tell them that physical stores still represent the majority of all retail sales. Everlane is smart to get into brick-and-mortar and, if they do it correctly, I could see them opening many more stores in the years to come.

Bob Amster
BrainTrust

The arguments for heretofore pure-play e-tailers opening stores have been the education of the consumer in a one-to-one setting, the fact that online sales increase in ZIP codes where there is a physical presence and, in the case of Everlane, the opportunity for its following to get physically in touch with a company that wants to be transparent and thereby satisfy its customers’ curiosity. As Preysman says, taking it slowly and monitoring the consumers’ repossess will tell the tale.

Charles Dimov
BrainTrust

Going physical has many benefits. Physical and online stores can feed each other, build momentum and work in unison. For a customer new to the line, there are anxieties about their sizing, quality of material, feel, fit, material texture and ultimately how it looks on me the shopper. This is easily overcome in a physical store. For the next purchase, once the shopper knows more about your firm, they are more comfortable increasing their purchase frequency and sizes.

Plus, going omnichannel also means you gain the advantages of in-store pickup (where customers buy more products), the associate’s human touch and opinion (upsell opportunities) and better returns. Shoppers prefer to return items in-store.

Good for Everlane for swallowing their pride and trying omnichannel out for the first time. Welcome!

Brandon Rael
BrainTrust

The old adage is to “never say never.” Hybrid retail, which is a blend of both online and in-store experiences, has proven to be quite a successful model for the once pure-play e-commerce innovators Bonobos and Warby Parker. Everlane is wise to follow suit on this strategy, as per a recent study, nearly 90 percent of all purchases are still influenced by the in-store physical experience.

Digital and mobile are critical components of this equation and enable consumers to be far more empowered, educated and provide choices beyond what was possible in the past. Providing consumers a choice or a physical playground, is the most advantageous aspect of opening a store or leveraging the pop-up model.

Regardless as to how advanced our technology becomes, or how powerful the AR shopping experience becomes, the tangible and emotional connections are still made in-store.

Stuart Jackson
BrainTrust

Everlane has made exactly the right decision and it’s an impressive turnaround for Michael Preysman. Opening a physical store will not only boost profits and give existing customers the opportunity to experience the brand in a new and more intimate way, but it will introduce the company to a whole new audience, converting walk-in shoppers into loyal long-term customers.

Everlane has the makings of an iconic global brand — not just a small niche U.S. company. Its clean-cut, modern style is well-known and respected even in countries where the company doesn’t yet ship, like the UK and Europe. There is a potential global market waiting for Everlane and if it’s to exploit this demand and create a sustainable growth strategy, the smart next step is to start opening U.S. High Street stores. Well done Everlane!

Ken Lonyai
BrainTrust

Opening one store or a few is anecdotal. If that’s all it ever does, so what? Operating a successful e-commerce site doesn’t mean that a company has the capability to scale up to a national chain, even if it only targets big cities. Believing that Everlane or any pure-play digital company is going to be competitive at scale in physical retail is wishful thinking until they prove that they can compete profitably in the “real world.”

Celeste C. Giampetro
BrainTrust

Those who get the balance right between online and physical presence will win. As the other commenters pointed out, some people prefer online shopping but 90 percent of U.S. retail sales happen in physical stores. To build their brand and awareness of their mission, Everlane’s strategy seems like a smart move.

Gene Detroyer
BrainTrust

Michael Preysman explains it perfectly, “It’s just all about how you use the medium that you have.” The key word is medium. The store is not opened to sell things, it is opened to connect a message to customers. It is no different than (and probably better than) straight advertising. As long as they don’t lose focus and start thinking that the store is there to sell product they will be successful.

Preysman understands that from a selling point of view the traditional brick-and-mortar business model will always be beat by online. And I am sure he doesn’t care if no one ever buys one product in his “store” as long they become a loyal online customer.

Joy Chen
BrainTrust

There are two reasons for physical stores: to sell products or educate consumers about the brand. In this case, Everlane is smart to open stores to increase consumer awareness about Everlane, what it stands for, its mission and products it sells. This strategy has worked well for brands like Warby Parker.

It does not matter what product is sold to warrant a retail store. The excitement of Everlane’s retail strategy brings excitement to the city that is getting this new store. As for its sustainable positioning, it is nothing new or unique so having the physical store cannot be for that reason alone.

Neil Saunders
BrainTrust

” … He didn’t think any apparel store delivered a ‘great experience’ on par with Apple or IKEA.”

To be fair, Macy’s 34th Street store is like IKEA — but only in the sense that once you’re in there you can never find your way out!

On a serious note, physical stores are a great way of showcasing brands as many online-only companies have found it. The trick is to think of the store as a marketing opportunity and not solely as a place to sell products directly. Apple never thought of stores in the traditional way, which is why it has been so ahead of the curve.

Larry Negrich
BrainTrust

There are many solid reason to open physical stores and in this case one more: a PR burst. Going against their vow to never open a store is a nice angle for publications to devote some attention. It this store doesn’t work out they can go for another publicity burst by closing this store and discussing all the reasons why physical doesn’t make sense for them.

Jasmine Glasheen
Staff

Opposed to being expansion-focused with its brick-and-mortar presence, Everlane should focus on creating a legendary in-person shopping experience.

It sounds like Everlane is already using interesting methods to educate customers about its sustainability focus, but I’d also like to see a philanthropic effort based on cultivating eco-consciousness within the community.

Byron Kerr
Guest

Brick-and-mortar can play a critical part in a retailer’s strategy when executed correctly. Customers still yearn for the ability to touch and feel product mixed with in-person help that can help piece together outfits and offer valuable insight that they may not receive online. By leveraging a brick and clicks model, customers can feel more comfortable taking a risk on a new brand because they know the fit ahead of time, get an in-person feel for the brand and what it represents, and can ultimately manage all future purchases online if needed. Omnichannel, when executed purposefully, can enhance a customer’s overall experience.

Apparel brands that execute a “showroom” experiential model where all transactions and shipments are managed via e-commerce channels are reaping the most success and this trend will accelerate in the near term.

Joanna Rutter
BrainTrust
10 days 23 hours ago

Of course Everlane’s next move is permanent retail! I shared some thoughts on this move when it was first teased in July, the main takeaway of which is: “Clicks to bricks” is no longer a mere trend. It’s the whole playbook.

Whereas legacy big-box retailers have struggled to effectively migrate to e-commerce websites that don’t make you want to throw your laptop off a building, Everlane and their online-first retail peers turn the funnel on its head. When you create that compelling of an online retail brand, of course shoppers will want to engage with you in a physical space, with store associates who are heavily vetted for brand loyalty and well-versed in the products their fans are obsessed with. Of course they’re opening two permanent stores. Cheers to them. I’m taking notes.

Lee Peterson
BrainTrust

According to a new study by Deloitte, if an online retailer opens up a physical store within a certain ZIP code, their online (that’s e-commerce) sales go up 52 percent. To me, I don’t know why you’d need more proof than that.

Molly Nichols
Guest

Everlane gains so many benefits from a physical store! Their branding has been all about transparency and authenticity. Having a store gives their customers even more insight into the business and adds to their branding with the store experience.

Sustainable positioning is making it important for the chain to have a physical presence. Their timeless apparel needs a timeless location to sell, and in-person is the best way to do that.

Robert DiPietro
BrainTrust

You can’t be omnichannel with just one channel. The physical component will add a chance for consumers to touch and feel before they buy. It’s likely that these customers will even buy more online too. You can’t overlook the marketing/branding component of a physical store either — that can only help solidify the brand if the in-store experience is done right.

Ken Morris
BrainTrust

It is interesting that a few years ago, pundits were speculating the demise of physical store and they continue to garner more than 90% of retail revenues. Even pure-play online retailers are now realizing the value of a physical store in driving awareness, enhancing relationships and the importance of physically touching and trying some products – especially apparel.

The showroom concept of retail stores has proven to be successful for RH Galleries and Nordstrom and it appears to be a good model for Everlane. With smaller store footprints, it is an inexpensive way for Everlane to have a physical presence and test the waters before potentially investing in bigger stores. Some products need the 5 sense experience to truly inculcate the brand.

Ralph Jacobson
BrainTrust

Until further notice, virtually every product category of retailing will be augmented with an omnichannel presence. Human senses demand touching, smelling, tasting of product lines, while still enjoying the conveniences of online shopping.

Ricardo Belmar
BrainTrust

While we continue to see stories in mainstream media about the demise of the store and the retail apocalypse, it’s the pure-play e-commerce retailer that’s in danger! Everlane, despite grandiose claims previously about never opening stores is simply recognizing the value of the store as showroom for their products.

The future of retail lies in leveraging multiple channels to make multiple touch points with the shopper. Everlane, as other pure plays have found, reach a growth ceiling they cannot seem to break through without entering the world of physical retail. There are many advantages for their customer including the ability to touch and feel the product, particularly important for apparel. However, this isn’t what makes Everlane unique and they shouldn’t allow the act of opening stores overshadow their overall message and positioning.

Kenneth Leung
BrainTrust

Stores are part of the retailing experience. Whether they fit a retailer’s strategy depends on the strengths and attributes of the products. The days of opening as many stores as you can to increase sales is over; today it is about opening the right stores at the right location reachable by the right customers and use it to supplement other channels, and vice versa.

wpDiscuz
Braintrust
"Those who get the balance right between online and physical presence will win."
"Good for Everlane for swallowing their pride and trying omnichannel out for the first time. Welcome! "
"Of course they’re opening two permanent stores. Cheers to them. I’m taking notes."

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