Is ‘brick mining’ valuable enough to justify physical stores?
As retailers continue to determine what the ultimate role of the physical store will be in an omnichannel world, they’re discovering that brick-and-mortar stores can tell them a lot about how to run their e-commerce operations.
Athleisure company Fabletics is one retailer that’s been using store data to inform its overall strategy and online presence, a concept VP of Retail Ron Harries called “brick mining” in an article on Marketplace. The company, which began as online-only, has found itself getting to know its customer through physical stores in a way not possible online. The retailer is able to collect data on what consumers try on, like and don’t like through touchscreens in smart fitting rooms. Fabletics has found that online sales increase 2.5 times within a 30-mile vicinity of anywhere they open a physical store.
Fabletics is hardly the only pure-play e-tailer that has recentlhy found value in having a physical presence.
For instance, apparel retailer Bonobos, once an online-only brand, began opening physical “guideshops” throughout the U.S. in 2011 and now has almost 50 locations. (In June of this year, the company was acquired by Walmart.) And in 2015, GameStop acquired online-only licensed geek gear purveyor ThinkGeek and began pursuing a brick-and-mortar strategy for the brand.
Pop-up malls that showcase online-only brands have also grown popular. Such locations enable customers to see, browse and showroom products that they would otherwise have to take a website’s word on.
And, of course, e-tailer Amazon has taken a couple of high-profile steps into the physical world. With last year’s creation of Amazon Books, Amazon began using information on what books site visitors were buying and to inform its selection on physical shelves. In the summer of 2017, the company’s acquisition of Whole Foods indicated that even an online business on the scale of Amazon required a brick-and-mortar toehold to compete in grocery.
- Retailers rethink physical stores as online shopping grows – Marketplace
- Are the days of pure-play e-tail coming to an end? – RetailWire
- Guideshop – Bonobos
- Once e-tail-only, ThinkGeek expands brick-and-mortar presence – RetailWire
- A mall carves out pop-up space for online brands – RetailWire
- Will lessons learned at Amazon Books translate to Whole Foods? – RetailWire
DISCUSSION QUESTIONS: Does the customer data that physical stores produce alone justify an online-only brand opening physical stores? What sort of data should stores be collecting to maximize their “brick mining” value?