BrainTrust Query: Clicks to Bricks
Through a special arrangement, presented here for discussion is a summary of a current article from the newmarketbuilders blog. The article first appeared on the Licensing Industry Merchandisers’ Association (LIMA) blog.
E-commerce is clearly still in its infancy as a volume-driving "channel," but the establishment of digital flagships, often in lieu of physical ones, is driving a host of additional benefits for retailers. The "bricks-to-clicks" model of the past is beginning to be turned on its head, and a new wave of retail competition is transforming the landscape without laying a single brick.
- Japan-based, fast-basics retailer Uniqlo is said to be on the hunt for an agency that will build out a U.S. digital flagship for its brand. Uniqlo’s e-commerce platform will definitely get its volume engine cranking, but it will also prime the pump in markets slated for future stores, while driving global brand awareness in a way that its spotty physical footprint can’t just yet. While currently limited to three stores in New York, it’s set its sights on generating $10 billion in the U.S., with 20 percent of that originating online.
- Often referred to as its country’s equivalent to Nike, Chinese challenger brand Li-Ning expects the U.S. to account for 10 percent of its international sales by 2018, but it has no imminent plans to hang anything but virtual shingles here. With the premise of enabling consumers to "feel the personality of the brand" as if they were in a physical store, Digital Li-Ning debuted in March and has garnered a 425 percent increase in unique monthly web visitors. The brand has since created a robust virtual ecosystem that incorporates Facebook, Twitter, Pandora, YouTube, and the blogosphere into its digital mix.
- Although Burberry’s bleeding edge drives into digital stand out as an impressive exception, the rest of the luxury market has largely resisted the rush to e-commerce, and instead relied heavily on carefully-curated physical flagships situated in major markets. Amazon’s just-announced foray into fashion will provide a much-needed margin boost to its portfolio, but its determination to sign on brands such as Michael Kors, Vivienne Westwood, and others also portends it transforming into the digital flagship of choice for many luxury brands.
- While its nearest physical store is in Secaucus, Walmart actually counts Manhattan as a top market, thanks to the magic of its endless online aisles. It’s also a channel that isn’t reliant on New York bargain hunters making hikes to neighboring states or succumbing to its ongoing store-building overtures. Any future ribbon-cuttings in the Big Apple are bound to grab headlines, but for Walmart, they will signify the achievement of a multi-channel milestone.
- Clicks to Bricks – Licensing Industry Merchandisers’ Association
Discussion Questions: How will the emergence of digital flagships and store-less markets change the retail landscape? Is the digital-first, clicks-to-bricks model a viable one for growing brand awareness and market share?