The Role of the Brick and Mortar in a Digital Economy

In 2018, Americans watched the collapse of retail giants and established chains closed locations in an attempt to cull expenses.

However, online shopping accounted for less than 10% of retail purchases in 2018. The physical storefront still holds a valuable place in shoppers’ hearts and pocketbooks.

For many businesses, the concept of a brick and mortar is still exciting. It is, after all, the traditional notion of what a business is.

Just the term “brick and mortar” evokes images of an industrial chic chocolatier in New York, or a cashmere boutique on the cobbled streets of Milan. Since modern business needs to be digitally grounded, brick and mortar stores have more romantic appeal than ever before.

And business owners are acting on this vision, paying that romanticism forward with increasingly experiential operations.

Morgan Kelleher, head of field marketing at Amplience, recently wrote, “While online shopping is convenient, customers are still looking for social and experiential experiences, which can be achieved in a physical store.”

Big chains and small startups alike are investing in physical retail spaces, with an emphasis on creating environments that customers can feel connected to.

Home furnishings giant RH (formerly Restoration Hardware) has transformed its showrooms into “galleries,” and more than just a place to examine home furniture and decor. The spaces are complete with fine dining and coffee bar options, allowing you to bask in your luxurious surroundings and get comfortable.

As they push into 2019, the brand aims to further blur the lines between retail and hospitality — there are plans to open a hotel. While similar retailers aim to downsize and move their businesses online, RH continue to increase square footage — and profits.

“We believe when you step back and consider: one, we are building a brand with no peer; two, we are creating a customer experience that cannot be replicated online; and three, we have total control of our brand from concept to customer, you realize what we are building is extremely rare in today’s retail landscape, and we would argue, will also prove to be equally valuable,” CEO Gary Friedman explained.

It’s a long term strategy, but the results are already evident.

It’s one thing for an established brand to take the plunge, but it’s another for a new business, especially a brand born online. In an age where it’s essential for your business to have both online functionality and a social media presence, putting down roots with a physical storefront is a whole new venture.

It’s easy for a brand to just live online these days. It keeps costs down and is more low maintenance. With Americans spending 14.29% of their time online according to MIT Technology Review, online business owners have plenty of opportunities to reach new customers.

If an online brand wants to launch a successful physical storefront, it needs to be strategic about how that space will function, and aim high.

Skincare industry disrupter Glossier became a cult favorite without a physical presence. The company began as an editorial project designed to generate engagement and conversation, before taking the jump and manufacturing products. Within a few short years, the brand reached cult status through its eCommerce platform.

Glossier opened their SoHo flagship store in 2017- a sophisticated, feminine, very pink space with just a slightly David Lynch vibe. It has become a destination for New Yorkers and tourists alike, not only because it sells coveted creams, but because the unique environment is destined for Instagram selfies.

“Consumers are consistently photographing and posting their experiences on social media now more than ever. An interesting display or differentiating factor in a physical environment can instantly get shared, become viral, and a business can quickly flourish,” says Rayonne Vossough, owner of Savvy Spaces.

Glossier isn’t the only big eCommerce brand to dig its heels into physical ground. Digital native brands like Casper, Everlane, and Warby Parker are planning an increase in retail locations, and even Amazon has opened physical storefronts.

These spaces need improved functionality compared to earlier models, however. Digital-first brands can form more solid connections with customers by employing genuinely cool (and calculatedly unpushy) salespeople who create a sensory-rich environment to lend context to products.

But the biggest plus is arguably the potential to generate a community of brand loyalists in the real world.

Having a physical space enables business owners to host real life events, which can generate buzz and help to establish them as authorities in their spaces.

Events also provide the opportunity to bring online enthusiasm into the real world and unite customers around your brand. As the link between social media and anxiety, depression, and low self-esteem becomes clear, it’s apparent that we need to put down our phones and step back into the real world, and have in-person human interactions again.

For all of the digital marketing and user experience digital brands invest in, there is something priceless about bringing customers together in a physical space.

Take Evolver, a transformative self-improvement brand that focuses as much on holistic health as it does festival culture. With a robust eCommerce presence, a strong foundation of online workshops, and a well-connected team based in New York, it made sense to invest in events. However, the available spaces were lacking in atmosphere and permanence.

They launched their brick and mortar Alchemist’s Kitchen in 2015, which focuses on natural health and wellness remedies. Customers can enjoy tasting flights of adaptogenic elixirs, but their space also serves up community. A jam-packed calendar of events features everything from donation-based acupuncture to herbal medicine workshops.

CEO Lou Sagar explained to me that the space functions as a “physical touch point to inform, educate, and mentor customers on how botanical and herbal remedies offer options to prescriptive medications. The space provides the kind of ‘grounding’ that only a physical location can.”

Over the past few years, more entrepreneurs and small businesses have made their fortunes selling digital products, from ebooks to software to video courses.

It’s interesting to think about how these new, intangible products will inevitably function in a physical space. As brands utilize pop up shops for market research, we are accelerating ever faster towards a buying experience where you can walk into a physical location to purchase a purely digital product.

Regardless of what this will look like, one thing is certain — when we shop in the brick and mortars of the future, it will be quite an experience.

Tara Storozynsky works as a content marketer and affiliate manager for Selz. She lived in Los Angeles and New York before moving to the mountainous Pacific Northwest, where she spends time exploring the local food and art scene, and playing with her puppy.

The simple and powerful ecommerce platform to grow your business. Sell on social media, your own sites and create a custom online store with Selz.