This week we take a look at five news articles that touch upon the increasing importance of having a physical store presence in the digital age. Here are my thoughts, feel free to share yours.
Wall Street Journal Blog Eyeglass Retailer Warby Parker Valued at $1.2 Billion
Online eyeglass retailer Warby Parker has raised a fresh round of capital that values it over $1 billion and bolsters its expansion of brick-and-mortar stores. The funding makes Warby Parker one of only a handful of online retail startups to grow beyond a $1 billion valuation before going public or getting acquired.
My Thoughts: With the incredible success and ease of shopping that Warby Parker provides, it is no surprise that they have such a valuation. In physical stores, Warby Parker sees about $3,000 in revenue per square foot, nipping at the heels of luxury jeweler Tiffany & Co. which sells $3,043 per square foot. And at a price point of $95 per pair of glasses, it is a pretty amazing achievement. Warby Parker makes it easy for consumers to shop, from their free try-at-home program to the virtual try-on, Warby Parker connects consumers with their preferred style faster.
Forrester Research’s new five-year ecommerce forecast attempts to guess what the ecommerce industry will look like by 2019. One big projection: The ecommerce industry will top the $300 billion mark in sales this year and grow to nearly $500 billion by 2019 — a slightly faster rate of growth than what was projected by Forrester in a similar 2010 study.
My Thoughts: Interesting report. When it comes to increased spending on mobile, these findings are no surprise. The Demandware Shopping Index recently revealed that smartphones accounted for 33% of ecommerce traffic and 16% of orders. Further, the Index found that 21% of shoppers use multiple devices to complete an online purchase. Forrester also highlights a new emerging trend: the move from ecommerce-only to brick-and-mortar, as we just discussed with Warby Parker. While it is not cheap, experiencing physical stores is an important part of the consumer’s buying journey and can also provide order fulfillment as well.
Fortune Walmart is betting big on China
Giant U.S. retailer Wal-Mart Stores Inc plans to expand its footprint in China by nearly one-third by opening 115 new stores by 2017, the firm’s chief executive said, in a renewed push to lure China’s grocery shoppers despite slowing growth.
My Thoughts: Global expansion has created an appetite for foreign brands worldwide, and that’s especially true in China. We have seen many luxury brands have great success in China, but we have yet to see a real pure retailer fully expand into the region with major success. We have seen Macy’s back burner plans for opening physical stores in China and Best Buy sell off their physical store presence. Wal-Mart’s advantage has always been in driving their supply chain to meet consumer prices, it will be interesting to watch if they can continue that same type on success in the Chinese market.
Advertising Age Pinterest Makes It Easier for Brands to Post Pins, Buy Ads
Two-thirds of the content that people post to Pinterest are originally from businesses, like product images from a retailer’s site. But it hasn’t been easy for brands themselves to post that content, let alone pay to promote those organic posts as ads on Pinterest. Pinterest is now trying to make both efforts easier.
My Thoughts: When it comes to the influence that social engagement has on commerce, peer-curated content is the leading indicator. Pinners engage in aspirational pinning and realistic planning on Pinterest, and it is important for retail brands to take part in both those activities. PInterest’s new tools will make it easier for brands to post and manage their content, but it will be up to the retailers to make sure they are balancing the right amount of aspirational ideas with promotional product pages aimed at bringing traffic back to their commerce site.
Last week, Retail Dive asked readers for their predictions on what role they think brick-and-mortar stores will play in the future. We received many great responses and are excited to share some of the most insightful predictions with you.
My Thoughts: The 11 perspectives on the future of brick-and-mortar retail stores are spot-on and align to what we have been talking about on our blog over the past year. As we have discussed before, physical stores bring value beyond the touch and feel of the products. It gratifies the “need it now” purchase and also provides a social environment to shop with friends. But for the retailer, it also provides additional distribution options like “pick up in store” or “ship from store,” helping retailers more efficiently manage their inventory. And by utilizing digital in the store, it will help store associates better connect and recommend products and sell through web inventory so that they can minimize lost sales. Physical store locations are a huge advantage over Amazon, retailers should think strategically on how to exploit the advantage to regain competitive footing against online pure plays.