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Clicks to Bricks: Apparel E-Commerce Players Find It Pays to Open Stores

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To paraphrase Mark Twain, reports of the demise of bricks-and-mortar retail are premature.

Though mall traffic is declining around the country and sales at non-store retailers are growing faster than any other industry segment, some online apparel merchants are finding the best way to grow their e-commerce business is to open stores. Physical stores are still useful marketing tools for introducing brands to new customers, who may then be more likely to shop their site.

The newest web-to-reality entrant is vintage fashion fave Nasty Gal, founded by Sophia Amoruso in 2006. The brand opened its first store on Melrose in Los Angeles last November, and now, with a fresh round of financing secured by none other than former Apple and J.C. Penney chief Ron Johnson, just opened a second store in Santa Monica Friday and plans to open more. The company said it’s the natural next step for the brand, and a great way to increase consumer interaction and engagement.

The Nasty Gal store on Melrose is as eccentric and boundary-pushing as its brand, though less high tech than expected. The store is decked out in glass and reflective surfaces, with real mannequins rather than interactive touch screens. Tables and racks are stocked with a curated selection of the brand’s signature looks as well as vintage clothing, shoes, intimates and accessories. Sales associates circulate throughout the store with iPads, looking to help customers find product, make decisions and check out on the mobile POS system.

Dressy clothing rental site, Rent the Runway, decided it could expand its reach by opening physical locations in major cities, like New York and Washington, D.C., where Millennials want to look like they’re walking the red carpet without going into the red to do it. Dresses in the stores are arranged by color, length and theme (like “little black dress” and “short, tight and bright”), and customers can make an appointment with a “stylist” to help her get ready for the big event. A Chicago store is scheduled to open this spring that will feature a selection of 900 dresses and 500 accessories that can be rented the same day from the store, though if a size is unavailable the company will ship the item to a customer’s house. The retailer, sometimes called the Netflix of apparel, reportedly doubled its customer base last year. It attributes much of this growth to the new stores, which get people comfortable with the still-new concept of rent rather than buy.

Bonobos, the online menswear seller known for its great-fitting pants, started in physical retail after customers began asking for a way to try the brand’s new suits and shirts before buying. The company opened a small space in the lobby of the its office building in 2011, where customers could see and try on samples before ordering, and the rest, as they say, is history. Shirts and suits are now a bigger portion of sales than pants, according to the company’s CEO Brian Dunn. Bonobos just opened its fifteenth retail store, in Newport Beach, California, and has inked a deal to open a 4,000-square foot New York flagship in the Flatiron district in June.

Brooklyn-based online sneaker brand Greats is less than two years old, but has already opened its first store in Williamsburg. Founders Jon Buscemi and Ryan Babenzia had plenty of experience in shoes, having worked for DC, K-Swiss, Puma and other brands, but still underestimated demand when they started Greats, and sold out of their first two styles soon after their site launched in August 2013. The site now carries seven classic styles, several of which are made in Italy and available in many colors. In addition to the Brooklyn store, which is only open on weekends, the company has “presentation” retail partners like LA’s Union and Scottsdale’s High Point where the Greats styles are showcased among other high-end product, and from which customers can order online.

Not all clicks-to-bricks transitions have gone smoothly, however. In January, Gap Inc. announced it would close Piperlime, the $100 million multibrand footwear and apparel business started in 2006 that opened its first (and last) store in Soho in 2012. The brand was too small to be much more than a distraction for the $16 billion company.

Other e-tailers, like U.K.-based ASOS, say they have no plans of ever opening bricks-and-mortar stores, saying it’s not in their DNA to do so, and that their target consumers, who tend to be on the young side, far prefer to shop online.

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