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Why Some Once Pureplay Brands Are Winning With Click to Brick

Join Theory, Google, H&M, McKinsey, Foot Locker, Lafayette 148, LL Bean, the Retail Prophet and more at Sourcing Journal’s Virtual Sourcing Summit, R/Evolution: Overhauling Fashion’s Outmoded Supply Chain, Oct 14 & 15.

With the biggest growth at retail happening in the e-commerce space, it’s a wonder why some previously online only brands are looking to set up shop in physical locations. But as it turns out, there’s a lot about in-store experiences—the right ones at least—that can drive online buys.

That’s what Ministry of Supply learned in its Newbury Street flagship in Boston, where shoppers can watch a customized blazer being made using 3-D printing technology on a Shima Seiki knitting machine in just 90 minutes.

It’s on-demand manufacturing at its most real.

“We wanted to evoke the feeling of going into a science museum and learning about the product first hand,” Ministry of Supply co-founder and president Gihan Amarasiriwardena, said at the recent Decoded Fashion New York Summit.

Before broaching the brick-and-mortar world, Ministry of Supply tested pop-ups from tiny to 2,000 square feet, in different cities, in different parts of cities and for different lengths of time, all of which helped the company see where and how it would be best received by shoppers.

And so far, the concept has worked out well for the company.

“Our best stores have been the ones that started out as popups,” Amarasiriwardena said, adding that the company just opened a store in New York’s Nolita neighborhood last month, and learned quickly that it didn’t need 2,000 square feet, rather, just 700.

“The pop up really helps you zone in on the zip code where you should be from a sales perspective,” Amarasiriwardena said. “It’s like a low cost investment way to test out that region.”

For The RealReal, a once online-only luxury consignment shop, pop ups have been similarly productive. The company launched one in SoHo last year, which reportedly brought in as much as $2 million in one week.

“There were just a lot of learnings that you can’t really get from the data,” The RealReal’s chief merchant Rati Levesque said at Decoded, referring to what the pop up provided that the research didn’t. And what came out of the successful pop up informed the company’s longer-term physical endeavor.

On Monday, The RealReal opened its first-ever permanent brick-and-mortar store in Soho, a 6,000-square-foot concept store centered on luxury shopping as an experience. Apart from just browsing and buying and the floor-to-ceiling wall of Birkin bags, consumers will be able to engage with certified gemologists and authentication experts who can speak to the store’s products, they can linger in the lounge or the library and sip coffee from the café. They’ll even be able to have luxury watches repaired.

[Read more about advancements in experiences: Target Overhauls Flagship With an Eye Toward Boosting Consumer Experiences]

“We not only created a concept store that represents The RealReal with the best product, but we created a next-level customer experience for buyers and consignors that leverages the speed of e-commerce with the brand experience of brick-and-mortar,” The RealReal CEO and founder, Julie Wainwright, said in a statement Monday.

It’s about using the store to create a community that in turns drives loyalty—and ultimately sales.

The idea, as Amarasiriwardena put it, is “how do we utilize these stores as brand beacons?”

That’s something luggage company Away, which also began solely online, has been working to do with its own physical location. And the company has tried to take the online model of AB testing into physical stores too.

“We couldn’t think of anything more boring than a store just lined with luggage,” Away co-founder and creative director Jen Rubio said at Decoded. That’s why in its flagship NoHo, New York store, just 30 percent of the store is dedicated to selling luggage. The rest is dedicated to bringing the brand to life: there’s a café filled with travel books (and free coffee), travel size toiletries, headphones and all the things travelers will need for their impending adventures. Rubio said she’s even seen a consumer in the store drinking coffee and booking a flight from their laptop. The idea is to make consumers associate anything they need in the travel space with Away.

“It’s a community hub rather than a store,” Rubio said. “What we stand for and what the brand stands for is making travel more seamless…and that in turn does sell the suitcases.”

That community feel is one Ministry of Supply has also capitalized on, using it to inform the product it puts out into the market. The company will host what it calls “wine and dine” moments in its stores where it will invite consumers in to see product prototypes and provide feedback that will actually inform the final design.

“We look at stores as, first and foremost, education,” Amarasiriwardena said.

That education, however, seems to be one too many brands are willing to let pass them by, as they aren’t using stores to inform the kinds of things that could change their business. They’re also not out there launching pop ups to test the waters before diving deep into real estate.

“I think a lot of these traditional retailers who don’t want to change have really allowed smaller brands to come in and do shorter leases…to get a SoHo pop up for three months,” Rubio said. “We’ve been able to do that—a few months in London, a year in LA…so I think it’s having that flexibility because there’s a lot of old retailers who don’t want to change and it has really allowed new brands to try new things and be really nimble in what we’re doing.”

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