Page 33 - Bloomberg Businessweek-October 29, 2018

Bloomberg Businessweek October 29, 2018
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S ● After dissing physical outlets names such as Amazon Books and Casper Sleep—

The clicks-to-bricks phenomenon includes big
as passé, online retailers
I discover that stores still matter which popularized the bed-in-a-box—as well as
lesser-known startups like men’s shorts retailer
Chubbies and hair color brand Madison Reed. All
told, these digital natives now operate more than
N Stores are so 20th century. At least that’s what many 600 stores nationwide, according to Green Street
Advisors LLC, a real estate research company.
online brands believed. Warby Parker, Bonobos,
Casper, and other companies didn’t need physi-
“What some brands are starting to figure out is,
‘Oh, wait. Perhaps these retailers who have been
cal locations to win over millennials and steal mar-
E ket share; a well-designed website was more than around for 100 years were onto something,’ ” says
Jared Blank, a senior vice president at Bluecore
enough. And who could fault their logic? Given the
brick-and-mortar carnage across America, the evi-
Inc., a retail consulting company. “You will defi-
brick and mortar.” Micky Onvural, chief execu-
Then a funny thing happened on the way to the
S retail apocalypse. Stiffening competition, surg- tive officer of Bonobos Inc.—bought by Walmart
18 dence seemed overwhelming. nitely see more of these insurgents coming into
ing online ad costs, and cheap mall space have
Inc. in 2017—says malls increasingly see the mens-
prompted these so-called digital natives to embrace
wear company as an anchor tenant. “They want us
S offline in a big way. In their push to become retail’s there,” she says.
If physical outposts were initially exercises in
next household names, they’re venturing beyond
the coasts and big cities into suburbia. The expan-
branding and publicity, they’re now core to long-
sion is also an acknowledgment that 90¢ of every
include a store-opening plan in pitches to venture
retail dollar in the U.S. is still spent at a physical term growth. Startups are even beginning to
location, according to the U.S. Census Bureau, and companies. Many cite the success of a pop-up loca-
Moody’s Investors Service Inc. doesn’t expect it to tion to show that they can leverage their online cus-
fall below 75¢ until the middle of next decade. tomers and stand out from their online-only rivals.

Edited by
James E. Ellis
and David Rocks