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Digitally Native Brands Lean Into Brick & Mortar

Shira Petrack
January 30, 2023
Digitally Native Brands Lean Into Brick & Mortar

As the dust settles on a post-pandemic retail landscape, it’s becoming increasingly clear that even brands that were born, or primarily operate, in the digital sphere can benefit from an offline presence. Brick-and-mortar locations can offer an immersive experience that is nearly impossible to replicate online while providing significant support to almost every aspect of a retailer’s operational cycle – from customer acquisition to fulfillment to reverse logistics. 

Our recent report “Digitally Native and Direct-to-Consumer Brands Take to the Streets” took an in-depth look at the multiple strategies DNBs (Digitally Native Brands) and DTCs (Direct to Consumer companies) can employ to leverage the full potential of offline retail. We drew on a variety of location intelligence metrics to show how a robust brick-and-mortar operation allows DTCs and DNBs to build brand awareness, streamline distribution, and drive consumer engagement. Below is a taste of our findings. For the full report, click here

Growing Online, Growing Off

DTCs and DNBs have a lot to gain from growing their offline footprint, but perhaps the most straightforward benefit is simply more visits.  And considering the increasing difficulty and cost of acquiring new customers online – especially for a DNB that enjoys high brand awareness in the digital sphere – physical stores are an efficient way to grow a customer base and maximize ROI. 

Madison Reed: Delivering Speed

Madison Reed’s recent expansion demonstrates how a robust brick-and-mortar campaign can drive visits up both on and offline. The hair color company, which sells products for at-home application, significantly increased its online sales during COVID. At the same time, the company more than tripled its physical footprint in a little over a year, going from 12 locations in March 2020 to 38 venues in May 2021 – and then more than doubled its store count again to hit 75 Hair Color Bars in November 2022.  

Diving into the foot traffic data reveals that Madison Reed’s brick-and-mortar expansion has not only increased offline visits – the brand’s online traffic has also been growing steadily. Interestingly, the offline visit peaks of the past two years closely followed online peaks, reflecting, in part, the growing role of Madison Reed’s locations as fulfillment centers for customers picking up their online orders. Without a pick-up option, Madison Reed would have been forced to compete with other brands on delivery times and shoppers may have turned to other retailers that could have potentially delivered sooner. 

There is yet another reason why Madison Reed’s offline and online visits are growing in tandem. By offering in-person hair care services, the brand gives customers a very good reason to visit in-store. And if customers want to replicate their results at home, they can then buy Madison Reed’s products online – for delivery or pick-up – or return to the store to consult with the experts. In this way, Madison Reed’s offline channels boost online visits to the brand and vice versa. 

No Replacement for Brick and Mortar

E-commerce has grown significantly in recent decades as a highly appealing channel for retailers – and for good reason. Opening an online store is relatively easy and allows brands to potentially reach billions of customers instantaneously. 

But online retail is not rendering physical stores obsolete – instead, brick-and-mortar venues still have a critical role to play in building out a modern retail business. And when it comes to customer acquisition, brand building, and audience engagement, brick-and-mortar stores still hold significant advantages over a digital-only presence. As e-commerce growth slows and online and physical retail move towards an equilibrium, DNBs and DTCs are likely to ramp up investment in store space and continue reaping the multiple benefits of a strategically brick-and-mortar fleet. 

Read the full report, Digitally Native and Direct-to-Consumer Brands Take to the Streets, here. 

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