In this article, we will take a look at how retailers can use the “clicks-to-bricks” strategy to attract online shoppers to physical stores.
What is the “clicks-to-bricks” strategy?
The “clicks-to-bricks” strategy is the process of directing online shoppers to your physical retail space.
Retailers can allow shoppers to browse an online catalog and purchase products in-store. There can also be online ordering with in-store pickup, a model also known as clicks-and-bricks. Regardless of the method, the physical retail experience begins online and ends in-store.
Retailers adopting a multi-channel strategy (such as clicks-to-bricks) are expected to generate $575 billion by 2023.
Benefits of the “clicks-to-bricks” strategy
Now that we know what the “clicks-to-bricks” strategy is in retail, let’s look at the benefits it can provide for your store.
Physical stores offer lower customer acquisition costs.
Customer acquisition costs (CAC) are constantly rising. More businesses are turning to online sales channels to attract new customers, resulting in increasing costs for already limited advertising slots. According to a study by Forrester Consulting commissioned by Shopify, 32% of brands said they will create or expand their use of temporary and personalized experiences in the coming year, while 31% plan to create or expand their presence in physical retail. Download the full report to learn more.
With a retail store running alongside your e-commerce site, you’ll gain a significant advantage. Rent is now being described as the new CAC. For DTC (direct-to-consumer), one of the key values was low prices due to low costs: physical store leases and rents are the largest. But that has changed now to the point where you have to spend money on Facebook/Instagram/Google ads to acquire customers… likely as much or more than you would spend on rent and/or leases. So the price edge that original digital brands might have had is gone. Griffin Caprio, CEO and Managing Director at Dante32
Thanks to the physical location, you can use the space as a means to provide personalized experiences for modern customers who aren’t getting them online. These experiences are what drive shoppers back to the store, providing you with a steady stream of foot traffic without spending thousands on remarketing.
Capturing local online shoppers
When it comes to customer acquisition, it’s risky to leave the decision of whether a customer walks into your retail store up to chance. Of course, you can use retail signage or secure space in a high-traffic area (like a shopping mall), but many of the in-person tactics you use to drive foot traffic have a limited audience.
There are more people online than ever before. Facebook has nearly 180 million users; Instagram has 119 million. Inform local customers about your store using social media to lure them into the shop.
“The challenge is knowing who to market your retail location to,” says Jeff Moriarty, Marketing Director at Moriarty’s Gem Art.
“One of our most successful strategies is pop-ups, which target people within a 20-mile radius of our store. This is done through an app, but it promotes our retail store to anyone near our location who visits our website. We get a few people each week who tell us they went to our website and didn’t know we were in the same city. It’s been a game-changer for our physical retail location.”
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Professional Tip: Geolocation targeting is a great way to attract and convert shoppers who are within your store’s radius. Consider using location-based marketing to reach nearby shoppers. Once you launch your campaign, display a sales report by billing location in your Shopify admin to see if online sales have increased near your store.
Providing a Local Presence
Thinking about closing your store and moving exclusively to e-commerce? While having an online presence opens you up to a larger pool of potential customers, some customers still enjoy visiting physical stores.
In fact, according to a study by Forrester Consulting at Shopify’s request, 47% of consumers said having a local presence significantly or very significantly influenced the brands they chose to buy from in the past year.
My opinion is very simple: follow where the customer is. Today’s customer increasingly starts their journey online. It has long been a crime that brands do not provide the same level of assistance or service that they do in the physical retail world as they should online. Adam Levin, founder of HERO
The best part? You don’t need to open your own store to raise brand awareness among local shoppers. For example, Peloton partnered with Outdoor Voices to create a co-branded activewear line. The new collection was displayed in 17 Peloton showrooms. Both brands gained additional visibility in locations where they didn’t already have stores.
Offering Pop-Up Experiences
One major drawback of online shopping is that you can’t see, touch, or interact with the product. That’s part of the reason that return rates for online retailers are 11% higher than those for physical retailers. Additionally, 22% of online returns occur because customers feel the product looks different in real life.
However, the “clicks to bricks” strategy gives you the chance to build trust with potential customers. You don’t need a large store to do this.
A pop-up operates by running a store with a limited inventory that only contains your best-selling products. Online shoppers visit the store and see what the product looks and feels like in real life. Once they give the green light to purchase, they can either:
- Scan the QR code for the product they tried in the store. The code directs them to the product page on your e-commerce site.
- A store associate can send a personalized shopping cart via email to the in-store shopper to complete the purchase online.
Challenges of the “Clicks to Bricks” Strategy
While the “clicks to bricks” strategy has its advantages, there are some challenges you should be aware of when implementing the strategy for your physical retail store.
Hiring and Retaining Staff
Having an online-only store gives you more flexibility regarding whom you hire. Additionally, by foregoing the “bricks” part of the “clicks to bricks” strategy, you will also avoid high turnover rates. Retailers lose 60% of their staff, compared to the average of 19% across all industries.
Not only is hiring replacement staff frustrating, but it’s also an expensive task. In addition to the average hourly wage of $13.53, you can expect to pay between 33% and 50% of a sales representative’s salary in recruitment and training costs to replace them.
Managing Multi-Channel Inventory
Managing inventory across different channels poses a significant challenge in the “clicks to bricks” strategy.
You don’t want to find yourself in a situation where a customer sees your product online, comes to view it in-store, and leaves empty-handed because the product was not actually available. This stockout costs retailers $1 trillion annually.
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This is done through using a Point of Sale (POS) system that gathers data from all sales channels. For example, Shopify POS acts as a single source of truth. Inventory levels change when stock is sold through your online store or physical location. Out-of-stock items will no longer be counted for shoppers who traveled to purchase them in-store.
Maintaining Brand Consistency
Regardless of where and how products are sold, consistency is crucial. Customers expect the same shopping experience across every channel they interact with you, including your online store, social media platforms, and physical retail locations.
This is challenging when you can’t be in multiple places at once – which is why training retail store employees is incredibly important for brands with a multi-channel strategy such as “clicks to bricks.” Ensure that your online experiences and others align by equipping store staff with knowledge of the products that shoppers will find in your online store.
Similarly, continue the same differentiation across every channel. Customers who visited the retail store after buying online said that product availability and store decor played a significant role in maintaining consistency across both channels.
Collecting Customer Data In-Person
“As more online stores enter the physical retail space, many fail to leverage the data they’ve collected in the virtual space,” says Jeff Mix, Vice President of Sales and Marketing at EnergyFit. “This comes from the flawed approach of viewing physical stores solely as a means to boost online sales rather than the other way around.”
“To fix this issue, online retailers need to organize their data into categories to better serve their customers. Using data to prepare orders for on-site delivery, bringing in popular items for a specific area, or analyzing past purchases to determine price ranges that suit local demographics can drive increased sales.”
Shopify merchants can easily do this using the tools they already have. Analyze data from your Point of Sale (POS), which syncs with your e-commerce backend, so that you can follow shoppers as they purchase online and in-store.
The Future of the “Clicks to Bricks” Strategy
Are you still unsure whether you should adopt this approach for your store? Let’s take a look at why the “clicks to bricks” strategy plays a significant role in the future of retail.
Original digital brands have seen a rise in popularity
A few years ago, it was easier to build an e-commerce business. But the saturation of online channels – particularly social media – means it’s harder than ever to stand out from the noise and reach online shoppers.
This means many online retailers are taking steps to return to traditional retail. Kohara + Co, Texas Tushies, and House of Novogratz are three DTC brands opening physical stores alongside their e-commerce sites to cater to those who prefer in-store shopping.
The new House of Novogratz on Abbot Kinney will give us the opportunity to expand the Novogratz brand and reach new audiences through in-store and online partnerships, collaborations, and events, said John Frieerson, President of The Novogratz.
Cheap rent and leasing
When it comes to opening new stores, many DTC brands are opening physical retail stores because it’s cheaper for them to do so. According to Statista, “Vacancy rates in several sectors in the U.S. increased during 2020, but none more than in the retail industry.” This means there are plenty of opportunities to find the perfect commercial space.
And not
that alone; the cost of renting a retail store compared to the advertising budgets for many companies. Retail lease prices fell by 0.7% in 2021 – the first decline in nine years. Often, it’s cheaper for retailers to operate a physical store than to invest thousands of dollars in acquiring customers online.
Customers Want In-Store Experiences
The “clicks to bricks” strategy gives retailers the opportunity to provide customer experiences that cannot be achieved through e-commerce. Retail targets the personal experience of individuals who prefer spending their money on experiences rather than products.
According to Mark Tiberius, Head of Strategy at Afterpay, “Three times as many people from Generation Z said they shop in-store most of the time compared to the number of people who said they shop online most of the time.”
For this reason, 32% of brands said they will create or expand their use of temporary and personalized pop-up experiences in the coming year, while 31% said they plan to create or expand their presence in physical retail.
Some of the best retail experiences I’ve had were actually. What I look for as a modern consumer is value. I don’t mean value in terms of prices. I mean the value of the experience. Harley Finkelstein, President of Shopify.
Urban Bodutori, Product Manager at Shopify, said, “Online retail traders were some of the first to discover that retailers must adapt to a new purchasing journey that often starts on Instagram, continues to their online store, and includes a lot of pre-research on the brand and products.”
Urban said, “They built their online stores to serve shoppers at any stage of their journey, and now they’re applying that thinking in their stores. Their in-store experience is not just designed to make sales within their four walls,” says Urban. “The experience aims to enhance connection and conversation, giving shoppers a chance to touch and feel their products. Thus, first-time shoppers can turn into brand ambassadors.”
Take it from LIVELY, a lingerie seller that offers in-store fitting experiences for customers to find their ideal size. Nearly a third of its in-store revenue comes from those click-to-brick customers. “We’re talking about a product that is very personal, so the experience must match that,” says founder Michelle Cordeiro Grant.
Customers Expect Seamless Shopping Experiences
We briefly touched on the fact that brand consistency poses a challenge for retailers adopting the “clicks to bricks” strategy. Modern customers demand that shopping experiences be seamless across the various channels they use.
Options like buy online, pick up in-store (BOPIS), and curbside delivery are becoming more popular. Three-quarters of online shoppers prefer those personal pickups over traditional delivery, largely because it’s more convenient. They don’t have to wait or pay for delivery costs on items they ordered online.
As part of your “clicks to bricks” strategy, offer in-store pickup services like BOPIS or local pickup. Incentivize online shoppers to take those options by offering them for free (as opposed to $2.99 for two-day delivery).
Once they visit your store, there’s potential to sell other items at the pickup counter, increasing revenue and continuing the shopping experience across both online and in-store channels.
3 Examples of the “Clicks to Bricks” Strategy
Here are three bright examples of brands using the “clicks to bricks” strategy to draw online shoppers toward the retail store.
Casper
Casper is the optimal case study for business owners in the e-commerce space.
It was
The Rank Store originally operates online only. However, it is difficult to choose a mattress online. The base that you sleep on for a third of the day needs to be comfortable – something that shoppers can only be sure of by touching it in real life.
CEO Philip Krim says that Casper customers “go online to do their research. They enter stores to assist their education. Often this happens at the same time. People are reading about products on their phones while looking at them on the shelves.
We really have to think about how to have multiple touchpoints and multiple aspects to engage with customers in a way that allows them to purchase from wherever they want to buy in a way that is more convenient for them.”
“Think about building this into an infrastructure that is channel-agnostic,” says Philip. “We are very happy if you purchase Casper products through one of our retail partners in addition to our own self-operated stores or on our e-commerce website.”
Now, the brand has more than 70 stores that can be visited by its online audience to test mattresses. Experiential retail plays a huge role in those stores. The Dreamery was a store where New Yorkers suffering from sleep deprivation could take a quick nap for $25 a session (on a Casper mattress, of course).
SITKA
SITKA is a specialty clothing retailer that recently opened its first retail store, a 3,000-square-foot space in Bozeman, Montana. The brand uses its flagship store, called SITKA Depot, to give shoppers a chance to experience its latest products and rely on the skills of experienced staff.
The SITKA store is also heavily reliant on experiential retail. The physical location hosts community seminars and events, and features an in-store Revive and Repair service to fix damaged products – all of which drives online shoppers away from their computers and into the store.
SITKA relies on its commitment to enhancing the entire hunting experience, and its first retail store is seen as an opportunity to expand this principle. “Customers will not only have the chance to build custom systems that work for their specific hunting style, but they will also be able to connect with others who share the same passion for the hunting lifestyle,” says Jonathan Hart, founder of SITKA.
Adore Me
The online startup Adore Me plans to change the way women shop for lingerie, and at the core of its strategy are hundreds of new physical locations equipped with high-tech tools and concierge services.
Adore Me quickly achieved $100 million in sales in 2017, just five years after its founding in 2012. It is estimated that it now generates $52.2 million annually. Although this barely touches the $7 billion revenue of its traditional competitor Victoria’s Secret, it does not deter Adore Me from carving out its own niche in the market.
It opened its flagship store in Staten Island in 2018, complete with a lingerie bar and snacks, and equipped fitting rooms.
Source: https://www.shopify.com/retail/clicks-to-bricks
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