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. We will discuss what this strategy is, its benefits, its challenges, and the future of this strategy. We will also provide three examples of retailers who are successfully using the “Clicks to Bricks” strategy.
What is the “Clicks to Bricks” Strategy?
The “Clicks to Bricks” strategy is a process of directing online shoppers towards physical retail stores. Retailers can allow shoppers to browse an online catalog and purchase products in-store. Another option is to order online and pick up the product in-store, which is also known as the “click and mortar” model. Regardless of the chosen option, the physical retail experience starts online and ends in the store.
Multi-channel strategies like “Clicks to Bricks” are projected to generate $575 billion by 2023. Therefore, taking advantage of a share of this multi-channel spending can be beneficial for retailers.
Benefits of the “Clicks to Bricks” Strategy
Now that we know what the “Clicks to Bricks” strategy is in retail, let’s take a look at the benefits it can provide for your store.
Physical stores have lower customer acquisition costs than e-commerce. Customer acquisition costs (CAC) are steadily increasing. More businesses are turning to online sales channels to attract new customers, which means higher prices for already limited advertising slots. In contrast, having a retail store alongside an e-commerce site gives you a significant advantage. You can use the space to offer personalized experiences to customers that they cannot get online. These experiences are what drive shoppers to return to the store, giving you a steady stream of actual shoppers without investing thousands of dollars in remarketing.
The “Clicks to Bricks” strategy is important to use because in-store customers usually spend larger amounts with the company and convert more due to the ability to speak with a real person. Additionally, multi-channel customers have a lifetime value 2.5 times greater than customers who shop only online or in physical stores.
Attracting local online shoppers is important because it is risky to leave the customer’s decision to enter the retail store to chance. You can use in-store advertising or secure a spot in a high-traffic area (like a shopping mall), but many of the tactics you use to attract foot traffic to the store have a limited audience. More people are online than ever before. You can make local customers aware of your store by using social media to drive them to shop in-store.
Having a local presence is important because some customers still enjoy visiting physical stores. In fact, according to a study by Forrester Consulting on behalf of Shopify, 47% of consumers said that having a local presence had a significant or very significant impact on the brands they chose to purchase from in the past year.
Providing Experience Showcases
One major drawback to shopping online is that you cannot see, touch, or interact with the product. This is partially why return rates for online retailers are 11% higher than return rates for brick-and-mortar stores. 22% of online returns occur because customers feel that the product looks different in reality.
However, the “Clicks to Bricks” strategy gives you the opportunity to build trust with your potential customers. You don’t need to have a big store to do this. The showcase is done by operating a store with a reduced inventory that contains only your best-selling products. Online shoppers visit the store and see what the product looks like and how it feels in reality. Once they agree to purchase, they can either:
- Scan
- A store assistant can send a personalized shopping cart via email to the in-store shopper to complete the purchase online.
QR code for the product they tried in the store. The code directs them to the product page on your e-commerce site.
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 this strategy for your brick-and-mortar store.
Hiring and retaining employees is a significant challenge. Having an online store gives you a greater opportunity to choose who you hire. Additionally, when you eliminate the “bricks” part of the “Clicks to Bricks” strategy, you will also avoid high employee turnover rates. Retailers lose 60% of their employees, compared to the average of 19% across all industries.
Another major challenge of the “Clicks to Bricks” strategy is managing inventory across multiple channels. You never want a customer to see your product online, then come to see it in-store, and leave empty-handed because the product wasn’t actually available. This inventory shortage costs retailers $1 trillion annually. You can overcome this by using a point-of-sale (POS) system that collects data from all sales channels. For example, the Shopify POS system acts as a single source of truth. Inventory levels change when stock is sold through your online store or physical location. You will no longer have to make promises about out-of-stock products to shoppers who traveled to purchase them in-store.
Maintaining brand consistency, no matter where and how products are sold, is crucial. Customers expect the same shopping experience across every channel they interact with you through, including your online store, social media platforms, and physical stores. This is difficult when you can’t be in multiple places at once – which is why training store employees is important for brands that rely on a multi-channel strategy like “Clicks to Bricks”. Ensure your online and offline experiences match by equipping store employees with knowledge of the products shoppers will find on your online store. Additionally, keep the same branding across all channels. Customers who used the “Clicks to Bricks” strategy and visited a store after purchasing online stated that product availability and store decor played a significant role in maintaining consistency across both channels.
Collecting customer data in-person is crucial. “As more online stores enter the physical retail space, many fail to leverage the data they gathered in the virtual store,” according to Jeff Mix, VP of Sales and Marketing at EnergyFit. “This stems from a flawed approach that views physical stores only as a means to boost online sales, rather than the other way around.” “To correct this issue, online retailers need to organize their data into categories to better serve their customers. By using data to prepare orders for in-store pickup, bringing in popular items in a specific area, or studying past purchases to identify price ranges that fit local distributions, sales can be increased.” Shopify merchants can easily do this using the tools they already employ. Analyze the data from your point-of-sale (POS) system, which syncs with the backend of your e-commerce site, so you can track shoppers as they make purchases online and in the physical store.
The Future of the “Clicks to Bricks” Strategy
If
You were still unsure whether this strategy was suitable for your store, let’s take a look at why the “Clicks to Bricks” strategy plays a significant role in the future of retail.
It has become popular among digital native brands
A few years ago, it was easier to build an e-commerce business. However, the saturation of online channels – particularly social media – means that it is harder than ever to stand out in the noise and reach online shoppers. For this reason, many online retailers are reverting to traditional retail. For example, three DTC brands are opening physical stores adjacent to their e-commerce sites to meet the needs of individuals who prefer shopping in actual stores.
Cheap leasing and rental
Speaking of opening new stores, many e-commerce brands are opening brick-and-mortar stores because it is cheaper for them. According to Statista, “vacancy rates have increased in several sectors in the United States during 2020, but no sector has been more affected than retail.” This means that there are plenty of opportunities to find the perfect commercial space. Not only that, but the cost of renting a retail store compared to the advertising budgets of many companies has decreased. Commercial lease prices fell by 0.7% in 2021 – the first decline in nine years. Often, it is cheaper for merchants to operate a physical retail store rather than invest thousands of dollars in acquiring online customers.
Customers want in-store shopping experiences
The “Clicks to Bricks” strategy gives retailers the opportunity to provide customer experiences that are not achievable through e-commerce. Experiential retail interests 76% of people who prefer to spend their money on experiences rather than products. According to Mark Tepersohn, Head of Strategy at Afterpay, “three times as many Gen Z individuals said they shop in stores most of the time compared to those who say they shop online most of the time.” For this reason, 32% of brands said they plan to create or expand their use of pop-up experiences and personalized experiences next year, while 31% said they are planning to create or expand their physical retail presence.
Examples of the “Clicks to Bricks” Strategy
Here are three bright examples of brands that are using the “Clicks to Bricks” strategy to attract online shoppers to their physical stores.
Casper
Casper is the optimal case study for e-commerce business owners. The mattress store initially operated online only. But it is difficult to choose a mattress online. The surface you sleep on for a third of the day needs to be comfortable – something shoppers can only be assured of by touching it in reality. CEO Philip Krim says that Casper customers “go online to do their research. They enter the stores to help with their education. Often this happens simultaneously. People read about products on their phones while looking at them on the shelves. We really have to think about how we have multiple touchpoints and multiple facets to interact with customers in a way that ultimately allows them to buy from wherever they want to buy in the manner most convenient for them.”
Now, the brand has over 70 stores that its online audience can visit and test the mattresses. Experiential retail plays a significant role in those stores. “The Dreamery” was a store where sleep-deprived residents of New York could take a quick rest for $25 per session (on a Casper mattress, of course).
Sitka
Sitka
It is a retail company specializing in clothing that recently opened its first store measuring 3,000 square feet in Bozeman, Montana. The brand uses its flagship store, called “SITKA Depot”, to give shoppers the chance to experience its latest products and rely on the expertise of experienced staff.
The SITKA store is also heavily reliant on experiential retail. The physical location hosts seminars and community events, and features an in-store “Revive and Repair” service for fixing damaged products – all of which encourage online shoppers to leave their computers and head to the store.
Addor Me
The online startup “Addor Me” plans to change the way women shop for lingerie – at the heart of its strategy are hundreds of new brick-and-mortar locations equipped with modern technology and luxurious reception service.
“Addor Me” quickly achieved $100 million in sales in 2017, just five years after its founding in 2012. It is estimated that it now brings in $52.2 million annually. While this does not compare to the $7 billion in revenue of its traditional competitor Victoria’s Secret, it has not deterred “Addor Me” from firmly establishing its place in the market.
The brand opened its flagship store in Staten Island in 2018, featuring a “lingerie bar” and snacks, as well as fitting rooms equipped with “smart mirrors” that make it easy to try on different sizes right from your own private fitting room.
The brand now operates six other stores in cities such as Chattanooga, Tennessee, and Natick, Massachusetts. It invites local influencers to visit the stores and share the experience with their followers.
And here’s the interesting part: “Addor Me” plans to open more stores near existing Victoria’s Secret locations. Talk about keeping your enemies close.
“Addor Me” has succeeded where traditional brands have faltered, thanks to distinguishing factors such as a wide range of sizes, availability of plus sizes, and a focus on comfort and quality. The brand leverages inexpensive lease agreements and an increasing retail presence to draw more shoppers away from competitors.
Is the “Clicks to Bricks” strategy right for your business?
If you are hesitating whether to take your purely online brand into physical retail, there’s no time like the present. Customers are actively searching for retailers with brick-and-mortar stores they can visit to experience products in person. Gather historical sales data from your store. Do most of your customers live in a central area? Are many products purchased online being returned because the product looks different in reality? Both are signs that it’s time to consider a “Clicks to Bricks” retail strategy.
This article was originally published by Lindsey Peacock and updated by Elise Dobson.
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