(Image Source: Shopify)
Ten years ago, with the development of technology and the introduction to e-commerce, DTC brands found a dreamland to boost sales with reasonable extra costs. But with the evolution of the retail landscape, brands cannot solely rely on e-commerce channels. In fact, more and more DTC brands choose to embrace omnichannel retail and open physical stores.
Why are DTC brands turning to physical stores?
With the competition on the online landscape becoming fierce, the price of social media ads have soared and it is no longer a cost-effective option for early-stage businesses. Omnichannel is the next option on the line and will be the prerequisite for the future growth for any DTC business.
Firstly, the tendency to open physical stores is due to the increase in customer acquisition cost (CAC). The growth rate of CAC was over 60% for the last 5 years which forces digitally native brands to rethink their business models. In other words, they either have to switch or expand into physical retail in order to lower the CAC.
Next, physical stores are a good way to redesign customers’ shopping experience, which e-commerce hardly replicates. Advanced-thinking DTC brands will sooner or later come back with brick-and-mortar stores to bring immersive experiences and improve their customer retention rate.
Thirdly, physical stores allow DTC retailers to offer a physical, tangible aspect of their brand. Creating the tactile retail experience by allowing customers to touch, see, and feel products in real life can foster the connection between customers and the brand, which helps to strengthen the brand image.
Lastly, the impactful advantage that comes with opening physical stores is that it allows brands to create a community. Having a place where people can gather, connect, and feel comfortable would surely build up customer relationships and loyalty.
What would the future retail store look like?
Modern physical retail stores will be coming back with an even greater focus on creating an engaging experience, providing excellent customer service and human interaction.
Apart from that, to adapt to the pandemic situation, many brands have offered services like buy online, pick-up in-store (BOPIS) options or even transforming their physical stores into distribution hubs or fulfillment centers.
No matter the approach, the idea of typical physical stores is changing.
Let’s take a look at 11 DTC brands opening stores in 2021.
- Mose Mary & Me
- Texas Tushies
- YGO Black Market
- Heaven’s Market
- Kohara + Co
- Business & Pleasure Co
- 5 Element Pet Food Therapy