Direct-to-Consumer-to-Retail: Planning for the Omnichannel Future

In the past decade, we’ve witnessed countless brands begin and thrive online – their names becoming synonymous with category defining products. Casper with bedding, Dollar Shave Club for razors and Glossier for beauty. These up-and-coming stories prove that brands no longer need to start with a physical distribution channel to win with consumers – even for those selling products that consumers were typically accustomed to sampling, testing, and trying before buying.

Our client, Hill House Home, opened a store during the holiday season to help their customers (the majority of whom are in New York) mitigate shipping delays.

Today we’re on the cusp of change, as brands that paved the way for digital-first success are leaning into an omnichannel strategy. Building an ecommerce site is still the most capital-efficient way to get your business off the ground, however the dynamics of the channel are changing. Today, anyone with a laptop can build an entire brand, creating an arms race to capture the hearts and minds of consumers through rising customer acquisition costs.

Now, immersive, experiential physical retail spaces are becoming the go-to playbook for companies looking to secure their edge over emerging players. And it makes sense: their millennial supporters are evolving from fresh-faced to financially secure with disposable income to shop their values and favorites.

Today, consumer brands should diversify their investment by aiming for both digital and physical success – with the combination of the two proving to be a powerful tonic for symbiotic success. Some of our clients consider their digital channel a presence to experiment with new product offerings before launching to wider retail outlets, while others use their platform to create exclusive offers and loyalty-building initiatives. Direct-to-consumer businesses are defined by their ability to meet the consumer where they are, and their demographic is very online – on average they spend more than 3.5 hours a day online.

Brands We Love: Goop is expanding beyond its physical retail outposts and robust online editorial/ecommerce presences with the launch of Goop Kitchen; on-demand healthy food that takes the brand backs to its roots. This is the natural extension for a company whose consumers are very online.

That said, while e-commerce has become a frontier for opportunity, a pure-play approach comes with a host of drawbacks. As mentioned earlier, it’s challenging for brands to stand out in an era of easily selling online. Physical retail becomes a natural evolution and an opportunity to build a connection with your customers.

Here’s a few examples of how a physical retail compliments an online channel:

  • It solves a problem – Our client, Hill House Home, launched a pop-up shop in November to ensure clients could get gifts in time for the holidays amidst unpredictability with the supply chain. That’s how you take lemons and make lemonade.
  • It unlocks a complementary service offering – Warby Parker provides on-site eye exams.
  • It powers an immersive store experience – Glossier’s outposts mirror the landscapes they’re built upon; resulting in spaces that are memorable, Instagrammable and ensures any Glossier store you visit is truly one-of-a-kind, driving a sense of mystery, magic, and urgency.
  • It elevates convenience and conscience – Our client, Studs, uses their piercing studios to educate consumers on piercings and after-care, while their online channel becomes a place for consumers to build repeat purchases for their earscape.
  • It fosters a community among a brand’s customers – Think Lululemon’s in-store yoga classes.

Our client, Studs, pierces customers in a safe, supported environment which creates lasting loyalty for repeat purchases on their online retail channel.

Need more proof? Your customers are everywhere: 73% of shoppers use multiple channels to research a purchase. Research also shows that there’s a +190% increase in revenue when brands sell on more than one channel.

The omnichannel experience is about more than giving consumers many places to buy. The true power of omnichannel is realized when your online and physical retail work together in harmony to immerse consumers in a highly personalized experience that also respects the stage of the buying cycle the consumer is in.

Brands We Love: Glossier’s retail experiences are unique each and every time. Their Seattle store mirrors the lush green landscapes of the pacific northwest, whereas their Miami pop-up is bright and bold that matches the vibrancy of the city.

We’re excited to lead the way. If you are too, get in touch to learn more about how Pact can help you craft an omnichannel strategy that is built to convert and delight.

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