How DTC brands will approach physical retail in 2021
What: a reflexion on why physical retail is still important, even for Digitally Native Vertical Brands (DNVBs)
Why it is important: with the store closures and the travels on hold all over the world, online sales have skyrocketed since the beginning of the pandemic. It has forced some major retail actor to find digital solutions to stay afloat, while it was easier for the Direct-To-Consumer (DTC) brands that are born online. However, pre-pandemic, many DTC were making their entry on the offline market. Retail Dive looks at how they might continue to explore physical retail after the pandemic
At first selling directly to the consumer online and cutting out the middleman was an opportunity for DTC brands to save costs and offer a unique experience. Now that this segment is crowded, marketing cost have duplicated in the race of attracting more customers. Going offline allow for DTC brands to reach another audience.
Generally DVNBs need less space to showcase their items, and they usually link the physical space to digital activations such as try-instore-order-online, following some sort of showroom model that allow them to show their products physically, without needing a huge space.
However, the downside to that is that customers can rarely walk away with a product the same day. Offering merchandise in stores also forces digitally natives to completely rethink their operating model and supply chains: shipping goods to a consumer's home is different than shipping goods from one physical locations to another to manage the stocks in case one item is sold out somewhere for instance).
Also with the pandemic now local, suburban retail is exploding, as many consumers now work from home and remain in their immediate surroundings to shop. This will be new testing grounds for DTC brands, and pop-ups should be even more used in the small cities in the near future.
As the future is still pretty blurry for retail, it might not be too reassuring to DNVBs to plan an opening and negotiate with a landlord for a space. Therefore, partnerships with established retailers should continue to grow (think bedding brand Casper who already had a partnership with retailers including Target and who extended this partnership to Nordstrom in November 2020).
How DTC brands will approach physical retail in 2021
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