Retail IRL

What can we learn from digital native brands?
Posted March 4, 2019

Digital native  brands are expanding their presence in physical retail across the U.S., with plans for 850 new stores in the next five years, according to “Clicks to Bricks,” a 2018 report from commercial real estate firm JLL (Chicago).

It’s no surprise that New York is the top city for digital native brands to open premier pop-ups as well as the city chosen if and when they move on to opening permanent locations. Los Angeles and Toronto are ranked second and third for both “first pop-up” and “first physical store,” according to the report.

SoHo, in particular, which is home to countless pop-ups from digital native brands like Warby Parker and Google, rules the New York scene, with nearly half (48 percent) of digital native brand pop-ups located there. On the whole, store size is relatively small, with the average footprint of a clicks-to-bricks store at 2808 square feet.

If there’s one major difference between online and physical retail, it’s the ability to gather and leverage an abundance of consumer data. E-commerce brands live and die by their ability to use customer data to tailor offerings to the customer, whose behavior they understand extremely well thanks to the prevalence of e-commerce analytics tools.

Whether that data illustrates which products sell better by geographic region, so merchandise can be curated for the local market (as Nike does at both its Los Angeles and New York flagships), or fulfilling in-store orders online to eliminate back stock and keep footprints modest, traditional retailers should take note. These strategies seem certain to delight shoppers and improve the bottom line – a common mission that all brands share.