Your favorite web store may now (or soon) be down the street – at least if it follows in the footsteps of Warby Parker.
The hipster chic eyeglass web store has kept prices low by avoiding storefronts. But now that the business is doing well, it is expanding its footprint to physical space. With eight brick and mortar stores in trendy shopping neighborhoods like Abbot Kinney Boulevard in Los Angeles, they are turning a profit in the brick and mortar world as well. Dave Gilboa, the company’s co-founder and co-chief executive, reported that the eight stores together are collectively turning a profit and sell an average of $3,000 a square foot annually. It’s higher than most brick and mortar retailers, save for Apple stores.
A success, and still growing. The storefront success started as an experiment in April 2013 when the company opened its first physical retail showroom in the SoHo district in Manhattan. By the end of the year, the current eight retail stores will be joined by storefronts in San Francisco and Chicago.
“We quickly realized that while we were seeing all the benefits we were expected from branding and marketing – the ‘halo’ effect of having a store open – stores could be a meaningful driver of sales and profitability, which was really unexpected,” said Mr. Gilboa.
Other companies experimenting with physical stores, too. Warby Parker isn’t the only online company to experiment with brick and mortar stores. RentTheRunway, a high fashion rental company, has three shops and has plans to open its fourth in Washington D.C. Amazon.com Inc. will be opening a brick-and-mortar location in New York for the holiday season. Bonobos, a New York based men’s retailer, is aiming to have 40 outlets open by the end of 2016.
These companies face some problems when they choose to move offline. There are larger overhead costs, employees to hire and train and multi-year leases to consider. However, the payoffs of increased revenue as well as reduced shipping time to home customers can offset these problems.