Online shopping gets all the attention these days. But sometimes, there's still no beating a physical store.
British designer Lee Broom came to that realisation last May after opening a monthlong pop-up shop in Manhattan's SoHo filled with his furniture and light fixtures, including lamps made from hollowed-out marble tubes and cut crystal bulbs recalling cocktail glasses.
He had already been selling his products through his online store and about 180 retailers worldwide, including major online players like Lumens. But his temporary store in New York helped his sales in the US jump by about 50% over the 12 months through early October.
"It went incredibly well and massively exceeded our expectations," Broom said. "People want to see the pieces in person, get the scale, look at the materials and touch them."
So, last month, Broom opened his first permanent US outpost in an 800-square-foot storefront in SoHo and plans to follow it up with a location in Los Angeles in the coming months.
He is far from alone. Rather than crushing physical stores, the rise of online shopping is, in many cases, encouraging the development of new and innovative retail shops.
Companies of all sizes that once sold primarily through multibrand retailers are building on their experience running online stores by opening direct-to-consumer brick-and-mortar locations. Established retailers are shifting their focus from basic transactions to offering compelling brand experiences and higher levels of personal service.
Design stores that once catered to professionals are welcoming independent consumers, as Houzz, Pinterest and Instagram give rise to a legion of do-it-yourself decorators. And even companies that started as online-only enterprises are increasingly opening physical stores.
To understand why, just follow the money.
Online sales in the US will reach about $394 billion this year, according to estimates by the research and advisory firm Forrester Research, a number representing less than 12% of total retail sales, which the firm expects will total $3.4 trillion.
But web-influenced sales in physical stores (when a consumer researches a product on a smartphone, for instance, and then buys in a store) are expected to account for an additional $1.3 trillion, or about 38% of all retail sales.
"Stores are still vitally important," said Fiona Swerdlow, a vice president and research director at Forrester Research. "But the influence of digital touchpoints is huge."
Nargis Hakimi, a designer specialist at Saks Fifth Avenue Downtown, where product displays are inspired by websites that encourage shoppers to browse. The New York Times
Direct to Consumer
A decade ago, most websites run by designers and manufacturers were essentially digital pamphlets comprising images, descriptions and specifications of products you could buy somewhere else. But the online store soon followed, where the maker could sell direct.
Now, pleased with becoming retail players while also establishing stronger relationships with their customers, many companies are taking it a step further by opening physical stores.
Herman Miller, a modern furniture giant founded in 1923, is opening its first permanent direct-to-consumer retail store since 1967 (when it ran a small Textiles & Objects shop) in Manhattan's Gramercy Park.
The two-level 6,000-square-foot space will also include accessories from other manufacturers and vintage goods to present a complete lifestyle vision for the contemporary home. It follows the debut of Herman Miller's online store six years ago.
"With the online store, what started as a relatively small experiment has grown very rapidly," said Ben Watson, the executive creative director of Herman Miller. "The size of the business we do directly to consumers has been growing. That was a hint to us that there is a lot of untapped appetite for products from Herman Miller."
Other companies are discovering the same thing.
"In a lot of categories, you're seeing a significant shift from wholesale, as a percentage of their total revenue, to direct channels," said Al Sambar, a managing partner at the management consulting firm Kurt Salmon.
In the expectation that digital tools and social media will continue to drive more consumers to individual companies, while bypassing traditional multbrand retailers, "brands are building their capability to sell direct," he said. "It's also a way to have a personal relationship with the customer and to have them be really loyal."
Fashion designer Thakoon Panichgul, who once sold his collections through upscale retailers like Barneys New York and Bergdorf Goodman, switched exclusively to a direct-to-consumer model in August, with a new Thakoon online store and a chic SoHo boutique.
"We saw a shift in the way that the customer was shopping, or the way she wasn't shopping anymore," he said. "The customer was shopping online more and questioning the price of everything. The designer also wasn't able to control his own vision through and through. All of these components made me question the way we were doing business."
At the same time, Thakoon began presenting collections in a see-now, buy-now format, where ready-to-wear pieces are available to purchase online or in the store immediately or soon after being presented on the runway.
The strategy, which capitalises on the immediacy of social media while reducing the risk of knockoffs, is shaking up an industry where a six-month lag between runway and retailer is common.
Many other brands, including Ralph Lauren, Tommy Hilfiger, Tom Ford and Burberry, have recently been experimenting with the same thing.
Pirch, a 32,000-square-foot kitchen and bath store, encourages customers to turn on fully functional faucets and showerheads or take in live cooking demonstrations, rather than merely looking at disconnected fixtures and appliances. The New York Times
Enhanced Experiences
At Saks Fifth Avenue Downtown, the department store's 86,000-square-foot women's store at Brookfield Place in Lower Manhattan, which opened in September, product displays are inspired by websites that encourage shoppers to browse.
Where traditional department stores keep handbags separate from clothing, at Saks Fifth Avenue Downtown, an edited range of goods is organised by designer label, with handbags, ready-to-wear and jewelry commingling on a circular path intended to inspire surprise finds.
"We wanted to de-compartmentalise the department store," said Marc Metrick, the president of Saks Fifth Avenue. "That's not how she shops anymore."
"In some displays, we lay things down flat on tables, just like you'd see on a website," he added.
But Saks' embrace of technology is about more than mere surface treatment. The company has rolled out applications from the retail technology company Salesfloor that enable online saks.com visitors to live-chat with a sales associate at a nearby physical store.
After browsing product suggestions online, shoppers can make an appointment to meet their sales associates in person, to continue shopping. And even after the in-person visit, the shopper can follow up with the very same sales associate again, online.
"Saks, overall, is transforming. We're really pushing this all-channel experience," which blends the digital and physical, Metrick said. "The goal is to keep that interaction going."
Other stores embracing a similarly mixed approach include Rebecca Minkoff in SoHo and the Polo Ralph Lauren flagship on Fifth Avenue, which have smart touch-screen mirrors in fitting rooms that suggest coordinating pieces for items a shopper is trying on, enable alternate sizes to be summoned from staff and can send links to products via text message so customers can purchase them later, online.
At Brookfield Place, Saks is also offering highly personalised services, including its new Power Lunch programme, which promises to deliver a style consultation, beauty treatment and lunch together in one hour. The service is free, except for the cost of products a consumer decides to purchase.
"We're seeing this convergence where it's the best of both worlds," said Steven Barr, the US retail and consumer leader at PricewaterhouseCoopers. "It's centred around extraordinary technology and extraordinary customer service."
"Rather than treating online and in-person sales as two separate channels,'' he said, "We're finally entering that state where we can say there is a total retail experience."
Other retailers are focusing on offering shoppers a chance to try products in a way they can't online.
Pirch, a 32,000-square-foot kitchen and bath store that opened in SoHo in May, encourages customers to turn on fully functional faucets and showerheads or take in live cooking demonstrations, rather than merely looking at disconnected fixtures and appliances.
Sonos, the wireless-speaker company whose products are widely available through retailers like Amazon.com and Target, opened its first direct-to-consumer retail store in SoHo in July. Shoppers can stream their own choice of music to test different configurations of speakers in a series of private listening huts.
Professional Sources
Many home-design showrooms were once the domain of professional designers and architects. Most homeowners either didn't know they existed or were purposely excluded. With the widespread availability of designer resources online, that has changed.
Showrooms are increasingly fielding requests from individual homeowners who want to buy direct, and many are opening street-level retail stores to become more accessible.
Poliform, an Italian manufacturer of streamlined kitchens, closets and furniture, has long had a showroom inside the A&D Building in midtown Manhattan, where it catered largely to design professionals. But at the end of September, it opened a 10,000-square-foot street-level flagship store on Madison Avenue to have a larger retail presence.
"While the A&D Building showroom remains, it's a destination for people who know we're there, not really a retail location," said Laura Anzani, the chief operating officer of Poliform USA.
"The Madison Avenue store, which is designed to resemble an extravagant, enormous apartment, is a big billboard," she said. "It's totally different being on the street. Before the store was even open, people came in and bought things."
Exquisite Surfaces, a wood-flooring, stone and tile company that was also previously in the A&D Building, moved into a street-level store in Manhattan's Hudson Square neighborhood last month. The 5,000-square-foot space includes elements to make shoppers feel at home, like seating areas inspired by residential settings.
British designer Tom Dixon opened an expanded 3,000-square-foot store in SoHo in July, after establishing his first 1,000-square-foot US retail store last November.
Previously, Dixon, who produces sculptural copper, brass and chrome light fixtures as well as furniture and tabletop objects, ran a New York showroom for professional designers that was open by appointment only.
Clicks to Bricks
Perhaps one of the most surprising retail trends is the proliferation of physical stores opened by companies that started out as online-only enterprises.
M. Gemi began last year as a web-based, direct-to-consumer business selling its own line of high-end Italian-made shoes that cost about half as much as similar luxury goods. With shoes ranging from about $150 to $600 per pair, the company describes its prices as "postluxury."
In September, it opened its first brick-and-mortar store in SoHo.
"It's to let her try shoes on, feel the fabric and experience the brand in a tactile way that she can't experience digitally," said Ben Fischman, the company's chief executive and co-founder.
There is only minimal inventory in the store; the vast majority of purchases are shipped directly to a shopper's home, just like online purchases. And if shoppers do not want to make a purchase on the spot, store staff can add items to their online shopping carts for later consideration.
"We want the in-store experience to really influence what your digital experience becomes," Fischman said. "When she goes home and logs on, sitting there in her cart are the shoes she said she wanted to buy."
M. Gemi follows in the footsteps of companies like the eyewear brand Warby Parker (whose latest store is due to open inside Grand Central Terminal this month) and the menswear brand Bonobos (which opened its fifth New York store in midtown in September).
Both started out as online retailers but now have an extensive network of physical stores.
None of these stores carry inventory. Shoppers can try products on but then place orders to have purchases delivered.
At Bonobos, "It was a really humbling discovery to learn that retail stores were going to be one of the core parts of what was originally conceived as a digital-only brand," said Andy Dunn, the company's chief executive, who describes his business as "digitally native."
After opening fitting rooms at New York-based Bonobos' headquarters in 2011, Dunn said, he was amazed at how they accelerated sales, and he hatched the idea of the company's so-called guideshops.
"The guideshops attract a really high-value customer," Dunn said. "He spends more money, he's more valuable in the long run, and he's more engaged with more categories. He's buying sweaters, suits, dress shirts and outerwear, in addition to our iconic better-fitting pants."
Many new companies are now running with that model.
AYR, a women's fashion brand that Dunn helped start, opened a showroom on the eighth floor of 648 Broadway in NoHo in June, where customers can drop in or book a champagne-and-snacks try-on session with friends for $100, which can be used as credit toward purchases.
Next year, AYR plans to open a street-level store.
Other digitally driven companies are opening physical stores that do have products in stock.
AHA Front in Dumbo, Brooklyn, offers home and personal accessories, including sculptural ceramic vases and angular beer glasses. Pintrill in Williamsburg sells fashionably whimsical pins. And the outerwear brand The Arrivals is running a pop-up shop in SoHo through the end of this month.
Paradoxically, the rise of online shopping may just make this one of the most exciting times in recent memory for shoppers to get back out onto city streets.