Online first – that was the motto for many years. But more and more online shops are also opening up bricks-and-mortar stores. What are their reasons, and which different concepts are they using?

Oberhausen in the Ruhr area got a new attraction at the end of last year: Amazon launched its first German bricks-and-mortar shop in the city’s Centro shopping centre. Customers will find a pop-up store where they can experience Amazon products. With this move offline, the Internet giant is in good company. Zalando, Mister Spex, myToys, and other companies that started online are now welcoming their customers into their offline shops.

Online and bricks-and-mortar retailers benefit from each other

myToys opened its 17th branch in October 2017. Founder, Chairman, and Managing Director Oliver Lederle says of the strategy: “As a successful and longstanding omnichannel retailer, we are betting on a consistent integration of all relevant sales channels within the customer journey. Bricks-and-mortar retailing still plays an important role here. The synergies of cross-media networking ultimately strengthen the myToys brand, increase customer loyalty, and increase sales across all purchasing channels. Online and bricks-and-mortar retailers are clearly benefiting from each other at myToys – both channels are growing sustainably.”

The online business is still far behind bricks-and-mortar retailing

The goal behind this development is to meet the customer wherever they are. Depending on the sales channel, the prospective customer has different needs. In the store itself, customers can try out products, test them, feel them. They can interact with the sales staff and get information together with friends or family. If things need to be done quickly and products are needed on the same day, a bricks-and-mortar store can be beneficial. In addition, the numbers speak for themselves. Online retail is growing, but still lies far behind classic retail. According to a forecast by the HDE trade association, German retail is expected to generate total sales of €501.2 billion in 2017, with online retailing generating €48.7 billion of that. Pure players with only one distribution channel are simply missing out on sales, hence the expansion towards multichannel and omnichannel retail.

Mirko Caspar, Managing Director of Mister Spex, confirmed this at the opening of the online optician’s sixth bricks-and-mortar shop this past August: “We aren’t surprised by this trend of classic retail business increasingly becoming more multichannel. For us, it’s a logical development. We firmly believe in our three-pillar offer: online shop, partner opticians, and bricks-and-mortar shops. This gives the customer the opportunity to choose the channel that suits them best.”

The bricks-and-mortar shop can serve as a showroom or guide shop

A bricks-and-mortar presence has further advantages for companies. It can serve as a showroom, as seen in the strategy of online furniture retailer Fashion for Home. At eight locations, customers can try out a selection of furniture. This concept can increase the brand’s credibility and trustworthiness, and overcome the customer’s reluctance to make relatively large, expensive purchases online. In addition, a shop can encourage customers to shop spontaneously. The online men’s outfitter Bonobos told the Guardian newspaper that shoppers shop twice as much in the shop as online. The concept is remarkable: Bonobo conceives of its in-store business as a “guide shop”, which takes the male visitor by the hand. An employee accompanies the customer while shopping and helps him to find exactly what he is looking for. Afterwards, he doesn’t have to carry the bags around, because the products are delivered to his home or office.

Shopping as an experience is only possible offline

The ILG Group is an investor in retail real estate. As such, it has contacts with all the major tenants, project developers, and service providers. Florian Lauerbach, managing partner of the ILG Group, summarises the rethink in the online business world: “Pure internet providers are having problems with turning a profit. Sales are not everything. Bricks-and-mortar retailers are expanding into the Internet and cleverly combining their services with the possibilities of online retail. You can buy locally or on the internet. You can pick up the goods at the store or have them sent to you. The opportunity to offer the customer a comprehensive range of services requires that you be present on all channels – both online and offline. More and more pure Internet service providers understand this. That’s why they are increasingly setting up bricks-and-mortar stores. Other non-bricks-and-mortar retail forms understood this in the past. Consider, for example, the almost 70 shops of Baby Walz, which was originally a catalogue retailer. Presenting brands or shops in public spaces, touching the goods, getting personal advice, maybe even shopping together with friends and having a coffee afterwards – all of that is only possible offline.”



Bild: Zalando