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What DTCs Are Missing As They Open Physical Stores

Benjamin Y. Seldin,  Strategy Director

In the years leading up to the current pandemic, Casper, the bedding brand, was in the midst of opening 200 stores across North America. It was among a number of direct-to-consumer companies (“DTCs”) opening physical stores at a rapid pace. While these brands are likely now reconsidering expansion plans, this trend will not disappear. DTCs experience awareness and a surge in online sales in markets where they open a physical location.

From the design of their stores to the purposes they serve, I’ve noticed commonalities in how DTCs treat brick and mortar. And I’ve wondered: does their digital origin produce a particular approach toward physical stores? So, right before the pandemic, I journeyed through a bunch of them, most of which are recent additions to Boston, to investigate. 

I found most share an emphasis on product demonstration and prime location – as well as a shortage of personality. It’s like they applied their focus on user experience in the digital space to the physical one. But that strategy is fading in digital, and it is in real life too. So in the following, I’ll identify how DTCs are missing personality as they enter brick and mortar and offer suggestions for improvement and greater opportunity.

 

Let’s look at some examples

We’ll begin outside the DTC world with Filson, the heritage clothing brand that started in 1897. In speaking with a sales rep there, I learned that before the company opened a store in Boston’s gleaming new Seaport District, Alex Carleton, its Chief Creative Officer, took time scouring New England for unique antiques to fit Filson’s rugged, hip American aesthetic. The result is a quirky space with a larger-than-life wooden bear at the entrance that both greets and frightens customers, and dressing rooms that could be guest rooms at the Ace Hotel. 

When compared to Away, the DTC retailer that later opened next door, Filson’s store contrasts greatly. Away is sparse, efficient, and transactional. It mainly encourages customers to test its flagship product, a well-designed suitcase. Similarly, the shoe brand Allbirds, famous for using wool, features wool swaths to touch and detailed explanations of the material’s benefits. Indochino, a menswear company, displays a wall of fabric swaths to exhibit color and variety. For these DTCs, product demonstration is paramount.

 

Location, location, location

Like the real estate adage says, location is also a big factor. Many of the DTCs I visited are in Boston’s Seaport District. Maggie Smith, head of marketing at the neighborhood’s developer explained, “co-tenancy continues to be a main part of the conversation…there’s a transition going on, from brands wanting to know traditional real estate metrics to those that are more consumer-driven; [before moving in] they want to know the social clout of the place itself.” In normal times, the Seaport District bolsters its social clout with pop-up villages including rows of local retailers. The pop-ups benefit from the legitimacy of the larger players, and the larger stores enjoy the freshness of the pop-ups. 

 

Single products

DTC stores are often built around single products. This approach can feel contemporary in the online world but incomplete in the physical one, where even brands using the showroom model (with just a few sizes for each item) still offer a full line. Casper understands the value of a full line and expanded a while back from a single mattress to a spread of sleep-related products that fill its brick-and-mortars. It went even further as it recently prepared for IPO, attempting to become “the Nike of sleep.” It assembled a “sleep advisory board” and instituted internal policies to rally around quality sleep. While it faced an uphill battle in a competitive environment, this was the right play, albeit a bit late in the game.

 

Advice and opportunities for DTC brands

If you’re a DTC using this period to plan brick and mortar expansion, here are some ideas.

    1. Pick your moment. If you don’t yet have a full product line, consider a pop-up store in a choice location first.
    2. Let personality lead design. Dig into what makes your brand’s personality unique and reflect it in design. If your brand doesn’t have much personality, start by developing one.
    3. Connect product to personality. Even functional elements should convey personality. Consider how Apple’s genius bar took what historically was a routine service and made it a branded centerpiece that embodies the brand’s charisma.
    4. Think big and small. What makes Filson’s Seaport store impressive isn’t just the things you first see like the big bear. It’s the details like dressing room fixtures and antiques that unveil themselves the more time you spend in the store.

If product-first DTC’s aspire to last over a century like Filson has, they should use brick and mortar to help us get to know them and not just their products. Personality signals a company’s identity and purpose. It also helps foster customer relationships, which will be key in weathering this storm and others ahead.

To learn more about how personality grows brands, click here.

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