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This 1 Completely Counterintuitive Move Could Increase a Brand’s Digital Revenue by 37 Percent

When done right, this strategic move could be very, very good for the bottom line.

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BY Amanda Pressner Kreuser - 21 Feb 2019

how to increase digital revenue

PHOTO CREDIT: Getty Images

JCPenney and Gymboree are closing stores. Sears is going out of business. Toys "R" Us couldn't compete with Amazon and filed for bankruptcy. Considering the headlines, it may seem incredible that anyone would consider opening a physical store--or keep their physical store open--in today's almost-exclusively digital age.

Yet despite initial appearances, bricks and mortar store aren't going away anytime soon. New research indicates that having an IRL location could actually sway customers to buy your product over someone else's.

Researchers discovered that when a brand opens a new store, their web traffic increases by as much as 37 percent--and the effect is more pronounced for emerging retailers and digitally native brands. (The inverse was also true: As a brand's physical stores closed, its web traffic took a hit.)

With this in mind, it may seem like a more worthwhile test for digital-first and digital-only brands (and even a few traditional brands) to establish or grow their physical footprint. These five retailers are leading the charge--and we're all learning from their experience.

Amazon

Originally a video and music streaming service, and then a book retailer, Amazon has grown to become the most valuable company on the planet. Despite its incredible digital success, the behemoth chose to open its first physical bookstore in Seattle's University Village in 2015.

While a physical bookstore wasn't exactly a future-focused idea, their first Amazon Go store, which opened in 2016, definitely was. Once inside, customers could choose among hundreds of convenience store staples (meals, drinks, small groceries) and pay for everything through their app, rather than via a cashier (there actually aren't any inside Amaon Go stores).

Each of its 10 locations has hundreds of cameras and sensors to carefully track what people are buying--and Amazon is no doubt using that data to optimize the experience for future visitors.

ModCloth

Started in 2002 by a thrifty college student, Susan Gregg Koger, ModCloth is capitalizing on the digital/brick-and-mortar combination that every millennial loves.

Initially an online business, Modcloth opened up a few FitShops around the country where you can try on what you love, get help from a ModStylist or just browse. With a limited selection (and virtually no inventory for sale), customers pick out what they want and have the right size shipped straight to their door. This was a model similar to Bonobos' Guideshops (and now, both companies have been purchased by Walmart).

While the experience isn't typical for a clothing store, Matt Kaness, CEO of ModCloth, says. "Our intent has been to give an experience that complements our digital one."

ThredUp

ThredUp is the "world's largest online marketplace that buys and sells women's and kids' secondhand clothes" according to its site.

Founded in 2009 by James Reinhart as a way to share men's clothing online, this business is digital at heart. But, after $13 Billion worth of sales in its first eight years, the company decided to open up a physical store in 2017.

The company made the decision because, according to ThredUp's Head of Retail Experience Heather Craig, customers had been asking for storefronts for years. They used shopper data to determine where to open a store and which products to stock. With distribution centers across the country, stores will cycle in up to 1,000 new products a day, and will maintain a clean, sleek look, in comparison to many typical thrift shops.

The brand is continuing to test the waters and open new locations. Using data as their backbone, they plan to make the customer experience unique both online, and in stores. After all, Reinhart says, "the best businesses will be able to figure out how to do both."

David's Bridal

This one-stop bridal shop knows that its in-store conversion rate is 50 percent higher than online. While this might seem obvious (everyone woman wants to try on the dress, before she buys it, right?), that number was important to David's Bridal's strategy, as they looked to expand.

Rather than focus on opening more physical locations, the brand decided to build a marketing strategy aimed at getting online customers to come into the store.

"Digital is really crowded, so the question was: how do we drive results, especially when retail is so challenged offline?" says Diana Takach, David's Bridal's head of digital. While many brides may purchase their dress online, it's often done after trying it on in the store, making their strategy a worthwhile investment.

Warby Parker

Many of us know the struggle of trying to find the right pair of glasses. Whether it's sunglasses, reading glasses, glasses for everyday life, it often feels like we try on hundreds before we settle on a winner.

This often frustrating, and definitely time-consuming journey is one Warby Parker sought to simplify. Launched in 2010 by Neil Blumenthal, Andrew Hunt, David Gilboa and Jeffrey Raider, Warby Parker's founders believed that "buying glasses should be easy and fun." Originally an online-only company, Warby Parker aimed to appeal to the digital generation and the shopper who just didn't have time for a half day in an eye doctor's office.

In 2013, the brand took the plunge by opening a physical store in Manhattan, and now has more than 70 stores around the country. In July 2018, they opened up shop in Greenwich, Connecticut, after learning from their data that they're shipping a large number of glasses to the state.

Warby Parker is a strong example of a brand that values its diverse consumer base. Some customers like to look, click and buy glasses in a matter of minutes, others need some time to give them a test run. Blumenthal says, "We're going to make it as easy as possible for customers to buy glasses through whichever mediums they prefer, whether that's on mobile devices, on a laptop or in a store."

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