By Joe Zalta, Co-Founder of Riverbend Consulting
It may seem counterintuitive in today’s retail world where ecommerce is growing so rapidly, but shifting from online to in-store may be the right retail strategy for your brand. In fact, there is an increasing number of companies that have built big brands online that should now consider expanding into the brick-and-mortar realm to reach more buyers.
Studies show that despite the focus on online commerce right now, more than 90 percent of retail sales in the United States still occur in physical stores. That means there is ample opportunity for online brands with a loyal following to grow and gain market share through an omnichannel approach.
As a former apparel merchandiser for in-store brands and now a consultant to online sellers on Amazon and other marketplaces, I’ve helped many brands make this transition. I also believe a brick-and-mortar strategy could be a viable option for some brands looking to diversify their sales channels and expand their horizons.
Before your brand takes this plunge, though, you need to be sure you are prepared. Below are some top considerations to keep in mind before you get started.
1. Have packaging that pops. Packaging for in-store is different than for online. You will need to focus on packaging that pops off the shelf and attracts the shopper but is also comparable with competitive products. You must be willing and able to invest in research and testing to see what works with the end buyer.
2. Be prepared financially. Selling online has a lower barrier-to-entry in terms of product investment, as you are paid for each unit as it is sold.
Selling wholesale to stores is mostly done in bulk. This requires an investment up front to purchase or manufacture the products, and you may not see a return on it for 60-90 days, sometimes longer. You must be prepared to finance these bulk orders to meet demand from the retailer. This can be very costly in the beginning and may require initial bank financing or other sources of capital.
3. Understand the brick-and-mortar world. To make the in-store move, you need to have relationships with store buyers and understand the hierarchy of the brick-and-mortar realm and what it takes to get your products considered and accepted into a retailer’s product mix. Since many sellers don’t have those relationships early on, I recommend working with partners who understand the retail environment and have existing connections.
4. Have the infrastructure in place to deliver. Many brick-and-mortar retailers will first test a new brand through online sales on their website before they bring it in the store. This requires that you not only have inventory on hand to ship in bulk on demand, but also the ability to drop-ship as needed. You also need to understand the logistics required, including electronic data interface (EDI), delivery routing and returns.
5. Invest in branding. Bringing your brand into stores requires good, old-fashioned branding and advertising to tell your story and build awareness. This means an investment in everything from your brand look and feel and packaging design, to any ads you run and the website that supports your brand. You must also have a strong social media presence so consumers can easily learn about, interact with and share your brand.
6. Optimal pricing. There is more room for variation with pricing online than there is in a retail store. In the brick-and-mortar space, however, pricing is much more competitive, so you’ll need to carefully price your products comparably to your competition, or you will be overlooked on the shelf. Along those lines, expect to work with much smaller margins in the offline retail setting and find ways to keep your operations as efficient as possible.
While there is much to consider before making the strategic shift to brick-and-mortar for your brand, getting prepared at the foundational level requires more than most brands realize. Don’t forget there are existing experts, forums, seminars / podcasts and more that can help you navigate the retail world better than going it alone.
But if you can make the transition with some realistic expectations, and go in planning to do a lot of hard work, there are still many opportunities to be successful in retail.
