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Top 10 Tips for Online Retailers Opening Physical Stores

Bridget Johns
Bridget Johns
Head of Marketing and Customer Experience

Online retail titans like Warby Parker, Bonobos, Rent the Runway and even Amazon – gasp! – are opening brick-and-mortar stores. But before online jumps to offline, here are 10 tips to follow in opening stores.

As a lifelong retailer, I have always loved physical stores. Like most Americans, I do a fair amount
of online shopping and while online fulfills basic utilitarian needs, nothing replaces the joy of discovering a new product that speaks to me or a new retail store that feels like a curated version of my life.

Shoes and Purses

It’s been well documented that online retailers are opening physical stores in increasing numbers. Pure play retail has been classified as “dead,” and multi-channel is all the rage. This presents opportunity and challenge for online retailers looking to make the plunge to physical stores. The costs and the complexity of opening physical stores can feel daunting for retailers who have made their fortunes connecting with customers through a computer, but the rewards can be considerable… faster growth, ability to reach new customers, and customer loyalty are all real benefits of physical locations.

Below are 10 top tips that can help focus the energies of online retailers and hopefully lead to faster success with the physical world:

  1. Invest in the team. Pay for the best store manager you can find, and don’t settle. Make sure he/she is an excellent brand ambassador, knows the community and loves retail. Build the rest of the team with a balance of people from retailers you admire and brand experts from your corporate/ecommerce operation. And, don’t underestimate the “nice factor” – people like to buy from nice people.
  2. Location. Location. Location. But be clever. The best location for your first store is probably one that is close to your headquarters. Key factors to consider include 1) an ability to support the store locally, 2) the cost of the location, and 3), the ability to “cluster” (see #3, below). Don’t lock yourself into an expensive prime location until you have tuned your physical store operations and experience.
  3. Consider opening with several stores in a cluster. If you can afford the investment and risk, think about attacking a market with multiple locations. It’s not the right strategy for everyone, but many retailers find that it can drive brand awareness and customer loyalty, and it also allows you to do A/B testing and other initiatives. But, be careful to not treat all of these stores exactly the same. Two stores 10 miles or even one mile apart from each other can behave very differently.
  4. Be scrappy on the store build-out. You don’t need to spend a fortune on your first store build-out. Your store should feel real and have a strong sense of your brand, but probably doesn’t require expensive design agencies and shop-fitters. Save that investment for a larger rollout, after you’ve learned what works.
  5. Test and Trash. Test fast, fail fast. Test, trash, learn. Change is good. However you slice it, don’t be afraid to change everything (often) until you find what works.
  6. Develop a community strategy. In addition to a strong PR strategy, a community strategy can help drive local loyalty. Know your community – sponsor local events and make sure you are courting the local tastemakers.
  7. Invest in analytics and customer loyalty from the beginning. You didn’t build your online business without these analytics, so be certain to make this a key part of your physical store strategy.
  8. Consider pop-up locations, but don’t expect pop-up and permanent to behave the same. Pop-up locations can be an awesome introduction to physical retail, but the operating and marketing realities are very different. A good strategy for pop-ups is to use them for brand exposure or peak-selling, like Holiday, dad and grads, etc.
  9. Invest in operations and logistics for your store rollout. With more stores, more teams, more inventory, etc., running stores becomes more complex. For a few stores, being scrappy and fast is more important than having perfect operational processes. However, when you’ve fine-tuned your strategy and start to open more stores (5 is a good rule of thumb), investing in operational process is critical.
  10. Don’t forget the basics – customer service, inventory management, customer-friendly service policies (returns, exchanges, fitting rooms, etc.), and a sense of humor. Without all of these your road to success will be longer and windier.

What tips would you add to/subtract from the list? Join the #retail conversation on Twitter @BridgetJohns and @RetailNext, as well as at