After establishing their brand and customer base online, digitally native vertical brands (DNVBs) often grow by expanding into physical retail. Fast-growing companies like Warby Parker and Bonobos have continued to buck conventional retail paradigms as they have moved into brick-and-mortar, blending digital and physical worlds to create seamless shopping experiences that are consistent across web, apps, and the physical store.
Brick-and-mortar adds key components to the shopping experience for digitally native brands, giving customers the chance to physically see and touch products, and to engage face-to-face with brand representatives and sales associates. On the cutting edge of both in-store technology and experiential retail, DNVBs generally use these locations to solidify their brand promise—and their stature as innovators. From creative applications of in-store digital touchpoints to device-empowered retail associates to new workflows and processes that defy the norms of traditional shopping, these brands offer a glimpse into what might be the future of brick-and-mortar shopping,
Here’s a quick look at how some leading DNVBs are reimagining physical retail.
One of the poster-child DNVB-turned-physical retailers, this hip eyeglasses company seamlessly ties its online platform into its brick-and-mortar store.
A mobile app lets customers virtually “meet” with ophthalmologists to get prescriptions via smartphone and “try” glasses on virtually. Customers can also visit one of the brand’s 65 brick-and-mortar locations to try on glasses and take them home. Communication with customers is key: Warby Parker uses SMS, live chat, email and phone to connect with shoppers before and after purchases.
This model seems to be working. Warby Parker is profitable, just raised $75 million and is on its way to going public. In essence, its success is based on both exceptional product and customer service, according to Warby Parker co-chief exec Neil Blumenthal.
This includes a focus on technology. In addition to innovations around augmented reality, Warby Parker also equips each sales associate with a tablet that can handle point-of-sale transactions, eliminating the need for a centralized checkout counter and the queues that are often associated with that. Going forward, indications suggest further expansion nationally, as well as an IPO to raise capital in the next couple years.
Bonobos morphed from an e-commerce start-up selling chino pants to an in-demand men’s clothing retailer, and is now a subsidiary of Walmart. Bonobos physical retail “Guideshops” are showrooms where customers are assigned a personal shopper—called an “in-store ninja”—and can browse and try on clothes. While customers buy clothing at showrooms, they walk out “hands-free”: rather than leaving with their purchase, orders are shipped to customers’ homes or offices for no additional cost. Associates are equipped with iOS devices that they use for everything from browsing styles to locating products in-store to completing purchases.
Ten years after Bonobos’ 2007 launch, Walmart bought the popular clothing upstart for $310 million. However, the brand maintains its 48 brick-and-mortar locations, its brand independence and its vision. And Bonobos apparel isn’t sold at Walmart—in-store or online. Instead, it is available on Walmart’s millennial-focused subsidiary Jet.com, as well as through the Bonobos site. Bonobos apparel has also been available at Nordstrom since 2012.
Rent the Runway
The designer dress subscription rental firm started out online in 2009, and in 2016 opened its first retail locations. Subscribers to Rent the Runway’s “closet in the cloud” pay a monthly fee (a la Spotify or Netflix) and can go to the brick-and-mortar stores to try on and rent outfits, or drop off previously rented items. Apparel drop-offs and pick-ups are handled by customers directly using self-service scanning kiosks. Top designers like Diane von Furstenberg, Tory Burch, RED Valentino and Marni are available to rent at a fraction of the cost it would take to buy.
Originally an online fashion service, Rent the Runway opened physical retail locations to show its inventory in person. In particular, the company notes that the stores let customers learn more about clothing brands—often high-end luxury—that they’re not already familiar with. Now valued at just under $800 million, Rent the Runway recently received a $20 million investment from the founders of Alibaba.
Ministry of Supply
This Boston-based smart apparel company wants customers to work, learn and hang out in its community-oriented stores. Ministry of Supply raised over $400,000 on Kickstarter in the spring of 2012 to develop a sweat-resistant synthetic knit-blend dress shirt. A year later, it opened its first brick-and-mortar location, in New York City, to sell “performance professional” dress clothes. The Mercury Intelligent Heated Jacket, the company’s latest product, is a heated coat that is voice-controlled using Amazon Alexa or an app.
Ministry of Supply now boasts eight brick-and-mortar locations across the US, which it uses to provide an “educational” experience about its unique clothing line. The flagship Boston store features a “3D-knitted” clothing experience in which customer can select colors, cuffs, and buttons for a blazer that will be ready to wear in 90 minutes. In addition to in-person shopping for its signature next-gen clothing, its stores offer free co-working spaces and host panels on technology events.
For luxury Italian shoe company M.Gemi, brand awareness is as important as selling shoes at its brick-and-mortar stores. Called “fit shops,” the company chose to open retail locations in New York and Boston based on data about customer demand that was gleaned from its e-commerce platform. In stores, customers meet with stylists to try on shoes. Stylists will then put these shoes into the shoppers’ online account so that they can find them when they go to the M.Gemi site. Once purchased, shoes are shipped directly to the customer’s home.
M.Gemi equips its associates with an iPad & app that allows associates to assist customers in-aisle with inventory information, barcode scanning, and other digital solutions.
M.Gemi has raised over $47 million, which will largely be used for online expansion. The brand also stands apart by touring the country in a gelato truck, showcasing its wares in a variety of cities, and relies heavily on marketing via Instagram and through social media influencers.
A popular online mattress retailer, Casper now boasts “nearly one million happy sleepers and counting.” But Casper isn’t limiting its scope to mattresses—or to ecommerce, for that matter. Casper recently launched a line of other sleep-related products including pillows, sheets, and bed frames, as it continues jockeying for position as the expert in all things sleep.
Casper is also breaking into brick-and-mortar, with a SoHo location that houses a new repertoire of bedroom products, as well as 18 other locations across the country.
The in-store experience utilizes educational touchpoints where customers can learn about different mattresses. In addition, customers serious about getting a good night’s sleep can even “book a nap-time” and try out a mattress in-store.
In addition to its own brick-and-mortar locations, Casper has struck a $75 million deal with Target to offer products in more than a thousand Target stores across America, drastically widening the brand’s retail footprint.
Six Hundred Four
When people think of innovative new business ideas, a shoe store probably isn’t the first thing that comes to mind. But Vancouver’s Six Hundred Four is finding interesting ways to bring new flair to the custom sneaker industry.
The brand starts by commissioning a piece of artwork from talented artists. It then prints a limited run (604 pairs to be exact) of sneakers based on the art. The limited nature and unique styles are housed in a gallery/shoe store in Vancouver’s trendy, gallery-filled Gastown neighborhood.
In contrast to the other innovative brands on our list, Six Hundred Four is using technology to bring its retail experience online (not the other way around).
It teamed up with Method Visual, a 360° photography company, to create a virtual reality website that visitors can use to explore and shop from their phone or computer. In an experience similar to Google’s “Street View,” site visitors are able to navigate through the store, check out the sneakers and the artwork that inspired them, and even hunt for Easter eggs offering discounts. The result is an online shopping experience that mirrors Six Hundred Four’s brick-and-mortar store.
DNVBs re-invent brick-and-mortar stores
As physical retail continues to evolve, these digitally native vertical brands may transform the idea of a store. Imagine a store that’s less about moving product and more about providing an immersive experience for customers to learn about the brand and product offerings. Above all, the common thread that these DNVBs are proving is that an exceptional customer experience is paramount to success in physical retail.
In-store tech isn’t just about customer experience—it’s about survival. There’s a strong correlation between investments in in-store technology and increased earnings. Read more.
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