Brands in the digital age are still opening physical stores to build deeper customer relationships in key markets. According to Forrester’s research, 72% of total US retail sales will occur in brick-and-mortar stores by 2028. This is supported by data showing that 64% of tech-savvy Gen Z consumers prefer to shop offline. Fashion brands like Dolce Vita, Skims, and Revolve have recognized the ongoing relevance and profitability of brick-and-mortar retail and have started opening retail locations.
Dolce Vita made the decision to open retail stores based on the belief in the power of the in-store shopping experience. They have since opened several locations, including the latest in Austin, Texas. Other brands like Skims and the Revolve Group have followed suit, opening stores in Washington, DC, and Aspen, Colorado, respectively. Outdoor retailer L.L. Bean is also expanding its retail presence with new locations in several key markets.
Investing in retail locations allows brands to offer omnichannel experiences and capitalize on trends like click-and-collect sales. Additionally, retail stores serve as permanent marketing tools, increasing visibility and customer engagement. They also help reduce returns by allowing customers to try products in person, addressing issues related to sizing, quality perception, and immediate gratification.
While opening a brick-and-mortar store comes with costs like rent, operation expenses, technology investments, and utilities, many brands mitigate these risks by starting with pop-up stores before committing to a permanent location. Brands can also reduce costs by taking a zero-inventory approach or utilizing in-store events and partnerships to engage with customers and create community hubs.
Ultimately, brick-and-mortar stores continue to be attractive to brands for their enduring appeal, credibility, and brand experience opportunities. Despite the initial investment required, more brands are exploring the potential returns associated with physical retail, including increased customer engagement, reduced returns, and enhanced brand awareness. Opening retail locations can offer a competitive edge in the digital age by providing unique customer experiences and creating lasting connections with consumers.
