E-commerce driven, direct-to-consumer retail has boomed over the last decade. Companies like Warby Parker, Dollar Shave Club, and Glossier have disrupted their respective industries, offering design forward products, as well as clever and beautiful marketing, at a lower than expected price point.
In 2014, Casper set out to flip the mattress industry on its head. Long dominated by stuffy showrooms and extremely high mark-ups, the mattress industry was due for a change; and Casper was one of the first companies to offer premium mattresses sent directly to consumers at shockingly low prices. Over 170 “bed-in-a-box” style mattress companies now exist, with Casper still garnering a high rank among them.
And while traditional retailers have been told direct-to-consumer companies could lead to their demise, these partnerships show proof of a different narrative. Here are a few reasons direct-to-consumer brands could become your next great tenant.
More Than A Trend
Just as Casper spawned over a hundred copycat companies, it seems almost no industry is safe from direct-to-consumer interruption. Society at large is now online, and in the wake of COVID-19, these brands have a leg up as they may not rely on traditional, brick-and-mortar retail sales. But instead of stealing shoppers from real world companies, it seems that having an in-person showroom experience available for customers is still the aspiration of many of these brands.
For example, a few years after a successful online launch, Warby Parker began opening showrooms. In similar fashion, Casper began online and then partnered with Target, in addition to running 60 of their own showrooms.
While e-commerce isn’t going away, it has become the next frontier for finding brands who are ready to migrate offline and embrace brick and mortar. Landlords shouldn’t be afraid to approach one of these brands with a great tenant opportunity.
Pre-COVID, Casper had plans to open 200 more of their own stores. While those plans have had to be tweaked, their appetite for an in-person presence has not gone away. They’ve recently announced another new partnership with Sam’s Club to offer their products in traditional retail stores.
Big box brands like Target, Costco, and Sam’s Club all have a history of embracing these up-and-coming brands, and offering their store as a launchpad to further success—which is a strategy other spaces can borrow. In-store pop-up shops and boutiques could breathe new life into your existing tenants. Offering existing tenants the ability to sublease space to other brands could give them the boost they need, especially in the current economic climate.
Traditional retailers can rely on customers’ desire for tactile experience. E-commerce has not yet been able to replace feeling the fabric of a dress or savoring the scent of a candle. Humans are social, and trying new things is exciting. Direct-to-consumer companies can not only enhance their brand by offering customers a novel experience, but an in-person presence also gives a solid stamp of legitimacy. In fact, 49% of shoppers cite not being able to touch, feel, or try a product as one of their least favorite aspects of online shopping.
When trying to fill your current vacancies, think of how you can build a hybrid shopping/entertainment experience. Showroom style stores that allow customers to try or experience products, like the Apple Store, are popular for a reason. But unlike Apple, direct-to-consumer brands have proven they can show-off their goods without an in-store inventory to pull from. This means that even small retail spaces can be used, with all purchases then pushed online and shipped to the consumer’s home. Warby Parker uses this exact model for their eyeglass showrooms.
Even as direct-to-consumer brands continue to usurp long standing traditional brands, the marketing and experiential opportunities of traditional retail still play an important role in scaling a business. If you’d like to step out of the box and discover more about how you can fill vacancies with online brands, Retailsphere is here to help. Set up your no-obligation demo today to see how easy it can be to find retailers like Casper and bring them to your shopping center.