Should digital-first brands go omnichannel?

Should digital-first brands go omnichannel? 800 619 Scriberbase

Consider the back story of Warby Parker.

A category disruptor in eyewear, WP was all about avoiding high-priced glasses by eliminating overhead incurred by physical stores. The lean start-up model made perfect sense.

Then, in 2013, the company switched gears, announcing its first store location, in NYC.

Their store count has since grown to roughly 180 locations.

Warby’s move from online to omnichannel has prompted others to mimic the strategy because most “on-to-offline” copycats typically believe that selling online has a proverbial revenue ceiling, and, brick-and-mortar expansion offers a way to breakthrough.

Some are using physical stores as inventory-free showrooms. Warby Parker shoppers, for example, try on products in-store before ordering their final selection, which is later shipped direct.

Opinion is divided on whether brands with an online-first growth story should be taking their businesses to storefronts.

The bulls argue that, notwithstanding retail brick-and-mortar’s decline and the high cost of things like build-out and rent, companies like Warby Parker do have a business case—namely, that ~$3 trillion out of ~$3.4 trillion (~90%) of retail sales in the U.S. are still courtesy of physical stores.

Yet, the bulls miss a key point: stores suck a ton of cash, and unless you’ve got a big war chest to risk, the move is dangerous.

Consider Bonobos, who was saddled with financial challenges once it launched its shops. The company sold to Walmart in 2017, in a move to cover losses from its physical expansion.

Birchbox, too, had to scale back store plans.

This isn’t to say all digital-native brands should steer clear of physical stores. The strategy can work well for specific categories, like eyeglasses where it’s hard to determine fit online.

But, a strategic “hedge” is critical.

Warby didn’t just sign a lease when it first started thinking “stores”.

In fact, the company used a yellow school bus as a mobile storefront, for a cross-country retail tour it called the Warby Parker Class Trip—kind of like the Peterman Reality Tour (Seinfeld reference). With a successful bus pilot, the first NY store was up next. Smart.