Posted on June 13 2014
Here’s your conundrum – youâve got an idea for a retail business and youâre about to go for funding but youâre not sure which route to take: Bricks or Online. Bricks and mortar is super risky and costly, while online is low risk but coupled with a long slow burn to get noticed. Is one better than the other? Both have their benefits and both have their downsides. Let’s talk bricks and mortar first.
From a Personal Perspective
As risky and as tumultuous as the journey has been for us at times, I would go no other way. With a sea of online retail stores launching almost daily and with very few of them differentiating from the others, it’s very hard for online stores to get noticed (more on that later). With a physical presence – like it or not – youâre suddenly putting yourself out there. Better make sure then that those products and that store design stand out!
Bricks & Mortar Advantages
A physical store allows customers to touch, feel, and engage, which is supremely important, especially if you have a luxury brand like ours. That ability cannot be matched and certainly not underestimated.
Get the design, aesthetic, and product selection right and youâre creating a showcase for customers to absorb your culture, hang out, get advice, and yabber. It immediately connects customers with the brand. Youâll need to add a big dose of theatre, discovery, and intrigue and if you get that right, youâre well on the way! As a retailer youâll be going to trade shows a lot. Someone new to retail recently told me how flabbergasted they were that suppliers spent so much money creating show-stopping mini-emporiums to showcase their latest products (for us retailers) when they’re all taken down after 5 days. The cost of the installation alone (trust me) is in the thousands. Why do it? Simple: they are creating a narrative for their brand, a story. You canât just open up a shop or a stand and put tons of disconnected stuff on the shelves and then think âhmm, why isnât this stuff selling?â You have to spend money on creating an experience, you have to create a sense of wonder and excitement, and you have to invest money in that.
Creating a Buzz
A bricks and mortar store instantly – almost overnight – gets you noticed. Noticed by the local community, by the press, and not long after that the international community and the celebs. You establish your presence far quicker going down the bricks and mortar route and you can leverage on that across all your social media channels and marketing campaigns!
Itâs far easier to build a community when you have an actual presence immediately conveying your aesthetic. Weâre all pretty passionate about interiors at Team AA and getting to speak to our customers, share our knowledge, and participate in their lives is what makes having a bricks and mortar store so much fun. Not just that, but with a supersonic team you get to deliver an additional value-add experience for your customers.
Fundamental operating costs are much lower which is a major advantage. However, I would say this – where most people go wrong in having an online store is that they never factor in enough money. Invest in creating the best website you possibly can, the best operating system, hire staff to run it, etc. You wonât need as much money but you are on a losing wicket if you think you can handle, design, run, and PR everything yourself. It will look and feel too homemade you can spot it a mile off! Invest I say!
Since operating costs are less, you can reduce margins on products and still make a profit. Having said that, offering the cheapest products doesnât secure brand loyalty. You wonât get customers coming back. Customers who find your site looking for a deal arenât loyal because they are always seeking the cheapest price and they won’t think twice about going somewhere else to get it. It’s a vicious circle, the price-cutting route! Just look at the trouble Tesco are in right now, speaks volumes!
Geographic boundaries have no meaning â the world is your oyster, so to speak.
You donât have weather-worries, tube strikes to deal with, or trouble from Arsenal playing at home (again!). Youâre trading 24/7 â yay hay to that! Leverage that advantage.
So Which Way to Go?
So here are my thoughts – and obviously these are totally personal. If you can do both (online and B&M), do it. Itâs so much harder for brands to engage with their customers in a purely digital way and it takes such a long time to build a presence if you are purely online. I read in a recent survey two very interesting facts: first, 68% of us prefer to shop in stores for clothing, interiors and shoes. Second, there is a movement called ‘clicks to bricks’ or ‘e-tail to retail.’
Online stores are moving big time into having a bricks and mortar presence. With more spaces then ever available and landlords more willing to rent out property for short periods (like for pop-ups), there is now an opportunity to launch, create a storm, and obtain a customer base in a short space of time. Think outside the box! Broadway Market, the little market at the end of our road, attracts 20,000 people on a Saturday from all over the globe. Apply for a stall in a market and you can take in some seriously big bucks as well as create a following!
Whatever route you go down, your business will only take off if you deliver a strong brand experience. If your brand has no voice or personality, if youâre not obsessed with what youâre creating or buying, then donât get into it. It’s so much harder than it looks and if it were easy, everyone would be doing it! Before launching, think, ‘Is my idea a solid one, will it grab some market share, is it different enough to succeed?’ If youâve ticked all those boxes, you are on your way. Yes your path will go across some very tough terrain but Â donât give up. Donât give up I tell you because on the other side shines a very bright light!
If you want to learn more we run Retail Classes (only 4 a year regrettably due to my bonkers schedule) where I’ll be yabbering for hours onÂ all things business related with a particular emphasis on how to increase sales, as in right now!