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From Online to In-Store: Piperlime and the E-Commerce Expansion Into Brick-and-Mortar

BY CSA STAFF

By Dr. Gary Edwards, Empathica

Recently, online fashion retailer Piperlime announced plans to open its first brick-and-mortar location in New York City. For many, the announcement seemed to fly in the face of conventional wisdom given the competitive pricing and other advantages e-commerce providers have over traditional retailers.

Why would a successful e-tailer like Piperlime want to take on the additional cost and headaches associated with a physical store?

Not surprisingly, the answer has absolutely nothing to do with price – but with a growing realization that for certain products and types of buying experiences, consumers still prefer in-store customer experiences.

In-store customer experiences still count: Piperlime’s planned foray into the brick-and-mortar space isn’t an anomaly. Several other major online brands have either opened physical stores or plan to do so in the near future. In fact, with Amazon, eBay, and Google entering the fray, the list of e-tailers and e-commerce heavyweights that may be setting up shop at a location near you is a hit parade of the world’s leading online brands.

The addition of physical stores is being driven by an awareness of the inherent limitations of the online customer experience and an appreciation for the fact that consumers simply demand in-store opportunities for certain types of products. Online providers are also demonstrating a newfound appreciation for the value propositions at the heart of the in-store shopping experience:

Human contact. It’s been said before, but consumers enjoy the human connection they get when they visit a brand’s brick-and-mortar location. In-store sales associates can really make a difference with customers when it comes to driving brand loyalty and other key metrics. By some estimates, sales associates can increase basket size by 35% or more through personal recommendations and other tactics that e-tailers now need to master to connect with consumers in the brand’s physical store setting.

Hands-on demos. Some kinds of products need to be physically demonstrated to consumers. This is especially true for products that are new or unfamiliar. For example, Google has created brick-and-mortar opportunities to showcase its Chrome product, using standalone departments within other brands’ physical store space. This allows consumers to test drive their product in a supported environment, which significantly increases the product’s appeal to potential users. Although in-store demos may be limited to a small percentage of the brand’s overall target market, the hope is that customers who have hands-on product interactions will share their experience via social media and other channels.

Product interactions.
Certain types of products lend themselves to in-store experiences. For example, consumers of high touch products like clothing or even furniture prefer the option of tangible product interactions – they want to be able to touch or try on products before they commit to a purchase. In many instances, these consumers also want to receive feedback from sales associates, creating opportunities for in-store salespeople to validate their buying decisions and increase basket size.

“Click-and-brick” opportunities.
The use of smartphones to enhance brick-and-mortar experiences is skyrocketing. In growing numbers, consumers are leveraging mobile technology to perform on-the-spot product reviews, price comparisons and more. Digital brands that venture into the physical store space already have a strong online presence. By combining that presence with other technologies (e.g. Google Glasses, QR codes, etc.), retailers can create unique in-store experiences that are exclusive to “click-and-brick” retailers, surpassing the experiences that are offered by brands located solely in the digital or brick-and-mortar space.

In many ways, the expansion from the cybersphere to the storefront boils down to the need for more intimate shopping experiences in certain product categories. Repeat purchases, familiar products and items that don’t require customer intimacy (for example, books) will continue to dominate the online-only space. But for new fashions, new technologies and new products, customers will increasingly require more “hands on” product interaction – and in-store experiences that have been strategically crafted by their favorite online brands.

Dr. Gary Edwards, chief customer officer at Empathica, is responsible for oversight of sales, marketing, client strategy, marketing science and retail insights. For over 15 years prior, Edwards led worldwide and domestic research projects in customer and employee research.


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L.Wright says:
May-13-2013 08:41 am

like when people are trying to challenge me, and I appreciate that you maintain a fairly active dialogue with your readers. Couldn't agree any more. Your advice is great. Lipozene Reviews

L.Wright says:
May-13-2013 08:41 am

like when people are trying to challenge me, and I appreciate that you maintain a fairly active dialogue with your readers. Couldn't agree any more. Your advice is great. Lipozene Reviews

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May-08-2013 02:41 pm

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May-08-2013 02:41 pm

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J.Walker says:
Apr-14-2013 12:05 pm

By combining that presence with other technologies (e.g. Google Glasses, QR codes, etc.), retailers can create unique in-store experiences that are exclusive to “click-and-brick” retailers, surpassing the experiences that are offered by brands located solely in the digital or brick-and-mortar space.superiorpapers reviews

J.Walker says:
Apr-14-2013 12:05 pm

By combining that presence with other technologies (e.g. Google Glasses, QR codes, etc.), retailers can create unique in-store experiences that are exclusive to “click-and-brick” retailers, surpassing the experiences that are offered by brands located solely in the digital or brick-and-mortar space.superiorpapers reviews

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CBRE: Hong Kong and New York are world’s most expensive retail destinations

BY Marianne Wilson

London — Hong Kong is the world’s most expensive retail destination, with retail rents at $3,864 per square foot, according to the quarterly rankings of global retail rents from global property advisor CBRE Group. CBRE cited the city’s significant inbound tourist traffic and continued increases in domestic wealth as fueling demand from international fashion and luxury retailers.

The CBRE rankings saw little change in the first quarter of 2012 compared with the previous quarter. New York retained the number two position, at $2,475 per square foot. Both New York and Hong Kong experienced significant increases in retail rents quarter-over-quarter.

The remaining top five rankings were also unchanged from the prior quarter: Sydney was third, at $1,112 per square foot, followed by Tokyo, at $1025 per square foot. London, at $956 per square foot, completed the top five as competition for prime locations in the city’s West End contributed to an annual rental increase of 5.6%.

Globally, total retail rents increased by a modest 0.8% quarter-over-quarter in the first quarter of 2012 as concerns over the eurozone debt crisis and weak global economic growth continued to affect consumer and retailer confidence. Despite these fears, occupier demand for prime space in many major cities remained strong, and prime space was in short supply in many markets.

“Despite concerns over the eurozone and a slowing world economy, retailer demand for prime space in major cities remains strong; however, prime space is in short supply in many markets,” said Ray Torto, global chief economist, CBRE, in a statement.

This mismatch between demand and supply means that activity levels are not as high as they could be. Equally, retailers continue to target the best locations in the more mature markets of Western Europe and the wealthier markets in the Asia Pacific region.

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Three Big New Retail Partnerships

BY Marianne Wilson

Retailers can’t seem to get enough of partnerships these days…be it with hot designers, each other or television shows. Below is a quick recap of three new couplings that have the industry buzzing.

1. Nordstrom and Topshop: Looking to add more fashion sizzle to its offerings, Nordstrom has entered into a joint venture with Topshop, the British fast-fashion giant known for its runway-inspired threads and rock ‘n’ roll attitude.

Under the arrangement, Nordstrom will open Topshop and Topman (the men’s unit) departments in 14 locations across the country in early September. The departments (the women’s will run about 2,500 sq. ft., and the men’s about 1,500 sq. ft.) will be outfitted with mannequins, visual merchandising and store fixtures supplied from the United Kingdom. The merchandise mix will include limited-edition pieces created especially for Nordstrom. An expanded selection will be available on Nordstrom.com.

The alliance is a win-win for both retailers. It gives Topshop, which to date has opened three stores in the United States, a low-risk, inexpensive way to introduce its brand across the country. And it gives Nordstrom something just as critical in today’s supercharged competitive landscape: a lock on exclusive merchandise.

The deal also raises the Seattle-based retailer’s cool quotient and style profile significantly, which, combined with Topshop’s affordable prices, could help attract the type of younger, less affluent style-conscious shoppers that tend to stay away from department stores.

2. Target and Neiman Marcus: In a deal that already has style mavens swooning, the discount chain and luxury department store company will sell a limited-edition, holiday gift collection with items created by 24 top designers selected from the roster of the Council of American Fashion Designers. To say the line-up is impressive is an understatement: It includes Marc Jacobs, Tory Burch, Rag & Bone, Diane von Furstenberg and Caroline Herrera to name a few.

The collection will include more than 50 items and run the full gamut, from home to men’s, women’s and children. Prices will range from $7.99 to $499.99, with most items under $60. (Both retailers will offer the same merchandise at the same prices.)

The collection will be available in dedicated spaces in Target and Neiman stores nationwide on December 1, as well as online on their respective websites. Let’s just hope that the merchants have the capabilities and the goods to support the frenzy that is likely to ensue when the collection goes live. A replay of the Target-Missoni madness would not be in keeping with the spirit of the holiday!

3. Lord & Taylor and Project Runway: Department store retailer Lord & Taylor is headed to the runway—that is, the one hosted by celebrity/model Heidi Klum. The chain has signed on as the exclusive retail sponsor for the 10th season of Lifetime’s hit show, Project Runway, which kicks off on July 19.

As part of the retailer’s sponsorship, the show will feature a custom-built “accessory wall” with an edited assortment of Lord & Taylor’s shoes, handbags and accessories, which contestants will use to complete their looks during each challenge. In addition, the retailer will host a challenge at its Fifth Avenue flagship, with the show airing on Aug. 30. As part of the grand prize, the retailer will offer the winner of "Project Runway" the opportunity to sell their collection at the store.

The partnership will also be promoted through store windows and social media platforms. It should give Lord & Taylor the opportunity to create some nice buzz for itself. And what retailer couldn’t use that?


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