Clicks to Bricks: Reasons to Embrace the Shop-in-Shop Model
As direct-to-consumer brands move from digital to physical, they’re once again changing the way shoppers think. Once considered a harbinger of doom for physical retail, these very companies are spurring a renaissance by bringing a tech-savvy mentality to an old industry.
But the path to physical retail isn’t without its challenges. No matter how disruptive a company can be, the journey can bring headaches as companies move from optimizing websites to site selection, merchandising, and more.
It’s understandable. But even if you’re not among the early DTC adopters of the storefront, there’s still a way forward. Vacancies are still common in malls and shopping centers, pop-ups continue to become popular, and as you’ll see today, many retailers are willing to offer you space to sell.
Following last week’s blog on the rise of the shop-in shop, we’re today going to look at some of the reasons a partnership like this can be beneficial to a DTC brand looking to establish a physical foothold.
Note: This is part of our much larger clicks-to-bricks series. Be sure to check out the rest of our posts on moving a DTC brand from digital to physical:
- The Rise of DTC and the Path to the Storefront
- Top Reasons DTC Brands are Opening Retail Spaces
- What Makes for a Successful DTC Retail Space?
- Clicks to Bricks: An Introduction to Flagships
- Pop-Up Shops and Why They Matter
And stay tuned for the rest of our series by signing up for our email list!
The Path to Partnership: Why a Shop-in-Shop May Be Ideal for DTC Brands
Today, more and more manufacturers (and even retailers) are partnering with retailers. Target is slowly turning into a mini-mall, partnering with CVS Health, Casper, Disney, and more. Same goes for Nordstrom, who has worked with DTC players like Glossier, Away, Bonobos, and more.
But is it all worth it? Probably. Though the path to securing this kind of partnership with a retailer is probably much harder than many of the other options, the benefits are tangible.
The shop-in-shop provides dedicated space without requiring the commitments of a flagship or the ramped-up capacity requirements of a traditional distribution model. Instead of figuring out how to furnish 10,000 square feet of retail space or ramping up production to supply 3,000 stores, you get to showcase your wares in a limited, high-traffic space.
Co-Branding and Shared Marketing
A shop-in-shop isn’t just a transaction, it’s a relationship. People who love your brand will visit the store you set up shop in. People who want to try your products but haven’t converted might be convinced to come test out your products. For instance, when Fi Collars partnered with PetSmart, both sides of the partnership shared the news and used the opportunity to help each other.
“[…] trainers and groomers at PetSmart locations have also been given coupons featuring a $10-off offer, along with one-sheeters that educate their clients on these features. The fact sheet leads with a statistic noting that 10 million pets get lost every year in the U.S. and that Fi helps with this issue by functioning like a cellphone for your dog[…]”
Added to this, Fi and PetSmart sent an email to their lists, held giveaways, and made additional announcements, reaching a combined audience of nearly 1 million followers.
One of the best and the worst parts about being a DTC brand? Your audience is reasonably tech savvy. Though it’s a large audience, there are many potential customers who might not care about influencers, fit into your demographic targeting, or buy items they can’t feel. However, when you set up shop in a retailer, you’re providing customers with tangible goods and additional trust.
As discussed in the Path to Purchase article on Fi’s partnership with PetSmart, the brick-and-mortar presence gives the collar a space to shine.
“While Fi’s magic takes place largely in our software, the collar’s sleek design gets a unique chance to shine in the brick-and-mortar retail experience,” says Jonathan Bensamoun, founder and CEO of Fi.
Control over Brand and Experience
Like flagships and pop-ups, shop-in-shops can help you better align with your customers. As the shop-in-shop is little more than a sublease, you get to control the space. As noted in a recent Ad Age article,
“At a time when all marketers are looking to strengthen consumer connections, the shop-in-shop concept gives brands more control over the customer experience than they would have if they just stocked products on shelves. The brand within the larger brand has the advantage of controlling its own logistics and branding.”
Data, Data, Data
No matter how well-versed you are in analyzing ecommerce activity, in-store analytics are a special beast. A shop-in-shop will give you an introduction to these data.
Maybe it helps you find out the best location for a flagship, maybe it helps you develop a better product bundle. There are a lot of qualitative and quantitative metrics to look at to help you better connect with and satisfy your customer base.