What Makes for a Successful DTC Retail Space?

Insights

Direct to Consumer Brands have transformed the way we shop online. But what happens when they go “offline”? Whether it’s a move to become a pickup hub, pop-up, or flagship, digitally native players are finding success with storefronts. But now it’s time to ask how to get it right.

Over the past month, we’ve explored the rise of direct-to-consumer sellers, their push to enter the retail space, and the reasons this move is a good idea. But good ideas in theory don’t always turn out to be good ideas in practice. Yes, a DTC storefront can connect with customers, create community, and drive unplanned traffic while reducing acquisition cost. However, it pays to know how to make the decision work for your brand.


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:

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5 Ways to Create an Unforgettable In-Store Experience for a DTC Brand

As a company who has worked with DTC brands including The Sill, Brooklinen, Citizenry, and more to create unforgettable experiences, we know a thing or two about the things that go into a successful retail operation. Pair this with advice from retail experts across the web, and we’re excited to share some advice on how to take your DTC brand “offline.”

It All Starts with Location

Though it may seem obvious that location is everything, it’s not simply a good demographic analysis needed to make for a good DTC retail space. Anyone can open a space in Times Square, the Mag Mile, or Miami. But is the juice worth the squeeze?

Maybe. But probably not. Many DTC brands are choosing to enter the in-store landscape to get away from unbearable customer acquisition costs. A move to build in one of these spaces will likely be profitable, but often, you have better options.

Luckily, you have something that every retail expert doesn’t have—years of data. One of the biggest reasons DTC brands succeeded in the first place was their ability to target users, understand lookalike audiences, and grow their base. Now, after years selling online, you can use all this data to create hotspots—and choose smart locations.

Build around Likeminded People

Something that we’ve learned from our work in the space is that it’s better to connect to the people who already shop with you online. This might put you into somewhere a retail expert may balk at. But in many occasions, this makes the most sense.

Brooklinen started its expansion with its store in West Village. The Sill opened its most recent space in the residential Lakeview neighborhood. For someone like a home goods retailer or plant purveyor, this can make sense—as success with a few people in the neighborhood can mean success with others.

Know Your Competition

As a DTC brand, you already know that you’re not the only one in your niche. Every success story spawned similar players. The question you need to ask is whether you’re going to take your competition on directly, or if you’re going to take your time. This is a dilemma you need to approach carefully. Is it worth opening your retail space in the home turf of another?

The most likely answer is based on whether the town is big enough for the both of you—and whether you have a foothold with current customer base. Opening in a well-established territory could introduce you to challenges if you haven’t already developed an audience, as you can expect similar quality, price point, and target niche. But you can also use this as an opportunity to compete.

You Don’t Have to Start with a Permanent Space

It’s likely that you can analyze your shipping data to find 10 seemingly perfect spots to open a spot. But how can you tell which one is right? The answer can lie in the success of a pop-up. Pop-up shops often can give you a taste of your local market while providing you with an understanding to the future whenever the luster wears off.

Put into context, a six-month lease will introduce you to the buyers and location, give you a bump in sales, and help you understand the costs/benefits. But it will also let you see what happens a month or two into your entrance—after the initial hubbub dies down. Maybe this means opening a swimwear brand from April through September in a beachfront location or opening for the holidays. Either way, you’ll get a taste of the best and worst.

It Doesn’t Even Have to Be a Complete Location

Success doesn’t even require you to open a full space. The idea of shop-in-shops has become more palatable in recent years—not only for established retail brands (Kohl’s + Sephora, Adidas x Macy’s, and more), but for DTC players as well. Casper has opened such locations in Bed Bath & Beyond. Target is looking to become a brand mall. All this combines to provide DTC brands with opportunities to grow.

So long as your space is consistent, connected, and attractive to unknowing shoppers, you have an opportunity to capture an audience.

Taking Your DTC Brand In-Store: What’s Next?

At Morgan Li, we transform spaces. Whether that’s a traditional big box or a rapidly growing direct-to-consumer brand, you need a partner who knows the bricks-and-mortar space. That’s where we come in. With eight decades of experiences in retail, and some of the biggest names in DTC on our list of partners, we deliver your vision on time and on budget.

Over the past few years, Morgan Li has worked with DTC players across the nation to provide fixturesfurniture, and graphics built to provide guests with an unforgettable place to shop.

Startups and expanding brands like Brooklinen, Away, The Sill, and more have all trusted us to build unforgettable shopping experiences during their push to open physical retail spaces. Here are just some of the projects we’ve completed:

Get to know more about who we are and reach out for a consultation today!

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Cash wrap and perimeter displays at Brooklinen flagship in New York City. Custom retail fixtures by Morgan Li