E-commerce retailers have several advantages over traditional brick-and-mortar retailers in building stores. Online retailers, especially Amazon, have benefited from having local retailers effectively be their showrooms, so there was little need for them to build stores. How often have you gone into a local store to check out the merchandise only to make the final purchase online in the convenience of your home? 

However, as more stores close their doors, fewer “showrooms” are available. With Borders closed and Barnes and Noble’s downsizing, Amazon built its first brick-and-mortar bookstore in 2015 in Seattle to meet shoppers’ need for a place to see, touch, and experience the merchandise in person and to sell Amazon’s growing product line.

Advantages for Online Retailers Opening Stores

Online retailers have several advantages in opening new stores. They are established brands with a national presence and effective advertising campaigns. They have a purchasing, warehousing, and delivery infrastructure in place, which can readily be expanded to support the growth of a brick-and-mortar retail expansion. 

Owning to their online success, online retailers also possess a tremendous amount of real-time data on their customers, which allows them to be far more targeted in selecting retail locations that best serve their existing customers. They know their shopping patterns, likes, and dislikes and can parley this information into well-considered merchandising decisions and store locations. Once opened, physical stores attract new customers who will then shop with them online. It is a win-win.

Niche Online Retailers Making the Leap

Interestingly, many online retailers opening stores are niche players with a strong online presence. Companies like Warby Parker, Bonobos, Birchbox, Athleta, Blue Nile, Rent the Runway, Trunk Club, and others have moved from pure online retail to building stores in multiple locations. 

These e-commerce retailers have capitalized on their strong online following by establishing successful stores close to their customer base that provide a more personalized service. Used as marketing vehicles, their new stores also create greater brand awareness and offer new opportunities to expand and grow their business.

Retail’s Multi-Channel Future

Retail has increasingly become a multi-channel experience. Existing brick-and-mortar retailers have sought to compete with online retailers by expanding their online presence. We see the opposite trend with online retailers expanding into brick-and-mortar locations. 

Given Warby Parker’s and others’ success, expect to see more online retailers looking for retail locations in a neighborhood near you. 

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