How DTC Brands Can Open Brick-and-Mortar Stores: An Action Plan for Retailers

Direct-to-consumer (DTC) brands who’ve made their mark online are catching onto a new next step to grow business: planting roots. For many brands, brick-and-mortar stores stand as the antidote to increasing noise in the digital space. But more than that, they offer a unique opportunity to immerse a buyer in the experience that a product can provide. DTC companies that use physical retail locations to their advantage see large dividends in their investments, as physical locations allow for elevated brand awareness in targeted markets– often in a genuine, tangible way- a way in which boosted ads or Instagram posts wouldn’t have otherwise reached. 

So how can a digitally native brand use good old-fashioned brick-and-mortar concepts to build their business and expand their reach? Here are three steps that brands can use to elevate their buyers’ retail experience and take their businesses from clicks to bricks. 

1. Consider What You Want the Customer’s Experience to Be—and Put it First

When Google opened its first retail location in New York City in 2021, it welcomed customers inside, knowing exactly what they would be experiencing. That’s because the digital giant had already tested everything in a full-scale mockup back home in California to understand the impact of every single element of the store: the store’s layout, the lighting, the technology the store would include, and most importantly, the customer’s experience

DTC companies are well-positioned to create retail experiences. That’s what they’re good at online. Recreating that skill in the physical space, while tricky, builds from that powerful, product-focused, and customer-driven foundation. But unlike the online sales funnel structure, the physical space challenge focuses on customer engagement, not the sale. That way, the customer gets control. 

Let’s go back to Google. Its retail location is littered with opportunities for shoppers to engage, which offers them something unique: insight into the brand. This strategy helps create a relationship with a potential customer from the get-go. When shoppers enter the store, they’ll come upon a big glass structure near the main entrance that teaches a user how the company’s translation software works by translating the words a customer speaks out loud in real-time. Shoppers can also use the store’s “Sandboxes” or separate rooms that let them test products in real-life scenarios. Each part of the store is meant to provide a give-and-take: you try our product, we teach you what it can do. And at the end of the day, that’s what sells. 

2: Consider the Franchise: The Big Expansion Leap for DTC Brands

In-store experiences lead to reaching new markets. New market reach leads to sales. Sales lead to growth. And growth leads to expansion—and the need for a few more hands-on deck. That’s where franchising comes in. The DTC pioneer in this business model is Madison Reed, the ubiquitous hair color subscription brand you’ve probably heard about in your favorite podcast advertisements. The company, which already had Color Bars for clients that wanted to get their hair professionally done, announced in 2019 that it would be opening 600 more locations by 2024, 500 of which will be owned and operated by franchisees. It’s one of the first of its kind to try franchising as a way to expand its growth. But it won’t be the last.

A Madison Reed Storefront in Boston
Photo by Boston Real Estate Times

For many DTC brands, the appeal of franchising over distributing products wholesale mirrors their original intent: to market directly to the consumer. Franchising (and brick-and-mortar retail in general) takes that DTC strategy to the physical world, where local entrepreneurs can open up smaller markets to becoming brand evangelists. And while the DTC and franchising business models still have yet to overlap significantly, they should be on any brand’s growth list to consider. 

3. Team Up with Long-Standing Brick-and-Mortar Stores to Promote Products

One word: partnerships. 

Partnerships, especially for smaller, independent businesses, are powerful for many reasons, but the most consequential one is that a partner that has long-standing experience in offline retail sales—and what’s more, a location—can get the ball rolling to expanded markets faster. Although the concept of retailers showcasing their brand(s) in stores other than their own is nothing new, the concept of bringing digitally native brands to life in the physical space is a new concept for retailers and their customers, marrying brand loyalty to DTC brands with a targeted, omnichannel retail experience.

Several brands are seeing success with this method. Consider the hit nail polish brand Olive & June: in 2019, it ran a limited edition collection at Target—and sold out nationwide in two weeks. Fast forward to nine months later, and it secured a permanent retail partnership with the big-box retailer. (Target is the king of retail partnerships: in the summer of 2021, the company announced a collaboration with up-and-coming brands Jinx, a dog wellness startup, and Stojo, a sustainable homewares brand, adding to an already-long list of partners diversifying their shelves.)

An Olive & June Display at Target
Photo by Passion for Savings

Or take the problem that Casper, the online mattress company, had to solve. To reduce friction in the buying process, it needed customers to be able to touch, feel, and test its products. Enter its new partnership with Bed, Bath & Beyond: opening a shop-in-shop in a few of the store’s East Coast locations so customers can test their products in a bedroom-like pop-up. Likewise, with clothing brand Indochino’s new partnership with Nordstrom, which will include store sections complete with workers to help shoppers choose fabrics, create tailored fits, and design custom apparel to ship to shoppers in 2-3 weeks. Customers are still receiving the same service and customization that they’ve come to expect from Indochino but now can touch, see, and experience the process in a retail environment. 

Considering a Brick and Mortar Expansion? Get in Touch with the Retail Experts 

It can be daunting to figure out the details of moving a DTC brand from clicks to bricks. Taking the leap is always the hardest part. If you’re looking to get your products into physical retail locations, reach out to us. Our team of dedicated retail experts can help guide you into the next phase of your business.

July 28, 2021