The trend: With their online customer acquisition costs rising and ecommerce sales decelerating, digitally native direct-to-consumer (D2C) brands are looking elsewhere for growth, including opening stores and selling wholesale to other merchants.
How we got here: Digitally native brands such as Warby Parker, Dollar Shave Club, and Casper built their businesses by leveraging low-cost digital ads to reach consumers with a message that by cutting out retailers and selling directly to shoppers, they could sell goods at lower prices.
A broader reach: Physical stores serve as a billboard for digitally native brands, enable shoppers to touch merchandise, and provide an opportunity for in-store staff to build connections with customers.
The big takeaway: Building out an offline presence is expensive and success is far from guaranteed. That presents a particular challenge at a time when rising interest rates and slowing economic growth are causing many retailers to focus on their bottom lines.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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