1、January 2023Digitally Native andDirect-to-ConsumerBrands Take to the StreetsThis report looks at online and offline visit data to analyze whydigital businesses are investing in brick-and-mortar stores andwhat can be learned from their success.E-Commerce Cant Erase Physical RetailThe pandemic acceler

2、ated an e-commerce boom that had been a long time in the making.Digitally Native Brands(DNBs)brands that first launch online as well asDirect-to-Consumer Companies(DTCs)those that sell primarily through direct channelsthrived in this environment.But while some doomsayers predicted(and not for the fi

3、rst time)the collapse ofbrick-and-mortar retail,foot traffic data continues to demonstrate the vital role physicalstores play in the modern world.Brick-and-mortar locations can offer an immersiveexperience that is nearly impossible to replicate online while providing significant supportto almost eve

4、ry aspect of a retailers operational cycle from customer acquisition tofulfillment to reverse logistics.As the dust settles on a post-pandemic retail landscape,itsbecoming increasingly clear that even brands that were born,or primarily operate,in thedigital sphere can benefit from an offline presenc

5、e.This white paper takes an in-depth look at DNBs and DTCs operating in the physical world.Using a variety of location intelligence metrics,the report reveals how a robustbrick-and-mortar operation is critical for DTCs and DNBs looking to build brand awareness,streamline distribution,and drive consu

6、mer engagement.Well also explore the ways inwhich digital brands are uniquely positioned to make the most out of physical stores.Growing Online,Growing OffDTCs and DNBs have a lot to gain from growing their offline footprint,but perhaps themost straightforward benefit is simply more visits.And consi

7、dering the increasing difficultyand cost of acquiring new customers online especially for a DNB that enjoys high brandawareness in the digital sphere physical stores are an efficient way to grow a customerbase and maximize ROI.In this section,we look at two DNBs that have recently increased their br

8、ick-and-mortarpresence to understand how offline expansion helps DNBs grow their brands andaudience.2023 Placer Labs,Inc.|More insights at placer.ai|2Allbirds store,Livermore,California.Image:Madison Reed:Delivering SpeedMadison Reeds recent expansion shows how a robust brick-and-mortar campaign can

9、drive visits up both on and offline.The hair color company,which sells products forat-home application,significantly increased its online sales during COVID.At the same time,the company more than tripled its physical footprint in a little over a year,going from 12locations in March 2020 to 38 venues

10、 in May 2021 and then more than doubled its storecount again to hit 75 Hair Color Bars in November 2022.Diving into the foot traffic data reveals that Madison Reeds brick-and-mortar expansionhas not only increased offline visits the brands online traffic has also been growingsteadily.Interestingly,t

11、he offline visit peaks of the past two years closely followed onlinepeaks,reflecting,in part,the growing role of Madison Reeds locations as fulfillment centersfor customers picking up their online orders.Without a pick-up option,Madison Reed 2023 Placer Labs,Inc.|More insights at placer.ai|3would ha

12、ve been forced to compete with other brands on delivery times and shoppers mayhave turned to other retailers that could have potentially delivered sooner.By offering in-person hair care services and anextensive product selection on its e-commercesite,Madison Reeds offline channels boostonline visits

13、 to the brand and vice versa.There is yet another reason why Madison Reeds offline and online visits are growing intandem.By offering in-person hair care services,the brand gives customers a very goodreason to visit in-store.And if customers want to replicate their results at home,they canthen buy M

14、adison Reeds products online for delivery or pick-up or return to the storeto consult with the experts.In this way,Madison Reeds offline channels boost online visitsto the brand and vice versa.2023 Placer Labs,Inc.|More insights at placer.ai|4Allbirds:Offline Visits FlyWhile Madison Reeds offline ex

15、pansion supports both online and offline traffic,Allbirdsgrowing physical footprint and wholesale partnerships show how brick-and-mortarexpansion can be a path to efficient customer acquisition for a well-established DNB.Allbirds an eco-friendly footwear and apparel company has maintained a relative

16、lystable level of online visits for most of the year,except for an expected seasonal boost toonline traffic in late November through mid-December.But thanks to the brandsconsiderable offline expansion,Allbirds has been able to consistently grow its traffic evenas visits to its online channel remaine

17、d steady.Analyzing the data shows that the companys bet on physical stores is paying off.The brandreported a 53%year-over-three-year(Yo3Y:2022 vs 2019)increase in physical store salesduring Q3 of 2022,and foot traffic data shows the brand nearly quadrupled its weekly foottraffic between the first we

18、ek of 2022 and the mid-December 2022.Even more impressive is that Allbirds expansion not only increased its overall offline traffic which is to be expected,since more stores means more opportunities for people to visit 2023 Placer Labs,Inc.|More insights at placer.ai|5the brand but the number of ave

19、rage monthly visits per store also increased.Foot trafficdata indicates that average visits per venue for the chain were up every month of 2022relative to the equivalent month in 2021,perhaps due to the increased brand recognitionand awareness generated by the companys brick-and-mortar expansion.Thr

20、ough its strategic brick-and-mortarexpansion,Allbirds succeeded in growing itsoffline traffic without cannibalizing visits to itsexisting store.Allbirds elevated year-over-year(YoY:2022 vs 2021)visits and visits per venue indicate thatthe brand managed to drive offline traffic without cannibalizing

21、visits to its existing stores even while opening multiple locations in relatively close proximity to one another.Throughan effective brick-and-mortar expansion strategy,the company enjoyed more locations and busier ones in 2022.2023 Placer Labs,Inc.|More insights at placer.ai|6Online Data:Offlines S

22、ecret WeaponEvery successful brand needs to understand who its customers are from a demographic,psychographic,and behavioral perspective.This knowledge informs all aspects of a brandsactivities,from site selection to messaging and beyond.Before the first customer walks into a physical store,DNBs alr

23、eady have an in-depthunderstanding of their target audience thanks to these companies advanced e-commerceand analytics capabilities.Armed with extensive knowledge of their customer base gainedthrough online channels such as their website and social media,DNBs know the type ofcustomer theyre selling

24、to and who theyre looking to attract their offline venues.DNBs can use location intelligence to selectlocations that will attract their target audience and then use data from offline visits tofurther refine their customer personas.These brands can use location intelligence to select locations that w

25、ill attract their targetaudience and then use data from offline visits to further refine their customer personasand hone their branding and messaging.In this section,well draw on geospatial data toshow how several DNBs have successfully built a store fleet that caters to their idealaudience segments

26、.Bonobos:A Perfect FitBonobos acquired by Walmart in 2017 is a menswear DNB that focuses on offering mengreat fitting clothes and an enjoyable shopping experience.The company carries a range ofcasual and formal apparel,as well as shoes and accessories.Analysis of the True Trade Areas of some of the

27、most popular Bonobos locations uncoversthe demographic and psychographic characteristics of the chains typical offline customers.Location intelligence reveals that,among other attributes,the typical Bonobos customer islikely to be young,hold an advanced degree,work in professional,scientific,or tech

28、nicalservices,and use Linkedin to advance his career.2023 Placer Labs,Inc.|More insights at placer.ai|7The degree to which this persona defines the chains customer base varies by store,yet allof the stores analyzed serve trade areas where residents tend to be over-indexed for mostof these attributes

29、 indicating that Bonobos has chosen its store locations wisely.Away Travel:Visits Rolling InFounded in 2015 by two former Warby Parker executives,Away Travel(or simply,Away)is adigitally native luggage and travel accessories company known for its durable bags.Incontrast to Bonobos,which targets a sp

30、ecific subset of men,Away aims to serve customersacross demographic groups.Still,Away consumers have one thing in common they allhave serious travel gear needs.2023 Placer Labs,Inc.|More insights at placer.ai|8Visitors to Aways brick-and-mortar locationsare more likely to travel abroad or to be heav

31、ydomestic business travelers,and are less likelyto take domestic vacations.Looking at the True Trade Area of top-performing locations from the past year highlightsthis unifying thread.When it comes to travel and lifestyle preferences,visitors to Awaysbrick-and-mortar locations are more likely to tra

32、vel abroad or to be heavy domesticbusiness travelers,and less likely to take domestic vacations.They prioritize qualityproducts and are also likely to travel alone and seek luxury experiences.Thesecharacteristics of Aways offline visitors seem consistent with the profile of the brandsonline shoppers

33、.The travel and lifestyle preferences prevalent in Away stores trade areas indicates afocused site selection strategy that attracts physical visitors similar to those who alreadyshop Aways products online.2023 Placer Labs,Inc.|More insights at placer.ai|9Allbirds:Landing Firmly on the GroundWeve alr

34、eady mentioned Allbirds offline visit growth and the brand also presentsanother good example of a DNBs in-store visitors matching its online following.Drawing on an AGS consumer behaviors and attitudes breakdown of residents of Allbirdstrade areas,we can describe the typical Allbirds offline visitor

35、 as anenvironmentally-conscious and diligent online shoe shopper who prefers buying naturalproducts.The classic Allbirds guest is also generally less concerned about buying productsmade in the U.S.significant,since Allbirds shoes are made in South Korea.Since Allbirds trade areas are over-indexed fo

36、r non-impulsive online shoe shoppers,itslikely that the brand expects at least some customers to come to stores to feel the fabricand try on the products,deliberate at home,and ultimately make the purchase online.Thispsychographic insight may explain Allbirds decision to open experiential stores tha

37、t dontnecessarily emphasize immediate purchases.2023 Placer Labs,Inc.|More insights at placer.ai|10Elevating ExperiencesAllbirds experiential stores is one example of DNBs and DTCs drawing brick-and-mortarlocations to facilitate discovery.While e-commerce may allow customers to convenientlyshop from

38、 the comfort of their homes,an online store cant replace the feeling of browsingphysical racks,trying on products,or feeling fabrics and materials first-hand.DNBs andDTCs that use their store fleet to engage customers on an experiential level can create alasting impression of the brand that promotes

39、 growth both on and offline.Spending Time At FlagshipsDNBs and DTCs are known for large flagship locations that embody the atmosphere andvalues of the brand.Flagship stores,which often serve as hubs for events,give visitors theopportunity to experience a brand and explore its products in an immersiv

40、e and interactiveway.Flagships communicate what brands stand for and are catalysts for connection withtheir audience.Lululemon store in Manhattan,New York.Image: 2023 Placer Labs,Inc.|More insights at placer.ai|11To understand the importance of flagship stores to DTCs and DNBs,we compared themedian

41、dwell time of select brands flagship stores to the median dwell time across theirrespective chains.Customers spend more time in flagship storesthan they did in regular stores,indicative offlagships ability to engage customers.Specifically,we compared median dwell time for the flagship stores of Allb

42、irds,Crocs,andLululemon in New York City,and Vans in Los Angeles to that of the nationwide chains.Datafor the first half of 2022 clearly shows that customers spent more time in flagship storesthan they did in regular stores,indicative of flagships ability to engage customers.By offering experiences,

43、flagship locations motivate customers to spend more timein-store,which ultimately translates to greater engagement with the brand and its values.2023 Placer Labs,Inc.|More insights at placer.ai|12Theres No Comparison to OfflineIts not just flagships that can greatly increase visitor dwell times.Look

44、ing across severalchains,we see that in Q4 2022 visitors spent significantly more time per visit atbrick-and-mortar stores than they typically do at online ones.The longer offline dwell timesindicate that physical stores facilitate discovery in a way that is not possible online,asconsumers visiting

45、a brands location are likely taking the time to discover the latestcollection,feel new fabrics,and try out items.This suggests that DNBs and DTCs and any retailer looking to engage its audience andprovide a positive experience and added value to its customers may want to considerinvesting in a brick

46、-and-mortar fleet.Alo Yoga:Turning Stores into CommunityExperiences dont just increase the time spent at a location.They transform stores intobuilding blocks of a loyal community which in turn attracts high-value foot traffic.2023 Placer Labs,Inc.|More insights at placer.ai|13Founded in 2007,Alo Yog

47、a(or Alo)opened its first brick-and-mortar store in 2016 and hasestablished itself as an apparel favorite of yogis.But Alo does more than just sell clothing the company also looks to foster community among its consumers by investing in bothvirtual and physical classes and events.Alos locations,also

48、known as Sanctuaries,attract a specific type of customer.Analysisusing Spatial.ai PersonaLive segments of frequently visited Alo locations in California thestate with the most Alo stores reveals Alo store trade areas have a high percentage of#HighRisers.These are high-income,highly-educated professi

49、onals in densely populatedareas that are also big spenders.By offering in-store classes,Alo buildscommunities that engage high-value consumers.And even among Alo locations in the California,the two Alo locations that offer studioclasses still stand out,with trade areas where a whopping 20.9%and 24.0

50、%of householdsfall into the#HighRisers segment.By offering classes,Alo stores build communities thatengage sought after high-value consumers.2023 Placer Labs,Inc.|More insights at placer.ai|14No Replacement for Brick and MortarE-commerce has grown significantly in recent decades as a highly appealin

51、g channel forretailers and for good reason.Opening an online store is relatively easy and allowsbrands to potentially reach billions of customers instantaneously.But as weve highlighted in this report,online retail is not rendering physical storesobsolete instead,brick-and-mortar venues still have a

52、 critical role to play in building out amodern retail business.And when it comes to customer acquisition,brand building,andaudience engagement,brick-and-mortar stores still hold significant advantages over adigital-only presence.As e-commerce growth slows and online and physical retail movetowards a

53、n equilibrium,DNBs and DTCs are likely to ramp up investment in store spaceand continue reaping the multiple benefits of a strategically brick-and-mortar fleet.Key Takeaways1.A physical store presence can promote both offline and online growth.Inaddition to in-store shopping and services,customers u

54、se Madison Reed locationsto pick up orders placed online.The convenient fulfillment option drives even moretraffic to the brands online channels.2.Store fleet expansion can serve as an efficient customer acquisition strategy.Allbirds has been increasing its store count and overall visits along with

55、averagevisits per venue have increased as well.And the brand managed to grow its offlinetraffic without cannibalizing visits to its existing stores,perhaps thanks to theincreased brand awareness that comes from a bigger store fleet.3.Digital brands have a wealth of information about their online cus

56、tomers thatcan inform their retail site selection and store layout.Brands like Bonobos,Allbirds,and Away Travel appear to capitalize on this advantage by placing theiroffline stores in areas that will attract the type of customers who are loyal to theirbrands online.4.Brands that invest in experienc

57、es increase face time with visitors.Flagshipstypical of DNBs and DTCs,and physical retail stores in general,provide experiences 2023 Placer Labs,Inc.|More insights at placer.ai|15that increase dwell times which likely translates to high consumer engagementand a longer-term relationship with the bran

58、d.5.High-value visitors seek community.Alo Yoga stores that offer classes bring inmore high-income customers than those that dont.By offering classes and aphysical space where like-minded people can come together,Alo Yoga maximizesthe potential ROI of its brick-and-mortar locations.2023 Placer Labs,Inc.|More insights at placer.ai|16