1、December 2023How Physical StoresHelp DNBs ThriveExplore how DNBs(Digitally Native Brands)leveragephysical stores to grow their brand,reach core audiences,and increase customer engagement.1Table of ContentsWhats A DNB Anyway?3The Direct Sales Opportunity3Reaching New Audiences Through Physical Stores

2、4Warby Parker:Higher Foot Traffic,Higher Median HHI4Vuori:Welcoming Singles in California6Alo Yoga:Growing its Reach Among Sunset Boomers7The Power of Retail Stores for Digitally Native Brands8Rothys Outlet Seeing More Visitors Than Nearby Shoe Stores9The Pop-Up Effect10SKIMS by Kim Kardashian Spark

3、s Visits to Rockefellers Channel Gardens11Digitally Native,Thriving Offline12Key Takeaways13 2023 Placer Labs,Inc.|More insights at placer.ai|2Whats A DNB Anyway?DNBs Digitally Native Brands refer to retailers that began their retail journeyexclusively online,selling their product line direct-to-con

4、sumers through their owneddigital channel.But although all these businesses start out as a pure e-commerceplay,many DNBs eventually move offline,choosing to leverage the various benefits ofbrick-and-mortar channels to grow their business even further.This white paper uses location intelligence to re

5、veal the different brick-and-mortarstrategies helping DNBs broaden their reach,build their brand,and acquire newaudiences.Several DNBs are building massive store fleets,while others focus on acouple well-placed stores and some focus on temporary pop-ups to reap thebenefits of physical stores without

6、 the long-term commitment.Read on to discover the diverse methods that digitally native brands are enlisting to todrive growth through brick-and-mortar expansion.The Direct Sales OpportunityPhysical venues offer retailers a range of benefits.Brick-and-mortar stores can openup new sales channels,faci

7、litate an immersive brand experience,enable consumersto engage directly with the brands product,and reduce customer acquisition costs.DNBs have proved particularly adept at opening stores that consumers will actuallywant to visit,with leading digitally native brands seeing strong foot traffic trends

8、 in2023.Analyzing year-over-year(YoY)data for Q3 2023 shows that,while many retailersstruggled,DNB leaders such as Vuori,Allbirds,Everlane,and Warby Parker all sawsignificant growth in quarterly visits per venue.Many of these brands also underwentsignificant expansions,but the increase in visits per

9、 venue reveals that many of theDNBs are seeing more crowded stores despite the increase in number of overallvenues.The success of these brands in operating stores that consumers want to keep 2023 Placer Labs,Inc.|More insights at placer.ai|3visiting even in times of economic headwinds suggests that

10、DNBs are particularlywell positioned to take advantage of the diverse benefits of offline stores.Reaching New Audiences Through Physical StoresDigitally native brands are known for their sophisticated use of customer data.DNBscan study the data generated by their e-commerce channels to identify thei

11、r audienceand consistently tweak their messaging and promotional offerings to reach their idealconsumer base.Does moving to brick-and-mortar locations make it more difficult forthese companies to reach specific audiences?Or do physical stores actually allowDNBs to reach a wider range of shoppers whi

12、le keeping its target audience engaged?Warby Parker:Higher Foot Traffic,Higher Median HHIWarby Parker is perhaps one of the earliest and best-known DNBs to move offline.The eyewear chain began as an online affordable glasses retailer in 2010 and quicklyrecognized the benefits offered by brick-and-mo

13、rtar stores.The company opened its 2023 Placer Labs,Inc.|More insights at placer.ai|4first physical location in 2013 and has since grown to include over 200 storesnationwide,with the chain reporting consistent foot traffic increases YoY.From the start,the vision-care chain created a new niche by pos

14、itioning itself as alower-priced eyeglasses brand that maintained the sense of prestige and exclusivityof much fancier labels.Recently,the company has introduced some higher-pricedeyecare products all while maintaining its aura of affordability.And foot traffic data reveals that the companys emphasi

15、s on affordability is notdeterring higher-income visitors.Between Q3 2022 and Q3 2023,the share of#SuburbChic and#FamilyOutpost segments(wealthier families living in suburbs,asdefined by Spatial.ai:Personalive data)in Warby Parkers trade area grew significantly.This trend indicates that Warby Parker

16、s physical locations are successfully attractinga market segment with major spending power,which could help explain the brandscontinued success.2023 Placer Labs,Inc.|More insights at placer.ai|5Vuori:Welcoming Singles in CaliforniaWhile some DNBs are growing their reach among wealthy families,others

17、 areattracting larger shares of younger consumers.One such brand is Vuori,a San Diegoathleisure company that began by selling mens activewear at yoga studios beforepivoting to a direct-to-consumer e-commerce model.Like Warby Parker,the brandhas leaned into offline expansion.The companys first store

18、opened in 2021,andVuori has set its sights on opening 25 stores a year,with the eventual goal ofoperating 100 stores by 2026.The chain currently operates 48 stores,with the majority in its home state andwellness haven California.Diving into the demographics of these stores trade areareveals that the

19、y attract an outsize share of singles and individuals from non-familyhouseholds and the share of this segment in Vuoris trade area is growing over time.The share of“Wizards”white-collar singles in their 30s in Vuoris trade areas in Q32022 was 15%more than in California as a whole.By Q3 2023,that seg

20、ment wasover-indexed by 94%relative to the California average.Similarly,the share of the“Thriving Alone”segment(defined as high earning singles in their late 20s to 30s)inVuoris trade areas relative to the wider California average grew from 34%to 78%inthe same period.As the company continues to expa

21、nd,the increase in the over-representation of the“Wizards”and“Thriving Alone”segments Vuoris trade highlights the companyssuccess in reaching its core audience through its strategically located stores.2023 Placer Labs,Inc.|More insights at placer.ai|6Alo Yoga:Growing its Reach Among Sunset BoomersOp

22、ening physical stores doesnt just allow DNBs to sell to audiences that theyrealready reaching online.Instead,brick-and-mortar venues can help retailers branchout to new customer segments that the company may be missing on its e-commercechannels.For example,Alo Yoga,a favorite among celebrities and i

23、nfluencers,has positioneditself as a go-to for Gen Z and Gen Alpha.But digging deeper into the captured andpotential market of the brands store fleet indicates that Alo Yoga stores actuallyattract a large share of older visitors specifically“Sunset Boomers”,defined as“Well-offboomers near or at reti

24、rement age living in picturesque locations.”As the graph below shows,the share of“Sunset Boomers”within Alo Yoga venuespotential market(Census Block Groups where visitors reside,weighed according to 2023 Placer Labs,Inc.|More insights at placer.ai|7the size of each CBG)was smaller than the share of“

25、Sunset Boomers”with thevenues captured market(CBGs where visitors reside,weighed according to the visitshare from each CBG).This suggests that“Sunset Boomers”are overrepresented inthe visitor base of top Alo Yoga locations in the wider Los Angeles area and so thecompanys offline stores are succeedin

26、g in reaching this audience that it may bemissing online.The Power of Retail Stores for Digitally Native BrandsSome digitally native brands choose to build massive store fleets and establish anetwork of brick-and-mortar sales channels that rivals the original e-commercebusiness.But others choose to

27、establish a more modest offline presence focused oncultivating strong customer relationships,enhancing brand awareness,andfacilitating product engagement.And analyzing visit data to the first store of a DNB 2023 Placer Labs,Inc.|More insights at placer.ai|8brand with a limited offline presence shows

28、 the strong demand for DNBs physicalvenues.Rothys Outlet Seeing More Visitors Than Nearby Shoe StoresRothys,a DNB founded in 2012,sells eco-friendly,comfortable,and fashionablefootwear.The shoes were a massive success,and the company opened the first of its13 stores in 2018.And in September 2023,it

29、opened its first outlet store at the SanFrancisco Premium Outlets mall,in Livermore,CA.So far,the Rothys outlet has met with significant success visitation data reveals thatthe store pulls in five times more visits per square foot compared to other footwearretailers in the same shopping center.Rothy

30、s trade area was also among the largesttrade areas for stores in the outlet mall indicating that Rothys visitors weresignificantly more likely to travel far distances to visit the Rothys outlet than othernearby shoe stores.Rothys first outlets impressive visit metrics highlight the tangible exciteme

31、nt thatphysical stores can generate and reveal how even a limited offline presence canhelp DNBs promote brand engagement.2023 Placer Labs,Inc.|More insights at placer.ai|9The Pop-Up EffectCertain DNBs like Warby Parker choose to establish a significant offline store fleet,and some,like Rothys,open a

32、 few strategically placed locations.Others go a differentroute and turn to pop-ups to gain some of the advantages of a brick-and-mortarpresence without the long term investment.Pop-ups allow companies to dip theirtoes into the physical retail waters by offering DNBs a low-stakes way to amplify their

33、market presence,engage with customers,and trial a potential permanent offline 2023 Placer Labs,Inc.|More insights at placer.ai|10move.Pop-ups also can also benefit host venues,highlighting the multiple benefits ofthe format.SKIMS by Kim Kardashian Sparks Visits to Rockefellers Channel GardensKim Kar

34、dashian,billionaire media personality and businesswoman,launched herwildly successful SKIMS shapewear and clothing brand in 2019.The brand,whichhopes to open its first physical store in Los Angeles in 2024,has hosted severalpop-ups to significant success.One way to assess the impact of pop-ups is to

35、 analyze the location intelligence datafor the host venue.In 2023,SKIMS recent pop-up at Rockefeller Plaza between May16th and 29th drove a major traffic spike to the Channel Gardens in the Plaza,wherethe pop-up was located.The crowd that came out to check out the pop-up not onlyexperienced SKIMS pr

36、oducts first-hand and enjoyed an immersive brand experience SKIMS visitors likely boosted visits at nearby businesses as well.And SKIMS location inthe popular NYC hotspot meant that passersby who were in the area anyways alsogot exposed to the brand and its offering.The Channel Gardens at Rockefelle

37、r Plaza traffic spike during the SKIMS pop-upunderscores the mutually beneficial relationship between pop-up stores and theirhosting venues.2023 Placer Labs,Inc.|More insights at placer.ai|11Digitally Native,Thriving OfflineWhile digitally native brands begin online,pivoting to physical retail locat

38、ions can helpincrease reach across a wider customer base.And there are many different strategiesthat DNBs can employ to reap the benefits of physical retail including establishinglarge store fleets,strategically opening a few venues,or even just operatingtemporary pop-ups.Whatever the method,leaning

39、 into the potential ofbrick-and-mortar stores can help companies increase brand awareness,driveaudience engagement,and ultimately sell more products.2023 Placer Labs,Inc.|More insights at placer.ai|12Key Takeaways1.Brick-and-Mortar Stores May Help Chains Reach New Audiences:Brandslike Warby Parker,V

40、uori,and Alo Yoga have all expanded their offline reachamong key audience segments over the past year.And the increase in theseaudience segments among the chains visitors has been accompanied by risingvisits to the chain overall,highlighting how offline stores help chains grow theirconsumer base.2.R

41、etail Locations for Hyped Brands Bring in Visitors:A few strategicallylocated stores can also have a major impact on DNBs.Rothys opened its firstoutlet store in San Francisco and drew in significantly more foot traffic thanother footwear stores in the same outlet mall.The chains visitors also camefr

42、om farther away than other stores,highlighting the draw a popular onlinebrand can have.3.Pop-Ups Can Help Hosts and Brands:Through pop-ups,DNBs can also reapthe benefits of an offline presence without the long-term investment of apermanent store.Many DNBs,such as SKIMS,experimented with pop-upsahead of opening physical stores,driving plenty of brand engagement forSKIMS and traffic to the host venue on the way.2023 Placer Labs,Inc.|More insights at placer.ai|13