Digital brands flocking to physical retail - K3 viewpoint - K3

Pure-play retailers opening physical stores is a growing feature of the industry’s landscape and is a trend that has taken hold in the US where there are around 600 such stores at present and the forecast is for around 1,500 of these digital-first brand outlets to be operating within the next five years.

These retailers recognise the advantages of adopting this old school route to market. But the decision to open up on high streets and shopping malls is not specifically grounded on old ways of thinking. The drivers behind such moves are based very much on the digital world.

One factor is the increasing cost of customer acquisition through online-only channels and this is making it very hard for the pure plays to grow their businesses. According to a report from Bernstein the e-commerce pure-plays spend around nine per cent of sales on advertising whereas for store-based retailers this falls to only four per cent.

Read the full article from the Retail Insider here.