In November 2015, online retailer Amazon.com opened up its first physical shop in Seattle. Chinese ecommerce giant Alibaba also opened its first physical store in North China last year to boost sales of its imported products. These new forays into the physical world signal the start of the latest trend in the retail sector. If you run a successful online business, then it may be time for you too to follow suit and open up your own retail shop. Or at the very least consider a pop-up.
Amazon Books is currently the only physical Amazon shop. Located at the University Village mall in Seattle, where it’s headquartered, the store gives shoppers the option to test out its proprietary devices such as its Kindle e-reader and Fire Tablet. The move has been a success and reports suggest that Amazon is looking to open up more physical locations in the future, with the next step being to open several more bookshops in the United States.
This new trend towards physical retail presence is driven by savvy modern consumers demanding a combination of low prices, with the option of physically examining and getting a feel for a product before making a purchase either in-store or online.
For the retailer, too, there are obvious benefits of expanding into a physical location. Opening up a physical shop isn’t necessarily a change of ways, but more of an extension to their brand. The shopfront itself presents an opportunity to echo and promote the online brand, encompassing social media, advertising, and print marketing.
Besides the convenience for shoppers, by offering a ‘pick up in store’ delivery option, there are obvious cost savings from the retailer in terms of packing and shipping. New developments in technology such as the self-service kiosk can also keep down staffing overheads, whilst providing a fast and efficient in-store experience.
For those not quite ready to make the full leap from online to physical, organising a pop-up shop offers the perfect opportunity to test out how your shop would be received by your target audience. This method has worked before for a number of brands, and can be particularly effective for short term campaigns such as new product launches, seasonal sales, testing a new market, or simply to build customer relations, do some market research, or give a live demonstration of how a product works. Due to the short term nature of pop-ups, they’re more affordable and less involved than a permanent location, and you have the opportunity to stop it and minimise any losses if things aren’t going too well. The biggest thing to consider before launching a pop-up shop is the goal, keep it simple and remain focused on that and you could have a real success on your hands.
At Boost Capital, we’re specialist lenders to the retail sector. If you’re considering opening up a physical retail location, we’re help to help with the funding needed to get your plans off the ground.