The Retail Evolution: Why Digital Brands Are Discovering the Power of the In-Person Experience, Again

We’re all human. Retailing is one of the oldest forms of commerce, launching some of the most recognized brands in the world in an effort to brings goods, whatever they may be, to the people.

And then the internet was invented. Does anyone remember in the late 90s when the first retail apocalypse was a certainty? Who wouldn’t want to buy 50 pounds of dog food from Pets.com? Well, we all know how that turned out.

Like a fine wine, the internet continued to evolve, get better and appeal to more consumers. And with it came the second retail apocalypse with digital retailers (also with no physical retail space) actually making headway with real customers and profitability. Why do we see so many now investing in brick-and-mortar stores when the internet is all you need?

Well, it's quite simple: Humans are sensory individuals and make purchase decisions in a variety of ways. These decisions can be based on price, convenience or availability. And choices can also can be based on the senses; people buy with their eyes, their touch, their noses, their ears and their stomach.

What so many digital retailers found is the internet-only platform could only take them so far. The bakery department at the local supermarket has a very difficult time conveying the smell of its freshly baked artisanal bread via its digital storefront. Similarly, a digital retailer touting its Turkish cotton, 800-thread-count sheets is challenged to define its true luxury without having the consumer touch and feel the product.

How are traditionally digital-only retailers responding? They're building physical stores to augment and support their brands. Certainly not throwing the proverbial "baby out with the bathwater," but enhancing their retail experience by giving customers the option to buy online and pick up in-store provides a retail experience for those who still need to be old-fashioned with their senses leading the path-to-purchase journey.

When traditional digital-only retailers are building physical retail stores, they're doing it in different ways. For eyeglass retailer Warby Parker, it's doing it with volume. You might see a traditional retailer roll out an aggressive build program with hundreds, if not thousands of locations nationwide. As of this writing, Warby Parker has approximately 225 stores nationwide and growing. Its approach is to give customers the options highlighted above: customers can buy how they want based on price, convenience or the senses.

Another traditional digital-only retailer, Wayfair, has taken a slightly different approach. It currently has only one physical retail location — albeit a fully remodeled, vignette-ladened former Carson Pirie Scott location coming in at a beefy 155,000 square feet! Talk about experience. In this store, customers can do everything that's possible on the Wayfair website except they can actually see, touch and experience the product while choosing their own path to purchase. Think of it as Wayfair’s response to the concept of "showrooming," whereby a customer comes into a retail location only to go home and purchase the product from some random internet retailer. By combining the success of its digital business model with a larger than life, wow physical experience, Wayfair is attempting to bookend its customers and give them no reason to purchase anywhere else.

And then there's Amazon.com. As everyone knows, along came Amazon and our lives were forever changed. However, even the behemoth from Seattle long recognized an impersonal digital transaction could only take it so far. It has responded by acquiring Whole Foods, among other physical retailers, and bringing omnichannel options to its historically digital-only offering. Stores have been designed and retrofitted to address the changing consumer behavior seeking to touch and feel their apples while picking up their Amazon order of paper towels and Oreos while in-store.

The bottom line is retail apocalypse one nor two never materialized. Instead, what we as retail consumers experienced was the best of both worlds. Digital-only storefronts brought us new choices and allowed new brands to change the retail landscape forever. But people are people; no matter what, there will always be a need for the physical engagement as that's hard-wired into our human nature. As a consumer and someone who has spent the better part of a career in the design and build of retail, I couldn’t be happier or a bigger fan of seeing these historical digital-only brands plant their flags in a community near you.

Andrew Swedenborg is executive vice president, business development at Agility Retail, a full-service manufacturing partner.