Are You In retail?
Ninety percent of all retail transactions happen offline.
Companies who started off as online-only businesses are now investing in brick-and-mortar. But, brick-and-mortar businesses are incredibly expensive, risky, and slow to scale. While exploring retail, companies really only have three options: pop-up shops, retail stores, and flagship stores.
Pop-up Shops
While the costs of a pop-up shop may vary, they are incredibly administrative intensive. Pop-ups require someone to find a location, negotiate with the landlord, design an experience, hire staff, and manage day-to-day activities. It usually takes at least one full time staff member to dedicate themselves to planning and operating a pop-up shop. This is why pop-ups are often seen as a place holder for a more permanent retail strategy.
Retail Stores
Retail stores cost anywhere from $250,000 to $500,000 per store. It can take months to find the right location, design an experience, complete the buildout, and become operational. Warby Parker and Bonobos are two successful examples of startups opening retail stores nationwide. However, most companies don’t have access to the kind of capital required to create stores nationally.
Flagship Store
Flagship stores have proven useful for companies like Apple, providing a great branding experience. Though, these are incredibly expensive for brands to create and usually not profitable. Most startups are unable to afford this expense.
The Opportunity
There are a few companies that are trying to make retail more accessible. B8ta and Bulletin allow brands to rent space in their stores to display products. Haveli, a company I cofounded, makes popup stores inside shipping container for online brands.
Retail is an exciting place to be. The bold decisions we make today will shape how we shop for years to come.
