Online Brands Try a Traditional Marketing Strategy: Physical Stores

“When you open stores, your business gets much stronger in that region because people are passing by and can just walk in,” he said, adding that his clientele likes to “feel and touch our offerings and get that experience.”

Mr. Soleimani declined to disclose his rent, but said he had a two-year lease with an option to stay for five years. He added that he had planned to open stores this year in Chicago, Houston and Miami. He found that some rents had declined during the pandemic, but that those discounts were unavailable in the locations he sought.

The same held true for Todd Snyder, a men’s wear designer who started his namesake line in 2012. He opened his first store near Madison Square Park in Manhattan in 2016. Rather than a quick rollout of subsequent stores, however, Mr. Snyder took a deliberate approach, choosing locations with special appeal. These included a former liquor store in TriBeCa, a century-old building in which he has retained the original fixtures.

He has also opened in stores in Rockefeller Center; East Hampton, N.Y.; and Greenwich, Conn. The rents vary, but there are no bargains. Rather, he said, the square-foot price is generally “more expensive than it was two years ago.”

Mr. Snyder, whose company is now owned by American Eagle Outfitters, envisions running 20 stores nationwide, but he does not anticipate that in-store purchases will exceed more than 20 percent of his revenue.

Some retailers lease their spaces directly, but others have chosen a different approach. On Bleecker Street in Greenwich Village, where Another Tomorrow has its store, several other digitally native brands line the streets, including Mack Weldon, Goodlife Clothing and Brooklinen. These companies relied on Leap, one of several start-ups that operate a “retail as a service” model, offering help in leasing and expanding stores and gathering data on shoppers.

Leap leases locations in clusters and then subleases them to retailers, said Jared Golden, a co-founder and co-chief executive of Leap. In turn, the brands pay a fee that covers rent, labor and insurance, as well as a percentage fee based on the store’s sales, he said. At the end of 2021, the company had about 50 stores in Arizona, California, Florida, Illinois, New York and Texas.

Article source: https://www.nytimes.com/2022/03/23/business/direct-consumer-retail-stores.html