What’s in store?

It used to be brick-and-mortar stores making the move to trade online. Now, some e-tailers are setting up shop on main street. What makes them explore selling outside the digital space?

Step into an Indochino showroom and you are greeted by a bright and airy space dotted with leather sofas, designer armchairs and the odd computer screen. Tied to racks, like giant neckties, are swathes of exquisite fabrics; next to them mannequins display slim-cut suits in a variety of hues.

Ranked among the Top 500 in the Internet Retailer’s 2016 Guide, made-to-measure suit company Indochino is one of a growing number of online businesses setting up physical stores. 

Founded in 2007 by then-university students Kyle Vucko and Heikal Gani, Indochino quickly made its mark, enjoying triple-digit growth in its early years and eventually emerging as the world’s largest made-to-measure men’s apparel company. Customers shop by appointment with a “style guide,” an in-house suit expert, who will advise on fabric selection and customizations, and take their measurements. The finished suit arrives on their doorstep around four weeks later.

So, with 13 stores in Canada and the U.S. and plans to open more, is Indochino moving on from online? Not at all, says co-founder Heikal Gani: “Our online business remains one of the main drivers of the business. However, early on in the business, we recognized that a customer’s experience can be further enriched with our multichannel platforms. For some of our customers, they would prefer to walk in and get measured by one of our tailor specialists or touch, see and compare the various fabrics available. Also, from a marketing perspective, a person who walks by one of our stores, and later on sees an ad on Facebook, may be enticed to find out more about us.”

Data analytics drive Indochino’s development, with data collected online from Indochino.com used to determine new store locations. While the online business is the main driver for Indochino, sales in stores actually tend to drive higher-value sales, with customers spending an average of $100 or more, which Gani puts down to the fact that customers can feel the fabrics, see sample suits and are assisted by staff – something the online world cannot offer.

Indochino is not alone in its move to the bricks-and-mortar world. According to the Guardian, in the past few years some 20 online retailers have started opening physical stores in the U.S. alone, among them Birchbox and eye- and sunglasses merchant Warby Parker.

The biggest stir was undoubtedly caused by Amazon when, after decades of successful online trading, the company opened a physical bookstore in Seattle’s University Village in 2015. To date, Amazon has opened ten book stores, with more in the pipeline. However, like at Indochino, these bricks-and-mortar stores are part of an omnichannel strategy and also serve as showrooms for devices such as the Echo and Echo Dot.

Then there’s Amazon Go, a checkout-free grocery store piloted in Seattle in 2016, which the company describes as “No lines. No checkout. Just grab and go.” Customers use an app, simply select their products and go, with purchases charged to their account. Currently only open to Amazon employees, a rollout is predicted for this year. While some media such as geekwire.com report that beta testing is facing some challenges, experts reckon that the concept might be a true game changer for the retail industry.

So, after a decade that saw many bricks-and-mortar retailers building up an online presence, it looks like the reverse may now also be the case – if you’re an online retailer, it may make good business sense to expand into the physical realm. 

Perhaps, far from being past its sell-by date, the good old-fashioned store might actually emerge as a key building block in a winning omnichannel strategy. —  Michelle Bach


Published: June 2017

Image: PR