Why digital-only isn't enough.
The physical world still matters, even to brand-new commerce companies. Yes, many young retailers are building their businesses online, selling the majority of their goods over the web. But they’re still using real-life sales tactics like face-to-face consultants and pop-up shops to bump up their brands and form a relationship with customers.
A trio of commerce company executives—including Nadia Boujarwah, cofounder of Dia & Co, a personal styling service for plus-size women, Rati Levesque, chief merchant of the RealReal, an online consignment marketplace for luxury goods, and Gregg Renfrew, the founder of healthy beauty products Beautycounter—took the stage at Fortune’s Most Powerful Women Next Gen Summit on Wednesday to talk about the role of the physical world in an industry where the revenue is increasingly digital.
“We have a sales force in 26 cities across the U.S. on the ground selling our service to consigners,” said the RealReal’s Levesque. “They’re very passionate about the product.” Later this week, the RealReal will also bring its used luxury goods (think Chanel, Hermes and Gucci) to a holiday pop-up shop in New York’s SoHo neighborhood. “We’ve done a pop-up before and it does create customer loyalty in a new way,” said Levesque.
Beautycounter has also experimented with physical stores, and uses consultants (a.k.a. salespeople who help market and train customers about the product) to give prospective customers a chance to try and touch its products. Being able to experience the product in the real world is key, especially when it comes to beauty, according to company founder Renfrew. “Physical stores for us are brand validation,” she says. “If it’s a brand you don’t know, if you see it in the physical world you’re more likely to trust it.”
Other recent examples of online retail startups coming to the real world: Rent the Runway recently opened a shop within a Neiman Marcus department store in San Francisco, part of a larger partnership between the two companies. Amazon is dabbling in physical bookstores (even after displacing many of them), and Warby Parker is increasing its brick-and-mortar presence.
That’s not everything old is new again. Once customers try a product in the real world, said the executives at the MPW Next Gen Summit panel, their main method of buying it again is usually online.