Matt Scanlan, the CEO and co-founder of Naadam Cashmere, wanted customers in the knitwear brand’s Elizabeth Street pop-up shop in Soho to see the goats.
Naadam Cashmere’s point of differentiation, emotional hook and raison d’être, after all, depends on the goats. The brand sells direct-to-consumer cashmere, sourced directly from Mongolian goat herders. It positioned itself as the source for “ethical cashmere,” a business that mindful millennials could feel good about supporting, because the brand supports the herders.
All of this is explained in detail through illustrations, videos and brand copy on Naadam’s website and digital ads. So, when the first Naadam Cashmere pop-up opened in September of 2017, it included life-sized stuffed goats, to bring the connection to life.
“It turned out the goats actually ended up being a step too far in a certain direction. They didn’t help to sell a luxury sweater,” said Scanlan. “We needed to make the in-store experience more about the sweaters and less about the goats. You can’t be so focused on telling a story that you forget to sell product.”
Despite years of apocalyptic prophesying that retail would eventually die, the tide changed: Physical stores have become critical to the growth strategies of formerly e-commerce-only brands. From Warby Parker to Bonobos, to Casper, to Glossier, to Everlane, these brands have found that while stores are expensive to open, they pay off in profitability, lead to longer-term customer loyalty and lower costs of customer acquisition in the long run regardless of whether they’re in pop-up form or permanent.
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But when expectations for an offline experience were established in an online retail setting, opportunity can quickly become a trap, like in-store tech that causes more headaches than it erases, improperly executed inventory strategies and an emphasis on storytelling instead of faster checkout. As more e-commerce retailers — those who wrote the book on building digitally modern brands — move into physical stores, balancing brand story with basic store logistics presents a new challenge.
Building the basics
Stores draw people in, either out of recognition or curiosity. Those who walk into a brand’s store they’re unfamiliar with aren’t going to get the full story.
“It’s much harder in-store. You’re much more reliant on signage or on people communicating your brand story — things that can inform without creating friction or asking too much,” said Sucharita Kodali, principal analyst at Forrester. “It’s useful, but it’s not exactly scalable. If your theme is sustainability, or quality, I don’t know that most shoppers typically understand or appreciate the full story of the brand. Nobody could tell you what Ann Taylor’s brand story is. That’s the shortcoming of a store.”
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The best thing that a digitally native brand can do to move into the brick-and-mortar space is hire properly. Bringing on executive members with traditional retail experience and training staff to be able to communicate product information and brand background are critical.
“Online, you can get people to understand the story, so how do we bring the same story alive online and offline?” said Bouchra Ezzahraoui, co-founder of e-commerce fine jewelry brand Aurate. “The context behind pricing, product education, brand beginnings — that’s instilled in the store associates. We have videos and digital elements, too, but we have to have this connection on the personal level. Jewelry is not always an easy thing to sell.”
Here, the ability to quickly test and scrap elements of the store, as well as use data to react to customer behavior in real time, gives these brands the advantage. Ashley Merrill, the founder of luxury sleepwear brand Lunya, has incorporated in-store “macro data” into the brand’s data strategy, which helps her learn from the different ways customers interact with and respond to product, as well as what they do or don’t understand about the brand. Aurate initially tried a showroom model but quickly realized that people who visited the store wanted to leave with something, so it started stocking inventory. “When you’re offline, you have to play by offline’s rules,” said Ezzahraoui.
“What these brands are doing, or need to do be doing, is borrowing from traditional retail,” said Alex Lirtsman, chief strategist at branding agency Ready Set Rocket. “It shouldn’t be a radical departure, because the way people shop actually hasn’t changed. But when a brand’s inclination is to improve upon and optimize and augment the traditional, it might try to push boundaries where they don’t need to actually be pushed.”
Making the intangible tangible
Understanding e-commerce brands’ in-store strategies entails first understanding why they’re in stores at all: They aren’t opening stores in order to disrupt them, exactly. Physical retail can free a digital brand from the ties of expensive Facebook retargeting and Google keywords.
When luxury accessories brand Cuyana opened its first permanent retail store last week in New York, the goal was to supplant digital marketing costs with something that drives both growth and awareness.
“The way to grow was to go back to the traditional way of growing — through stores,” said Cuyana co-founder and CEO Karla Gallardo. “A big part of our marketing model has been: How do we grow this brand through a retail store? So, here we are, opening a permanent store. That’s going to make a lot of money.”
The Cuyana store
When the store doubles as a retail channel and marketing tool, the push-and-pull between branding and basic mechanics can cause tension. What matters the most when bringing a digital brand to life in-store comes down to aesthetics, not gimmicks, said Kodali.
“The biggest differentiator is in the look and feel of the store — the flooring, fixtures, ceilings. It’s all about attention to detail and putting a unique spin on the way a store is laid out and designed, through coloring and signage. That’s the biggest thing that leaves an impression in a customer’s mind,” she said.
Cuyana’s store sets an impression by positioning best-sellers front and center, and putting excess inventory in drawers so it doesn’t clutter the aesthetic. When luxury sleepwear founder Lunya opened a store, it was designed using the brand’s color palette and fonts — repeating elements online that the customer would expect to see. Naadam Cashmere followed the same approach when designing its pop-up store interior.
Simple, subtle details like fonts and colors have been more impactful than flashier branding mechanisms like in-store technology.
“Too much in-store tech is technology for technology’s sake. You put it in so people say, ‘Look, they’re forward-thinking,’” said Scanlan. “Instead, what we focus on is: Every brand has its unique core elements: a color palette, a feel. For us, it’s soft, fluffy, romantic, adventurous. So we stick to oatmeals, sands, charcoals. What you see online we want you to see in store. That space that is created offline makes sense.”
Scanlan said Naadam plans to aggressively roll out its store network, because the data around the pop-up showed that a $100,000 store investment could lower the cost of customer acquisition over time in that area by 60 percent.
“It took understanding around what in-store elements create a world for your brand offline,” said Scanlan. “We needed to evoke emotions without getting in people’s faces.”
The power these brands have is to look at offline and online sales as a means to the same end. Even if customers don’t walk away with a purchase, they needed to walk away with an impression. Maybe just not one about a stuffed goat.
