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Why This Successful Digital-First Retail Startup Just Opened a Storefront Location

Why This Successful Digital-First Retail Startup Just Opened a Storefront Location

The result is a steady decline in shopping mall visits -- and shopping malls -- since 2010, and online retail now accounts for a double-di

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The result is a steady decline in shopping mall visits — and shopping malls — since 2010, and online retail now accounts for a double-digit percentage (and rising) of total retail sales.

Increasingly, though, many successful online retailers have decided to open brick-and-mortar stores, or play a part in shorter-term pop-ups. 

The store also features items from brands like Wool & Prince, Craig Hill, Fox Umbrellas, Hestra Gloves, North & Mark, and B.M. Franklin & Co.

Why share space with other brands? And why open a physical storefront in the first place? To find out I talked with Matthew Stuart, co-founder (along with Jimmy Lau) of Stuart & Lau.

The brand is thriving, so much so that you’ve at times run out of inventory. So why expand into brick-and-mortar?

We’ve always felt it was important to have a place where people can touch, feel, and kick the tires. Some people need that, especially for a bag they will carry every day.

But we also want to flesh out the brand, to have a home base, a headquarters that represents us. We’ve seen other digital-first brands successfully shift into brick-and-mortar, and we believe there’s a strong case for us as well.  

Plus, especially with respect to the current NYC retail environment… it’s quite brand friendly. Landlords, owners of properties… some have really struggled. Rents are down, terms are better… we might not be at the bottom, but it’s a definitely a good time.

And most importantly, we feel it will be an investment that will really help us accelerate the brand.

You also experimented with a pop-up before taking a deeper dive.

We were part of a ten-day pop-up with a number of other men’s brands. We had a lot of success with it, had a surprising amount of fun… so in some ways, this is just a bigger and better version. 

In fact, I would recommend other brands considering opening a physical store to do the same.  We learned what worked in terms of how to lay out the store. We learned how long it takes to plan. We learned a lot about all the behind the scenes logistics: Coordinating between brands, coordinating payments, putting together a nice mix of direct-to-consumer brands that don’t have a presence in NYC that also align with our vision of well-build products that make life simpler and easier… just planning for a 10-day pop-up took months.

We basically started planning for the SoHo store the day after we finished the 10-day pop-up.

Was it hard to decide which brands made sense to share the space with?

Obviously filtering out brands that make bags was easy. (Laughs.) But otherwise it was easier than you might think. We looked for brands with an elevated, timeless style… that were basically a version of us but with different products: Outerwear, shirts, hats, items like bottles and thermoses that you carry every day that are also sustainable and not single-use…

Then the tricky part was creating the right mix so it all feels different, yet part of an overall theme. But that was actually really fun — and had the added bonus of making us think about our brand from a slightly different perspective.

Since running a company can sometimes feel oddly lonely, as you pulled it together I’m guessing it was fun to meet other entrepreneurs.

It’s definitely been fun, energizing, and rewarding to work with other brands, to connect with their customers… and we have plans for activations where different customer bases can co-mingle with each other, too.

People are very open, willing to share, willing to connect… partly that’s because most of us have all come from other industries and other backgrounds. As entrepreneurs, we’re almost new to this. No one was doing something similar before starting their companies.

So we’re all on this learning curve together… and it’s been great to interact and trade notes and connect.

Plus, most of us see our biggest competition as the legacy brands have big market shares… while we’re all working hard to show customers we have better products, and better value propositions.

Was it hard to pick the right location, especially since NYC landlords are almost legendarily tough?

Their reputations proceed them. (Laughs.) We had some near misses.

But we’re extremely happy with the location we chose, and it’s working out really well.

In a broader sense, it’s a very good time for brands looking for spaces. The retail marketplace is still in the buyer’s favor, still working through the legacy issues of larger retail brands contracting. The same is true with restaurants. So as a small direct-to-consumer taking a space for the first time… we’re definitely the beneficiaries of the current climate.

That’s why lots of brands are coming into Soho in particular — and we knew we wanted to be in that mix. Our customers could be anywhere in the metro area, so providing a central place for them is important.

And as for your comment about landlords, I have a commercial real estate background… which helped us feel a little more comfortable with the process. Like I said, we all come from different industries, and occasionally that’s an advantage. (Laughs.)

What have you learned from talking to customers in person as opposed to only collecting data, feedback, etc. online?

We get a lot of questions and feedback from online, but at times it’s different in the store. We’ve found some overlaps, places where we haven’t made something as clear as it could be, or answered the right questions, or made our value proposition more apparent… and sometimes the difference is based on how we present things in the store.

How you best present a product online may be very different from how you best present it on the floor.

The store experience also lets us learn more about why people make certain purchases, what drives their decisions… you can extract a little of that online, but not to the degree and depth you can offline. 

How customers make style choices, the functions value, how they evaluate a product… those are all important data points that have been great for our team — and is data we wouldn’t otherwise have.

Is that the primary goal: To gain a deeper understanding of your customers and the market?

Well, we also plan for the store to be profitable. (Laughs.) 

But we do have broader goals as well. We have the ability to maintain the space afterwards, and are of the mindset that will happen. We want to make it work as a long-term destination that people know and return to.

Yet it’s also valuable in the short-term as a way to let NYC customers see the product in person. Many people want to see a product first, especially one they will carry every day.

And then there’s the big picture of further establishing the brand: We’re real, we’re credible, we’re in it for the long haul. Giving NYC customers — which is not a small part of our business — a place where they see our brand come to life… that fills out the story more broadly. Presenting a full lifestyle assortment tells our story in a different way.

By curating things our customers might need, items they might not know about that we can introduce to them… we hope that’s of value and provides a reason for them to come back on the regular.

That’s where sharing space with other brands can really pay off: Fostering a relationship with all of our customers, creating a place where people want to stop by to see what’s new… 

Having a store provide not just a transaction, but an experience as well, is the key. 

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

This article is from Inc.com

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