How D2C Brands Like Warby Parker Are Making Physical Stores Work

As shoppers resume their in-store experiences, brands and retailers are reassessing their selling strategies.

Retailers are seeking to enhance their interactive displays to entice more consumers, while brands are striving to establish an in-store presence to boost sales and attract fresh customers. These customers prefer getting products immediately after purchase, bypassing shipping wait times and surging shipping prices and returns.

See also: Amazon Charging New Fees on Some Returns

Brick-and-mortar stores continue to be the primary revenue source for many retailers. In fact, over 85% of all retail sales in the U.S. still occur in physical stores rather than online. And that’s a finding pushing direct-to-consumer (D2C) brands to rethink their online dominate strategy.

See also: Retailers Give In-Store Media an Interactive Twist to Boost Basket Size

Warby Parker Commits to Brick-and-Mortar

Online retailer for prescription glasses Warby Parker announced in late 2022 that it would be intensifying its efforts to launch 200 brick-and-mortar stores in the coming years, despite incurring a net loss of $32.2 million during Q2 2022, higher than the $21.9 million loss recorded in Q2 2021. But Warby Parker’s co-founder, Dave Gilboa, told CNBC, the decision was driven by customer demand for physical locations that provide eye exams.

During the interview, Gilboa said that in their conversations with customers, the two most frequent responses for not shopping with Warby Parker were the lack of nearby physical stores and not having a current prescription. He added that they are addressing these issues by making their stores easily accessible and convenient for customers.

In Q2 2022, Warby Parker launched nine new stores, bringing their total to 190 locations. During the Q2 earnings report, the company revised its 2022 projections and predicted 40 new store openings for the year, which would raise the total to 201.

Amid rising inflation, Warby Parker reduced its executive workforce by 15% and total employee count by 2% by eliminating 63 corporate positions in August 2022.

Warby Parker experienced growth in Q2 2022, with net revenues reaching $149.6 million, a 13.7% rise from Q2 2021. The number of active customers increased by 8.7% to 2.26 million year-over-year, and the average revenue per customer grew by 8.2% to $254. These positive results are good news for the company.

Hims & Hers Health Expands Reach

Then there’s multi-specialty telehealth platform Hims & Hers Health, which focuses on providing personalized health and wellness, and started bringing its offerings into stores in 2021, starting with the Vitamin Shoppe. The move allowed the D2C brand get in front of consumers.

“Providing consumers access to personalized care has always been our priority,” said Melissa Baird, chief operating officer of Hims & Hers. “We are excited to work with The Vitamin Shoppe, which shares our passion for helping consumers be their best selves, to bring our hair care solutions to more physical retail locations, as well as their digital shoppers.”

Hims & Hers Health then teamed up with Walgreens in 2021 to enter over 7,000 stores and then 1,400 physical stores with its Walmart partnership in 2022.

Care/of Expands Into Sam’s Club

Care/of, a supplement brand, expanded its wholesale reach with a second launch after Target, now partnering with Sam’s Club to offer customized supplement sets for men and women featuring their most popular products.

Craig Elbert, co-founder of Care/of, stated that its customer base comprises numerous parents and young families, which aligns well with Sam’s Club’s demographic. Care/of’s decision to partner with a warehouse club for its second retail venture was based on insights gained from customer feedback, including surveys and credit card data.

By integrating Sam’s Club as a purchase location, Care/of has updated its mobile application, enabling users to select the location where they made their purchases. This new feature helps the company to promptly identify the particular SKUs that the user has purchased and incorporate them into their daily reminders. Elbert explained that this approach encourages users to engage with the digital product by integrating it into the app.

See also: Nearly Half of Consumers Use Smartphones as They Shop in Stores

The update of the mobile app follows findings from a “2023 Global Digital Shopping Index,” which found that 87% of shoppers went out of their homes to buy goods last year. However, the digital transformation has taken root, as these same customers used digital payment options while making face-to-face transactions. Also 46% of shoppers worldwide who purchased items in-store used their smartphones to enhance their most recent in-store shopping experience.

Beyond Yoga Enters Physical Retail

More recently, activewear brand Beyond Yoga opened its third brick-and-mortar location and is expected to open a fourth on May 11 in Larchmont Village in Los Angeles. According to a post on LinkedIn made on Saturday (April 22), Beyond Yoga stated that their new store at Westfield Century City in Los Angeles now showcases their collections for women, maternity, extended sizing, and men.

See also: Beyond Yoga to Open 4th Store May 11

Beyond Yoga’s Westfield Century City store at is the brand’s third in Southern California, following the opening of its Irvine Spectrum Center store five months ago and its first store in Santa Monica six months ago.

According to Yahoo Finance’s report on Friday (April 21), Beyond Yoga plans to slowly increase its brick-and-mortar presence in Los Angeles before moving on to Northern California.

Michelle Wahler, the co-founder and CEO, told Yahoo Finance, “We are still new to physical stores, and we learn something new every day.”