Do Stores Need Walls? Wayfair Seems to Think So!

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While some retail brands (like Lord & Taylor and Bed Bath & Beyond) have transitioned to online-only models, others are heading in the other direction, building physical locations. The latest example is Wayfair, which will open its first store later this month in Edens Plaza in Wilmette, Illinois. The 150,000-square-foot outpost will take a page from Ikea’s playbook and house a restaurant and a wide range of affordable home furnishings.

This move comes at an interesting point in Wayfair’s history. According to CNN, sales are down. Although 2023 sales were a whopping $12B, they posted a net loss for the year. They also laid off close to 2,000 workers both this year and last year.

Wayfair is hardly the first online brand to expand to brick-and-mortar.

Eyewear company Warby Parker disrupted its industry by selling affordable glasses and sunglasses via the Internet in 2010, and now, it has 200 retail stores.

When Bonobos hit the market in 2007, its concept seemed wacky. Starting online only with a mission of selling “the perfect pair of pants,” the brand expanded its product line, opened physical stores, and sold to Walmart. Today, the brand is owned by WHP Global (which also owns Express), has 68 locations, and has a wide array of men’s clothes.

Online mattress retailers Casper and Purple opened stores, as did footwear brand Allbirds and lingerie company Third Love.

Amazon has experimented over the years with various retail concepts, and stores-within-stores (like Sephora’s outposts in Kohl’s) have created a rapid and cost-effective way for brands to expand their physical locations without the investment of dedicated build-outs.

The advantages of retail locations include:

  • An ability to create a (hopefully memorable) consumer experience and connection with the brand, which is hard to deliver through a screen.
  • A real-world “try-on” experience. Sitting on a couch before taking out one’s credit card can help ensure consumer satisfaction.
  • With the right physical locations, brands can take full advantage of walk-by and drive-by traffic and in-the-moment shopping.
  • Immediate gratification. Even with rapid delivery, many consumers still love the feeling of walking out of a store with a shopping bag.

Omnichannel (a combination of online and physical locations) is ultimately the key to successful retail growth, allowing consumers to shop when and how they want. Ultimately, as long as the buyer loves that pair of glasses, throw pillow, or perfect-fitting trousers and becomes loyal to the brand, whether they purchased it from their couch or the mall is irrelevant.

For more about retail trends, join us at the Street Fight LIVE Summit on November 7th at Meta’s headquarters in Chicago. Speaker and sponsorship opportunities are still available!

Nancy A Shenker, senior editor with Street Fight, is a former big brand (Citibank, Mastercard, Reed Exhibitions) marketing strategist and leader. She has been featured in, the New York Times and Forbes.