NEW YORK — In today’s economy, old ideas about technology are changing at breakneck speed. Just a few short years ago, conventional wisdom said the best avenue to Web sales was through brick-and-mortar locations. The formula for independent footwear retailers seemed simple enough: Open a store in a desirable location, garner a local following, launch a Website and, eventually, an e-commerce store.
Now, a slew of retailers are challenging that model by establishing themselves as e-tailers first, and then opening traditional retail outlets. There’s no question it can be a tough transition from the virtual realm to main street, but in both cases, the dollars are very real and opportunities abound. Here, three retailers discuss their decisions to open brick-and-mortar shops after finding success online.
In the wake of the dotcom crash of the late 1990s, Greg Selkoe defied the logic of the day and founded online streetwear store Karmaloop.com out of his parents’ basement. But Selkoe’s new venture wasn’t exactly met with enthusiasm.
“There was a huge risk involved,” said Dennis Todisco, Karmaloop’s director of grassroots marketing. “At trade shows, vendors were very hesitant to put their brand on the Internet.”
Still, Selkoe soldiered on and wooed both customers and vendors. Even the site itself, which now sells apparel, watches, accessories and footwear from brands including Adidas, Creative Recreation and Jeffrey Campbell, has developed its own online culture, with brand extensions such as Karmaloop TV, an online channel featuring original content about fashion, art and music that launched in 2008.
But in 2005, based on the success of the site, the company decided to open a brick-and-mortar store on Newbury Street in its hometown of Boston. According to Todisco, the brand was missing a place where people could “come together.”
“We wanted to give a face to Karmaloop and give people another dimension of the brand because we really focus on being more than just a store,” said Todisco. “We’re a cultural hub.” To that point, the store is primarily a place to host company events, brand launches, parties for limited-edition styles and celebrity meet-and-greets.
Location: Washington, D.C.
For Kassie Rempel, owner of Simply Soles in Washington, D.C., the opening of her brick-and-mortar store in November 2008 grew out of customer demand from the online store and catalog business she launched in four years earlier.
“The local customers really demanded it,” said Rempel. “They wanted to see the people ‘behind the curtain,’ and we wanted to have the opportunity to meet them, as well. I had a few private events at my house for our customers, but with two small kids, it was just getting harder and harder to host.”
While looking for a warehouse space to house inventory, Rempel found a desirable commercial spot on Park Road. “The retail component for me was an off-shoot of my needing additional warehouse space, as well as a space where people could visit us,” she said.
The store stocks high-end brands such as Tory Burch and Bettye Muller, and her private label, Lillybee. And while she doesn’t feel all online retailers need a physical location, for Rempel, the retail format has helped to cement relationships with local customers. “Our customers like attending the special events. It’s like a showroom and an event space. Right now we’re doing an in-store ‘meet the designers’ series featuring a new designer each month,” she said, adding that Bettye Muller has signed on.
Though retail store sales do not yet represent a significant percentage of overall sales, and staffing has proved to be a challenge, Rempel said she feels the store could be lucrative over time and has thought about opening other locations. “We have thousands of customers in certain areas, so the retail store could be another option for our existing customers.”
Karen Williamson launched her Web business in 2005 with her daughter Tess Russell and quickly realized that a brick-and-mortar store was a necessity for her niche market: large sizes and widths.
“By fall ’05, we realized we needed a physical location because local customers wanted to try on the shoes, and some designers prefer that you have a brick-and-mortar location,” said Williamson. Originally opening in a mall, Williamson later moved to a freestanding location to make the store a destination spot. “What was happening in the old space was that customers wanted us to start stocking smaller sizes because we had walk-in customers coming in all the time — not the niche shopper we were after,” she said.
Williamson said the Web business still outweighs the physical store’s sales, thanks to its international reach, but she often tries to give Web customers the in-store experience. “When it comes to shoe customers, they need to be able to try the product on. We try to duplicate that experience online by sending extra sizes to people for their convenience.”
Based on her success, Williamson urges all online shoe shops to open brick-and-mortar stores if they have the financial backing.
“Customers aren’t able to feel and see the shoes the same way they can in a store,” she said. “And it really helps to talk to the customers who can let us know if something runs big or small.”
Williamson said when the economy improves she may roll out additional locations.
“We think about expanding all the time,” she said. “I hope to have a store in New York or London because a lot of our customers are there, but the only thing stopping us right now is the economy.”