Why local e-commerce operations are moving into streetfront locations

Indochino | BCBusiness
A look inside Indochino.

Why brands like Indochino are taking it to the streets

When Vancouver’s Kyle Vucko expanded Indochino, his custom-suit business, from an online operation to four physical shops last fall, it was a natural evolution. Since founding the business in 2007, he had progressed from pop-up travelling tailor stores to a showroom in Indochino’s Yaletown office before opening the stand-alone stores.

“What we’ve seen, particularly in apparel, is there is a group of guys who love shopping online, but there’s also a group of people who love buying in person,” says Vucko. “And also just connecting with the community. We’ll hold speaking events down the road so this will become a hub for menswear.”

Showrooming: Checking out products in-store but purchasing online
Canadians who showroomed in 2013: 63%

Webrooming: Researching online but purchasing in-store
Canadians who webroomed in 2013: 74%

(Accenture survey, September 2013)

Vucko’s stores stock samples but no inventory. Customers book appointments to be measured and consult a stylist before using Indochino’s Style Guide app and a touch screen to select garment details as they would on the website. The finished suit is shipped to the store or the customer’s home. U.S. online menswear retailer Bonobos follows a similar concept with its 10 Guideshops.

Indochino—which now has 120,000 customers in 140 countries and plans to open more stores in 2015—is one of several online retailers to have gravitated offline. U.S. womenswear retailers JustFab and Gap’s Piperlime have opened flagship stores; Montreal’s Frank & Oak has menswear stores there, in Toronto and Vancouver; and Vancouver’s Coastal Contacts, which started out selling eyewear online under the name ClearlyContacts.ca, has two Vancouver storefronts and one in Toronto. Even e-commerce giant Amazon set up kiosks in certain malls during the Christmas shopping season, with rumours that it may soon open a New York storefront.

For Coastal Contacts, the reason for taking things offline was simple: they needed a way to better understand their customers. “One of the challenges for e-commerce companies is that there are no face-to-face interactions, and the stores gave us a chance to see, talk to and understand our customers to further develop and improve our online offering,” says the company’s chief marketing officer, Braden Hoeppner. The stores showcase a curated collection of eyeglasses and sunglasses but also have stations where customers can order from the website for shipping to their home or to the store for pick-up.

According to a 2014 report from Deloitte and the Retail Council of Canada, “Retailers with a solely online business face hurdles in providing a strong product experience, as consumers are unable to personally interact with their products. Over the past few years, curated offerings at independently owned stores have provided a new shopping experience—that of a gathering space in a destination neighbourhood.”

Still, not every online retailer will see the benefit of investing in a storefront. “It’s an entirely different environment, so the successful online retailers that have invested in brick-and-mortar have done so realizing that it’s a very special and very detail-oriented space,” says Mark Startup, vice-president of the Retail Council. “In today’s world, with all the competition that’s out there, they need to do it well.”