Warby Parker is coming to suburban malls in America

Bloomberg

Stores are so 20th century. At least that’s what many online brands believed. Companies like Warby Parker, Bonobos and Casper didn’t need physical locations to win over millennials and steal market share; a well-designed website was more than enough. And who could fault their logic? Given the brick-and-mortar carnage across America, the evidence seemed overwhelming.
Then a funny thing happened on the way to the retail apocalypse. Stiffening competition, surging online advertising costs and cheap mall space have prompted these so-called digital natives to embrace what they call “offline” in a big way. In their push to become retail’s next household names they’re venturing beyond the coasts and major cities into suburban America. It’s also an acknowledgement that 90 cents of every retail dollar in the US is still spent at a physical location, and industry watchers don’t expect it to fall below 75 cents until the middle of next decade.
The “clicks-to-bricks” phenomenon encompasses big names like Amazon Books and Casper as well as less-known startups such as men’s shorts purveyor Chubbies and hair color brand Madison Reed. All told, these digital natives now operate more than 600 stores across the country, according to Green Street Advisors, a real
estate research firm.
“What some brands are starting to figure out is, ‘Oh wait, perhaps these retailers who have been around for 100 years were onto something,’” says Jared Blank, a senior vice president at Bluecore, an ad consulting firm. ”You will definitely see more of these insurgents coming into brick and mortar.” Micky Onvural, who runs Bonobos, says mall operators increasingly see the menswear company as an anchor tenant. “They want us there,” she says. If physical outposts were initially exercises in branding and publicity, they’re now core to long-term growth. Retail startups are even starting to include a store opening plan in pitches to venture firms. Many cite the success of a pop-up location to show that they can leverage their online customers and stand out from their online-only competitors.
Everlane founder Michael Preysman, who once proclaimed he’d rather shut down his clothing brand than sign a lease, operates two stores and is considering more. Casper, which popularised the “bed-in-a-box,” has about 20 stores and plans open 10 times as many in the next three years. Warby Parker expects to have 100 stores by the end of this year—giving the optical chain the biggest store fleet among these upstarts.
The stores are popping up in places you’d least expect. Last month, Warby Parker opened a store in a former GameStop next to a Chick-fil-A in Raleigh, North Carolina. In April, the eyewear brand debuted in Alabama. Bonobos, acquired last year by Walmart Inc., recently opened in Lexington, Kentucky, and will soon have more than 60 locations. Real estate firm CBL Properties says one digital native is looking at a property in Laredo, Texas, along the border with Mexico. UntuckIt—which has been selling shirts since 2011—tested a pop-up at the end of 2015 in Manhattan and now has almost four dozen permanent locations, including one in the Mall of America, adjacent to a Crocs store. It wants to hit 150 by the end of 2020.
“A lot of people ask, ‘Why are you opening stores so fast?’” says Chris Riccobono, UntuckIt’s founder. “Well, all of our stores are performing well.”
Here’s another reason: Online advertising is no longer the growth accelerant it was. Buying ads on Google, Facebook and Instagram once made a lot of sense because nascent brands could narrowly target shoppers and grow fast, pleasing their venture capital backers.