Retail Expert: Why Online Brands Are Expanding Into Brick-and-Mortar

More and more online retailers are also opening physical locations to serve their customers. And there are many benefits to this, according to Anjee Solanki, National Retail Director for the U.S. at Colliers. In an interview on Motley Fool Live, recorded on June 23, Solanki tells Motley Fool contributor Rachel Warren how brick-and-mortar locations are helping traditionally online retailers thrive.

Rachel Warren: Do you see specific sectors of retail is having an advantage here in this transitioning from virtual into brick-and-mortar or is there really opportunity here for all?

Anjee Solanki: Well, there's definitely opportunity for all. But again, if you could actually have a online presence, a physical presence, what you're doing is you should be seeing a nice increase in sales. One is you should be driving revenue. Yes, there are additional costs associated because online, you're not dealing with supply chain [laughs] issues per se in terms of build-out, fit-out design, the cost of paying rent, occupancy costs, labor costs, etc. Yes, you may think the margins are significantly stronger and better, but if you're increasing your volume, then you're going to increase that revenue, so your margin should see a nice uptick. Now, with the brick-and-mortar, what you're also providing is you're actually using that space or venue, as I like to look at this space, as a form to really solicit feedback. If you're online, and there was a shoe brand that was online and I got an opportunity to meet the founder just a few years back and it was just so delightful to just learn about her business and why she did what she calls accidentally pivot into brick-and-mortar, is she created an office space, which was really a retail storefront. With that, her team said we have all the space, we have this beautiful storefront, it's on a very dynamic retail corridor, tons of foot traffic of shoppers, why not open up a shop? So they did, not knowing where it would take them. What it actually encouraged is based on an increase of their online shoppers actually shop in the store. They thought they'd see a surge of new shoppers, but it was their existing shoppers who said thank you for opening a store, I wanted to come in, I wanted to talk to you about the look and feel of the shoe and could you consider maybe changing the bottom portion of it, making it more outdoor friendly, etc. They solicited all this feedback. They used the space in this example as basically an incubator to solicit customer feedback, and organically, they were able to then create a completely new line as it relates to their product. Those are the big benefits, it's that we're all human, there are times where I really don't want to speak to [laughs] anyone, I just want to shop quietly. There are moments where I want to understand and learn to be educated around the brand, because a lot of the screen time can't ... we want to be with people ultimately.