Online brands are trying a traditional marketing strategy: physical stores
“When you open stores, your business becomes much stronger in that area because people are passing by and can just walk in,” he said, adding that his customer base likes to “smell and touch our offerings and get that experience.” .
Mr Soleimani declined to disclose his rent, but said he had a two-year lease with a five-year stay option. He added that he planned to open stores this year in Chicago, Houston and Miami. He found that some rents had gone down during the pandemic, but those discounts weren’t available in the places he was looking for.
The same goes for Todd Snyder, a menswear designer who launched his eponymous line in 2012. He opened his first store near Madison Square Park in Manhattan in 2016. Rather than a rapid rollout of subsequent stores, however, Mr. Snyder took a deliberate approach, choosing locations with particular appeal. These included a former liquor store in TriBeCa, a century-old building in which he retained the original facilities.
He also opened stores in Rockefeller Center; East Hampton, NY; and Greenwich, Conn. Rents vary, but there are no bargains. On the contrary, he said, the price per square foot is generally “more expensive than it was two years ago.”
Mr. Snyder, whose company is now owned by American Eagle Outfitters, plans to operate 20 stores nationwide, but he does not expect in-store purchases to exceed more than 20% of his revenue.
Some merchants rent their spaces directly, but others have chosen a different approach. On Bleecker Street in Greenwich Village, where Another Tomorrow has its store, several other digital native brands line the streets, including Mack Weldon, Goodlife Clothing and Brooklinen. These companies have relied on Leap, one of several start-ups operating a “retail-as-a-service” model, offering help with store leasing and expansion and collecting data on buyers.
Leap leases locations in clusters and then sublets them to retailers, said Jared Golden, co-founder and co-CEO of Leap. In turn, the brands pay a fee that covers rent, labor and insurance, plus a percentage based on store sales, he said. By the end of 2021, the company had about 50 stores in Arizona, California, Florida, Illinois, New York and Texas.