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Online shop vs. storefront: What’s the best option for your business?

(Photo credit: PeopleImages, Pinkypills/istock.com)

Internet giant Amazon recently revealed that they have upwards of 65 million Prime members surfing their site for deals. Of those Prime members, 40 per cent spend over $1,000 USD a year on the site. And why not? Amazon makes it easy for anyone uninterested in wearing pants to get basically anything they need delivered to them with record speed.

But despite a crater-sized digital footprint and more online subscriber loyalty than ever, the company is continuing to expand their recent bricks-and-mortar offerings — the latest being their first store in New York.

Convenience versus awareness

Almost half of Canadian online shoppers say they do so for “convenience,” according to PricewaterhouseCoopers’ 2016 Canadian Retail Report. So what are the advantages to setting up shop when you’re always just a click away from your customers?

Dawn Laing has seen the company she works for in both physical and digital iterations — first, an airy retail space in Toronto, and then a full-on switch to e-commerce.

Laing is director of communications for Notion, a product design tool and manufacturing service, and its house brands Nuvango, and GelaSkins. Nuvango, a fashion brand that “collaborates with international artists to create wearable masterpieces,” started out in a downtown Toronto storefront simply because no one yet knew what it was.

Non-traditional awareness campaign

“It felt like the right thing to do to launch a new brand,” says Laing. “When you’re looking at building a brand you have to look at the goals. Why open a brick and mortar? We wanted Toronto to know we were here.”

Laing equates the retail space, open from July 2015 to New Year’s Eve 2016, as a non-traditional awareness campaign, and one that let them get to know their customer base.

As a small business, they were able to solicit data from customers, and apply that feedback quickly and directly to their products. The store also included a free gallery, which played on their product of wearable art, but also provided a community space.

Soon enough, they had an online following, due in part to offering their wares on Shopify. Laing and the company’s founders, Drew Downs and Jamie Pichora, learned that 40 per cent of their customer base hailed from the U.S. The brand had international appeal, and Notion, the core business, was taking off. Suddenly, paying rent was making less and less sense.

Power of the pop-up shop

“We hit our consumer base and we got what we needed,” says Laing. “It was now time to start doing pop-ups. Going where our online audience was telling us they wanted us to come.”

Having the ability to be agile made all the difference for the lifestyle brand. “Brick and mortar locks you down,” says Laing, comparing owning a shop to investing in a cottage you need to visit every weekend, instead of AirBnb’ing your way around the world.

“As an international brand, do we really want to be chained to a location?”

When the option to renew the lease came through, the choice was simple. “The transition to fully online was very easy,” says Laing. Having one foot in the digital door with Shopify and social media made everything smooth. “We walked away from the store and that was it.” And the brand’s seen continued success ever since, especially outside of Canada.

Consequences of going online

There are some negatives to losing a physical space, however. “I personally loved the community connection,” says Laing. And having that space made Nuvango’s roots firmly Torontonian, but now the prices reflected on the site are in USD — since that’s the majority currency used by customers. Nuvango even shut down their .ca site when the store closed its doors.

There’s also something about being able to touch, try on, and feel the items before you purchase, that e-tailers just can’t provide. Online eyewear company Warby Parker, for instance, heard that feedback from customers and opened two Canadian stores in response.

As for Amazon, having unique customer data for each city where they open a new retailer could certainly give them an edge when it comes to reeling in the offline-purchase audience. But does providing easy, online shopping translate to good in-person customer service?

We’ll just have to wait for the online reviews to roll in.