After writing about direct to consumer storefronts, I had a realization. This idea is not that different from a department store, which is the traditional channel for small brands to reach a large audience. One large store of shared costs gave brands a cheaper way to have a physical presence. On top of that, it gave buyers a one-stop, convenient buying experience.
Today, the Internet is the most convenient place to shop. This innovation has spurred the slow death of traditional department stores. It’s still playing out and these companies need to rethink their model to survive.
A direct to consumer storefront is similar to a traditional department store but focuses on the pain points of an Internet-first buying experience. There is no need for inventory or actual sales. It would only serve these functions:
- Discovery (learn about product and brand)
- Fulfillment (e.g. try on to know proper size)
The kicker is in the returns. Buy online and return in-store is proving to be the preference of consumers. It’s convenient and often times less of a hassle than a return shipment. Retailers also like it because it brings people in the door.
Creating a store following this strategy could easily be done by an existing department store or a new entrant. Some new players appear to be trying part of this concept. Just as easily, someone like Nordstrom could set up partnerships with 50 D2C brands and dominate. It will be a interesting to see what happens.