Business E-Commerce

E-tailers Oblige Customers Who Want to Handle the Merchandise

E-commerce stalwarts are beginning to see the virtues of opening brick-and-mortar retail stores. Andy Dunn, CEO of formerly online-only apparel company Bonobos, told The New York Times that he was losing about half of his would-be customers because they wanted to touch the merchandise before making a purchase. So in 2012 his company opened six retail stores, where the average transaction is double the average online transaction, according to Dunn. Piperlime, Gap’s online spinoff, and Warby Parker, an eyeglass company, are opening stores too, and EBay and Etsy are trying out temporary stores. These retailers are not abandoning lessons learned through their online operations: they tend to carry less inventory and employ fewer staff members, treating their new locations more like showrooms than traditional retail outlets. Electric carmaker Tesla employs a variation of this model, exhibiting its cars in “galleries” but selling them exclusively online.

This migration to physical stores, however, shouldn’t be mistaken for a reversal of e-commerce trends. Major retailers and payment companies continue to contemplate ways to hybridize online and offline shopping experiences. Executives from American Express, PayPal, and Walmart discussed their positive outlooks on the topic in the “Shopping Outside the Box” session at November’s Techonomy 2012 conference.