Section Insights
Balancing Digital and Physical Retail
How does the brand balance its digital and physical presence?
The brand operates as both a storyteller and a retailer, with a focus on maintaining a balance between digital and physical sales. The speaker feels compelled to open more physical locations as the digital side grows, adhering to a threshold for the proportion of sales from each channel.
- The brand sees itself as a mix of storytelling and retailing.
- There is a strategic threshold for digital versus physical sales.
- Growth in digital sales influences the decision to expand physical locations.
The Importance of Physical Experience
Why does the brand prioritize physical retail over digital sales?
The speaker believes that the physical shopping experience is superior and essential for customer engagement. They intentionally limit digital sales to preserve the tactile experience that physical stores provide.
- The brand values the tactile experience of shopping in-store.
- There is a conscious decision to prioritize physical retail over maximizing online sales.
- Customer experience is central to the brand's strategy.
Revenue Growth and Experience Control
Is the brand sacrificing revenue for physical presence?
The speaker clarifies that they are not sacrificing revenue, as online sales continue to grow. They aim for a balanced growth rate between digital and physical sales, maintaining a 50/50 split.
- Online revenue is on an upward trajectory.
- The brand aims for equal growth in both digital and physical channels.
- Maintaining control over the customer experience is a priority.
Creating Demand Through Limited Availability
Could limiting online sales create demand for physical stores?
The discussion suggests that temporarily closing online sales could generate demand, similar to strategies used by brands like Supreme. The speaker acknowledges that online sales data informs decisions about physical store expansion.
- Limiting online availability can create a sense of urgency and demand.
- Sales data from online channels influences physical store strategy.
- The brand is open to innovative approaches to drive foot traffic.
Expanding Physical Presence
Why is the brand expanding its physical locations?
The brand is planning to open new locations in cities like San Francisco and DC to provide fans with the full experience of the brand. The speaker feels a responsibility to offer a comprehensive experience beyond just digital interactions.
- Expansion into new cities is part of a strategy to enhance customer experience.
- The brand recognizes the need for physical engagement with its audience.
- Providing a full brand experience is a key responsibility of the company.
Transcript
0:00 I feel like we're 50% storytellers and then 50% retailers, but on the retail side, that's then broken up to what we do digitally versus what we do physically. And as the business starts to skew more digital, I feel forced to open more physical. And that's how the brand grew cuz I have a number there's a threshold where I won't allow the percentage of the total pie to go over an X amount on the website for the web revenue.
0:29 >> Why? >> I don't want to become a digital brand. The touch point, the touch and feel. >> So, you're purposely foregoing more sales. This goes back to the love and not how the conversation started. It's like you can't work for this money. You're purposely foregoing more sales because you have to be a physical and that's a better experience for the person. So, if I order something from kith.com, right? As opposed to going in your stores.
0:53 >> Yes. >> It's like way better experience that you control the whole story and the whole experience. >> controlling we're controlling from the website down. And actually, no, you're that's that's not true. I'm not foregoing revenue cuz the website revenue continues to grow and it's on its path, but I always wanted to be half digital and half physical. So, I want the physical to grow at the same rate is what I'm saying. >> Okay. >> Does that make sense?
1:17 >> So, yeah, it's not like okay, wait, we're at 50% like >> Stop make stop selling product on the internet. >> >> No, wait a minute. Kind of Actually, that might be a good idea. It's like sorry, the website's closed for a few days. >> Right. >> You got to come back. >> By the way, there are some brands that do that and then create demand because they go away for a little bit. You know, >> >> Supreme does that in their off seasons, which I think is really smart.
1:36 >> So, wait, are you using the the sales online as a as a as a sign that hey, I need to increase the amount of physical foot per the the amount of physical stores I have in the real world? >> Yes. >> Okay. >> I think the growth that we've had >> >> is has been substantial. You know, as we're planning on opening now, the news is out. We're opening in San Fran. We're opening in DC. And we have the data of how many people are shopping online like I mentioned before.
1:59 Those people need the experience, the physical experience of the brand. They can't only have a digital experience if they're a fan of the brand. I feel like I owe that to them. I have the responsibility of giving them the full experience for the company, you know, for what the company can offer at least.
Summary
- The brand operates as both storytellers and retailers, with a focus on balancing digital and physical sales.
- The speaker intentionally limits online revenue to ensure a strong physical retail presence.
- They believe that a physical store provides a better customer experience than online shopping.
- The growth of online sales is not seen as a reason to neglect physical stores; rather, both should grow in tandem.
- The speaker feels a responsibility to offer customers a full brand experience, which includes physical interactions.
- Upcoming store openings in San Francisco and Washington, D.C. are part of this strategy to enhance the physical presence.
- The idea of temporarily closing online sales to create demand is mentioned as a tactic used by some brands.
Questions Answered
How does the brand balance its digital and physical presence?
The brand operates as both a storyteller and a retailer, with a focus on maintaining a balance between digital and physical sales. The speaker feels compelled to open more physical locations as the digital side grows, adhering to a threshold for the proportion of sales from each channel.
Why does the brand prioritize physical retail over digital sales?
The speaker believes that the physical shopping experience is superior and essential for customer engagement. They intentionally limit digital sales to preserve the tactile experience that physical stores provide.
Is the brand sacrificing revenue for physical presence?
The speaker clarifies that they are not sacrificing revenue, as online sales continue to grow. They aim for a balanced growth rate between digital and physical sales, maintaining a 50/50 split.
Could limiting online sales create demand for physical stores?
The discussion suggests that temporarily closing online sales could generate demand, similar to strategies used by brands like Supreme. The speaker acknowledges that online sales data informs decisions about physical store expansion.
Why is the brand expanding its physical locations?
The brand is planning to open new locations in cities like San Francisco and DC to provide fans with the full experience of the brand. The speaker feels a responsibility to offer a comprehensive experience beyond just digital interactions.