We often look at purchasing options with a two-dimensional focus: either the physical, brick and mortar stores or the online, e-tailer. As consumer demand has changed, many brands have moved to strategies that include both physical and online stores.
It appears a new trend is rising, though – while traditional brick and mortar are moving online, e-tailers are deciding between brick and mortar locations versus “guideshops.” Guideshops are essentially a version of a showrooming approach allowing consumers to touch, feel and try on the product before ordering an item to be delivered to their homes - there are no physical items sold in the stores. RetailWire’s article titled, Guideshops offer e-tailers a different brick and mortar future, highlights how Bonobos, a popular menswear e-tailer, has chosen to lead the charge when it comes to guideshops.
It’s an interesting dilemma for online businesses looking to expand into physical space. Below I have highlighted a few pros and cons to the guideshop retailer approach.
1) No Inventory = More Money – Overhead on in-store inventory instantly becomes non-existent which allows you to invest in other areas including offering additional product selection and more luxurious products.
2) Fulfillment Becomes Fun – Inventory management and fulfillment strategy becomes that much simpler too. Rather than worrying about stock in-store, it’s all aligned with your online fulfillment strategy. By allowing your customers to try on product before ordering, you decrease the rate of return as well.
3) The Experience Profit Factor – Customers tend to spend more in-store than online. A huge reason for this is online lacks in experience. By having the customers in-store you open them up to more sensory stimulation and a greater, more personalized experience.
4) More Room for the ‘Man-Cave’ Features – If you’ve ever worked in merchandising you know that having shelves upon shelves and rows upon rows of items in every size and color can quickly become an OCD nightmare. Multiple pieces of the same items leave little room for the comfy chairs and comfortable, unique experience.
5) Exclusive Customer Service – It’s powerful to interact with your customers. By saving money on inventory, it frees up cash to invest in your people! Your people represent your brand and create the opportunity for your customers to feel that rock-star exclusivity and personalized shopping experience.
1) Leave Literally Every Customer Empty Handed – There’s still something to be said for the instant gratification and walking out of the store with that “Pretty Woman” feeling, hands full of branded shopping bags. Perhaps I need something to wear that day – you’ve just excluded yourself as an option. Customers who may have walked unknowingly into your store are even more disappointed with their lack of findings.
2) Lower Cost Business Model Means More Startups - Market saturation could easily become a next step as the risk to business becomes lower and lower. It’s easy to look at a company like Bonobos or Birchbox and think “Hey, I could easily do something like that!”.
3) Showrooming Them Right Out the Door to Your Competition – Perhaps you have control of your brand and exclusive product offerings, but what if consumers can get your item anywhere? I could potentially visit your guideshop to experience the product and then walk out the door while ordering from Amazon on my mobile device with free shipping at a lower cost. If your store is being used as a showroom you need to be sure it’s your goods that end up being purchased.
4) Consumer E-Quality – Consumers still have a lack of trust when it comes to ordering online or having an item shipped to their home. There is skepticism the product just won’t look as good, won’t be the same quality or a different color may not be what they had hoped. There is an uphill battle in convincing your customers to take a chance on your quality.
5) Guideshop Germaphobes – With a guideshop there is just automatically the assumption the item has been handled a whole lot more than items in a traditional store. It’s not the one-off item the customer is taking home with them and has likely never been tried on before – it’s more like the spare socks out of the drawer at the shoe store. Cringe.
What do you think? Are guideshops the future or do brick and mortar stores still provide the building blocks for success? Comment below!