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Flagship stores

Internet giants take over the shopping miles

In recent years, the retail sector has experienced drastic changes. A ruthless battle has taken place among the traditional businesses – between those who have adapted to the new challenges of the internet and those who have not. A symbol of the downfall of physically-present retailers is the last American bookstore chain Barnes & Noble: CEO William Lynch has given up the fight against online mail order companies such as Amazon, Ebay and Alibaba and handed in his resignation in early July.

So why are some exclusively online brands opening flagship stores? While traditional companies invest in online stores and mobile apps, the internet giants are opening physical stores with walls and shelves, in exclusive metropolitan locations.

A typical example is the American online retailer Warby Parker, which offers designer eyewear at unbeatable prices and has enjoying huge success, thanks to a highly innovative online test and shopping system. The brand is currently opening several physical stores in the U.S., which – unlike conventional stores – are more about brand presentation than selling products. The well-located shops resemble traditional libraries – a fitting setting for target customers who like to appear chic and intellectual. Similarly, in the 350 Apple stores, the main aim is to "bind the customers to the brand". This is achieved through service, the ambiance and the product experience. Actual selling, however, takes place mostly via the internet. Online and offline shops are therefore not one in the same, but instead complement each other. The sales take place mainly via the internet and the physical store serves as a kind of showroom. This trend even has its own name: showrooming.

And it's already becoming clear where this is all heading: customers will soon be spending money in the physical stores and then leaving – without the products. Customers will look around and scan the items that appeal to them, using their smartphone. The corresponding products are purchased over the mobile phone and delivered to their home. This way, brands can focus on service and the customer experience and offer a large number of products, without having to worry about the inventory in stores. In this form of hybrid-selling, smartphones act like bridges between offline and online shopping. Ebay is a pioneer in this field, with a number of pop-up stores that have opened in the past year and operate on this principle.

Retail stores will not die out. To survive, they must be converted into places of discovery and exchange, to complement the flagship stores and online trading.