Retail Strategy

DTC Brands Lean Into The Retail Landscape
DTC Brands Lean Into The Retail Landscape 1440 428 ASG

Given the cost of customer acquisition and the increase in competition, DTC brands have shifted their strategy, focusing on experiences where the brand story and consumer connection matter more than just building mailing lists and driving people to buy online. The pandemic helped accelerate that shift – as consumers spent more time at home, DTC brands have had the chance to tap into social conversations and fulfill many emotional and essential needs.


From Ecommerce to Experience

DTCs are using their digital native savviness to put themselves where their customers are – not on a website, but in social media (think: DTC brands like Dr. Squatch on TikTok) and in video games (think: Marc Jacobs in Animal Crossing). More than anything, however, DTCs are beginning to focus on opening physical locations – either standalone or in collaboration with existing stores (think: Bark’s partnership with Walmart).


In-Store Shopping Demand Drives DTC

People are ready to shop again in-store, and DTCs are responding. According to Shopify’s recent Future of Commerce report, 32% of brands said they’d be establishing or expanding their use of pop-up and in-person experiences, 31% plan on establishing or expanding their physical retail footprint, and 40% of brands said offering experiential retail will be a top priority in the next year.

“Increased retail vacancies have created an opportunity for a new wave of digitally native brands to experiment with physical retail. The surge of brands into offline channels means retailers must focus on creating engaging and memorable experiences to win foot traffic.” – Shopify


Standing Out to Stand Alone

On a recent trip to Austin, TX, we visited the premier, open-air retail development, Domain Northside, which has one of the largest DTC physical presences in the US. We visited every single store in the shopping district – legacy retailers’ side-by-side emerging DTC brands. Cover the signage though and we couldn’t have told you who was who or what made them unique. A surprisingly cookie-cutter DTC experience for brands that have notably played hard to cut through the noise online.

“Brand building is helping attract and retain customers. Businesses are overcoming the competition by investing in brand building, which increases customer lifetime value, boosts conversion rates in the short term, and attracts out-of-market buyers in the long term.” – Shopify


The Experience Factor

A physical presence means more than four walls. From the right location to on-brand execution and a memorable experience, the equation takes as much consideration and strategic planning as the day the DTC was born. Missing the mark moving from digital into physical could lead to two unfortunate outcomes:

  1. DTC brands misreading the brick and mortar performance based on a failed execution (proper development of the branding, etc.), and
  2. Developers undervalue the DTC’s capabilities in a physical environment and begin to discount them or pass them over for new opportunities (i.e., they will be left on the bench).

Digitally-native brands making their first foray into physical retail have an opportunity to leverage the customers they’ve nurtured and developed online, and expand their brand awareness to new customers. It’s an exciting time to think about getting physical if you’re a DTC brand.

Back to the DTC Guide

What the Great Wealth Transfer Means for Retail
What the Great Wealth Transfer Means for Retail 1440 428 ASG

The great wealth transfer is underway. It’s a monumental shift of financial power from the Boomer generation, who, by 2030, will all be over the age of 65, to their children and grandchildren (Millennials and Gen Z). Investopedia estimates the great wealth transfer will result in $59 trillion moving to younger generations. Others estimate that number to be more than $70 trillion. With that, it’s considered the “largest redistribution of wealth in human history.” But it’s not just about the money; it’s the combination of money and the power shift (political, social, and economic) that will follow.


Influential Events

Millennials (born 1981-1995) and Gen Z (born 1996-2009) children lived their youth and early adult lives through tumultuous times. From growing up in wartime to living through economic distress to literally coming of age in the midst of a pandemic, the experiences of these generations are significantly different from the Boomers before them. Gen X, born 1966-1980, while older, still experienced some of the same circumstances as Millennials – crushing student debt, housing inaccessibility, etc. Because these generations have not followed the typical Boomer path of going to college, getting a job, buying a house, and having a family at the same ages and stages, their role as consumers have been different from the start. With their expected inherited wealth, we need to begin mapping their trajectory as consumers to be able to meet their needs.


Frugal and Conscientious

When considering how these consumers came to age, brands will need a different approach from what they used with Boomers or Gen X. Younger generations hold a different position on money, which has changed the dynamics within Millennials and Gen Z. In both cases, they’re more frugal, more cautious with their spending, and more intentional about where and with whom they spend their money.


Millennials as Consumers

Millennials are about to have the most money they’ve ever had, but they grew up in the worst economic conditions since the Great Depression. Most Millennials don’t currently own a home, and 18% believe they will always rent. According to Investopedia, despite being the largest generation by population, only 17% of total homeowners are Millennials, and only 42% of Millennials were homeowners at age 30, compared to 48% of Gen X and 51% of Baby Boomers at the same age. This is a notable shift as brands look to consider redefined needs to support the home environments of these consumers.


Reaching the Millennial Consumer

Because of their life experiences, Millennials make spending choices that feel can feel unpredictable at times to retailers. The generation is also quite diverse – a quarter of Millennials speak a language other than English as their primary language, and more than a third are non-white. The same marketing that was so effective on Boomers will not resonate with Millennials. So how do you reach them?

Deliver a Consistent Experience. If there was ever a time to ensure a consistent brand experience between mobile and in-store, this is the generation that demands it. More than 90% of Millennials own and use smartphones; this is the OG digital native generation. They expect instant information, easy access, and consistency across channels. They value trust indicators and appreciate access to real humans. Personality, transparency, and responsiveness are key.

Engage Authentically. Whether you’re writing content for a blog, posting on social media, or advertising, be authentic. As a whole, this generation wants to know you get them, understand their needs, and contribute to improving their lives and life experiences.

Be Where They Are. The greatest opportunity for brand awareness lies within where Millennials spend their time. From binging Netflix to watching YouTube and scrolling social media the online world is a direct avenue to connect with this audience. 

Tap the Influencers. Virtually all Millennials – 97% – read reviews before making a purchasing decision. They’re more likely to trust a brand that has been recommended by another consumer – even a stranger – over trusting the brand itself. Make sure you make your reviews and recommendations are easy to find online. Even when they shop in your stores, which they love to do, they’ll look first online to see what others say about you.

Focus on Lifestyle Choices. Millennials are not moving through stages of life the same way previous generations. Attract Millennials not by focusing on where they are in life, but instead by how they identify socially or through the causes with which they identify.

Be Transparent. Millennials are paying attention, and looking for brands that show – through action – that they care about the same things they do – and they’ll pay more for it. They want to know if you support important causes, make ethical business decisions, and how you incorporate sustainable practices. 


Reaching the Gen Z Consumer

Gen Z was born into a never-ending war that turned into a never-ending pandemic. The youngest Gen Z consumers, who are now in middle school, to the oldest, who are early-career professionals, have shouldered the worst of the education experience and most of the job loss during the pandemic. Reaching them is a complex and difficult mission, as they’d rather save money than spend it. So how do you connect your brand to Gen Z?

Have Purpose Beyond Profit. CSR might be a nice-to-have with older generations; with Gen Z, it’s your lead. Your purpose needs to be something more than profit. Maybe it’s revolutionizing the way you manufacture something so that it protects the planet, or maybe you donate a portion of what you make to a worthy cause, but it’s the “why,” not the “what,” that will turn Gen Z into loyal consumers.

Foster the Entrepreneurial Spirit. Gen Z has no interest in the typical corporate structure, and they don’t believe in the kind of job security they’ve never seen. That may explain why 72% of teens want to start their own businesses. Showcase your own entrepreneurial spirit and innovation to attract them – and demonstrate your care for your employees.

Engage Authentically. Like Millennials, Gen Z has no time for canned responses or generic marketing. They want authentic engagement and interaction that feels personal. These are purposeful consumers, not accumulators.

Don’t Waste Time. Gen Z is the TikTok generation. They want small, consumable pieces of content, and that translates to marketing, too. What can you do to get their attention in 8 seconds or less? Because that’s all the time you have. According to Kantar, 83% of consumers browsing TikTok say seeing trending content has inspired them to make a purchase.

Be a Brand They Can Believe In. For Gen Z, consumption for consumption’s sake is offensive. Conservation, sustainability, and respecting privacy are extremely important. “When I think “cool” I imagine companies that do great things for customers/employees or beautiful/unusual products.” – Female, 17, UT, Urban

Emphasize Experience. Gen Z seek out meaningful and memorable experiences, not just products. They have a “you only live once” attitude in which they will prioritize fun over sacrifice.

Be Impeccable with Your Brand. Gen Z has a high standard for what they want their personal future to hold. Brands with purpose win in the long run, and we’ve seen the power of consumer resiliency.

Most brands are accustomed to equating spending to the Boomers, who currently control over 60% of the money in this country. As the great wealth transfer begins in earnest, the entire shift and mentality of the receivers will be unlike anything we are familiar with. This shift represents invaluable opportunities for companies to listen and pay attention.

Eager for more insights about retail? Check out how some retailers are Minding the Retail Gap between pandemic and high performance.

Redefining Flagship Retail
Redefining Flagship Retail 1440 428 ASG

Flagship retail stores have historically been the beacon of a brand—an iconic entity with grandiose energy. But as we continue to rethink retail in today’s ever-changing and quickly evolving environment, it presents the opportunity to reevaluate the flagship experience and our approach to store design.

If you think about the essence of a flagship store, it has meant something larger-than-life, experiential, immersive, or even exclusive. Often, we relate this to store sizes like Krispy Kreme in Times Square, Hermès in Paris, Nike in New York, or the glass cube at Apple Fifth Avenue. When you strip away the square footage, it really implies a “special experience,” either with an exclusive, localized product (The Big Apple Doughnut), personalized service, or unique offerings associated with geography. So, if we can let go of this perception of flagship relating primarily to size and connect it more to the unique experience – then we get to the heart of what flagship retail means.


From High Streets to Side Streets

Retail succeeds when it responds to consumer needs, and today’s consumers want to stay closer to home when they shop. They want to be catered to and want anything but homogeny. Gone are the days of being inside any mall in America and finding the same set of stores. Consumers want something that reflects the energy of their neighborhood.

“Consumers want and crave variety, diversity, and choice. You can maintain a national footprint and effectively leverage regional and localized design. Bringing these strategies to scale can be a differentiator for retailers who want to thrive, not just survive.”
– Carrie Barclay, President, ASG

The importance of diverging from homogenized retail is one of the key factors in retail design success today. Consumers have gained a new appreciation of home since the start of the pandemic. Similarly, when retailers begin to understand their own unique importance in the local community, they then become part of the social fabric of the community.


Embracing the Flagship Experience at Scale

Now is the time to refocus the meaning of flagship retail to symbolize a unique and localized experience for the consumer. In other words, we believe that the flagship experience shouldn’t be limited to just the launch of a design as it appears in Times Square, but it can also be a thoughtful, customized, and unique design in every neighborhood.

Your brick-and-mortar locations are not just transactional. They are valuable opportunities to connect with your customers and showcase your brand, values, and commitment. Every store design is an opportunity to provide local customers with an integrated, immersive, and unique experience with your brand.

Eager for more insights about the retail experience? Check out how some retailers are Minding the Retail Gap between pandemic and high performance.

Transforming Retail Fulfillment
Transforming Retail Fulfillment 1440 428 ASG

The menace of ecommerce giants, such as Amazon, has been looming over brick-and-mortar stores for several years now. However, the threat is not as real as brick-and-mortar retailers are led to believe. Amazon capitalized on a functioning business model, and consumers are in love with convenient shopping and fast shipping. However, brick-and-mortar retail is capable of many strategies that the ecommerce industry is desperate to tap into.


Brick-and-mortar retail is dead? Hardly.

Consumers still love to browse in store, explore assorted products, and feel items in their hands before purchasing. The biggest challenge that brick-and-mortar retailers face is being able to maximize the value of the retail location. What can your store offer beyond that which can be purchased online? Consumers demand instant gratification, but what that looks like varies from shopper to shopper, and even moment to moment. Physical stores are an essential piece of an omnichannel strategy, and the ability to offer diverse product choices and delivery preferences will change how retailers do business.


Change the supply chain.

The traditional model ignores the crucial connection between the manufacturer and the retailer. Until recently, retail fulfillment has been a component of purchasing that remains rather independent. However, this reliance on drop-shipping is how consumers are lost. Colors and sizes vary depending on location, and without consolidating distribution channels, mistakes are common. Consumers want to be able to order online and pick up in store, because in-store delivery for certain items may be days faster. Others see items in stores, but an in-store app or kiosk may offer a more desirable color that can be shipped to homes. Fulfillment within brick-and-mortar retail demands collaboration to meet the changing demands of consumers.


Leverage real-time inventory

The most important aspect of retail fulfillment and required collaboration is a real-time inventory. Business associates and consumers should easily be able to track shipped items, as well as notify a customer if an item they are interested in is truly available. Even ecommerce giants have struggled with issues such as requested items on backorder and websites not updated at the time of purchase. This results in frustrated customers and incomplete orders. Over time the overall brand can be damaged.  Be mindful of your inventory movement and shipping and invest in a digital infrastructure that will allow your omnichannel strategy to flourish.

The key is to create a seamless and consistent customer experience that not only improves efficiency but also meets demands. The customer experience, not the product, is the most important factor. How you fulfill your promise to the consumer relies on more than just shipping, which is why brick-and-mortar retail is far from dead.

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