News of online retail sales growing to £133bn in 2016 comes as UK store opening figures reach record lows. Despite concerns that these statistics signify the steady decline of bricks and mortar stores, it is predicted that more and more retailers will set up physical stores as showrooms, rather than as selling space.
Consumers will be able to interact with merchandise in person (including to test it and try it on) and make purchases. However, instead of goods being taken home, they will be shipped to consumers.
US online menswear retailer Bonobos was one of the first fashion retailers to adopt the concept. Orders are placed in store and goods are shipped to customers free of charge. Supply chain costs are low as goods travel straight from warehouse to customer, and inventory spend is minimal compared to traditional stores. These cost savings have allowed Bonobos to invest heavily in customer experience and to nurture its brand. In fact, the business was so successful it was recently acquired by Walmart.
Other businesses to have adopted the showroom model include MADE.COM (homeware) and Blue Nile (jewellery).
However, doubt has been cast over the model’s relevance to all retailers, particularly the fast fashion sector, which has different priorities and is more about fulfilling impulse demand. Appetite for the concept has also been questioned by recent consumer surveys, which found that younger customers are much more amenable to it than older ones. Retailers will therefore have to consider whether the showroom is appropriate for their products, customers and territories.