DEATH OF PUREPLAY RETAIL

INTELLIGENCE REPORT DEATH OF PUREPLAY RETAIL RETURN ON INVESTMENT

Stores in the Black Traditional retailers with strong omnichannel strategies per L2’s scoring methodology (“leaders”) were more likely than their “laggard” counterparts to see positive same-stores sales growth in 2015, as their investments have resulted in more efficient store spaces. 54 Evolved retailers have also been rewarded for their omnichannel capabilities, particularly Warby Parker and Bonobos. Both retailers made headlines in 2014, after announcing that their stores were collectively turning a profit. 55 Warby Parker’s success has been well documented—in November 2014, the retailer reported $3,000 annual store sales per square foot, second only to industry leader Apple. 56

Death of Pureplay Retail: Same-Store Sales YoY Growth Percentage of Brands, Leaders vs. Laggards 2014—2015, n=19 ■ Positive YoY Same Store Sales ■ Negative YoY Same Store Sales

89%

50%

50%

11%

Leaders Scored in Top 40% for Omnichannel Sophistication

Laggards Scored in Bottom 40% for Omnichannel Sophistication

Source: L2 Intelligence Report: Omnichannel Retail, July 2015.

Death of Pureplay Retail: Annual Store Sales Per Square Foot November 2014 ■ Omnichannel Retailer ■ Evolved Pureplay Retailer

Warby Parker $3,000

Apple $4,568

Tiffany & Co. $2,953

Best Buy $1,192

Ralph Lauren $1,061

Tumi $981

54. L2 Intelligence Report: Omnichannel Retail July 2015. 55. “ Bonobos raises another $55 million and aims for an IPO, all ‘in spite of being ecommerce’ ,” Pando, July 6, 2014. 56. “ Warby Parker Adds Storefronts to Its Sales Strategy ,” Wall Street Journal, November 17, 2014.

Source: “ Warby Parker Adds Storefronts to Its Sales Strategy ,”Wall Street Journal, November 17, 2014.

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January 12, 2016