DEATH OF PUREPLAY RETAIL

INTELLIGENCE REPORT DEATH OF PUREPLAY RETAIL RETURN ON INVESTMENT

Stores in the Black (Cont’d) Bonobos has also seen clear returns on its store investments. Since opening its first guideshops, the evolved retailer has cut online marketing spend from over 25 percent to under 4 percent of net sales, 57 relying more heavily on the halo effect of retail to generate awareness. In-store average order values are more than double that of online 58 and a higher proportion of new customers are acquired in guideshops than on the company’s website. 59 Fueled by this success, both brands have begun to scale their physical footprint outside of test markets and across the broader U.S.

Death of Pureplay Retail: Bonobos Guideshops & Warby Parker Stores ■ Bonobos Location ■ Warby Parker Location

Source: Bonobos.com , 2015. | WarbyParker.com , 2015.

“We quickly realized that while we were seeing all the benefits we expected from branding and marketing—the ‘halo’ effect of having a store open—stores could be a meaningful driver of sales and profitability, which was really unexpected.” Dave Gilboa -Warby Parker Co-Founder and Co-CEO

57. “ After 8 years and $128 million raised, the clock is ticking for men’s retailer Bonobos ,” Business Insider, October 6,2015. 58. “ Bonobos raises another $55 million and aims for an IPO, all ‘in spite of being ecommerce’ ,” Pando, July 6, 2014. 59. “ Why a store you’ve likely never heard of hints at retail’s future ,” Forbes, July 8, 2015.

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

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January 12, 2016