Thinx, the direct-to-consumer “period proof” underwear brand, has opened its first U.S. pop-up store in New York City, with hopes to roll out physical retail stores by 2020. The company, founded in 2014 with $1.5 million in venture capital funding, is using the pop-up as a way to run tests and gather key customer data.
Siobhan Lonergan, chief brand officer at Thinx, says they are dipping their toe into physical retail with the pop-up, which opened in December and will run through February. Given the company’s small scale, “a pop-up store makes sense. We’ve got a lot of testing to do,” Lonergan said. “We need to gather information, like location, foot traffic and customer behavior.”
Through the store, the brand plans to learn about the demographic they are catering to, if it is the location they would want to stick to depending on the kind of people walking by and if they are hitting the target audience. These key insights will shape the brand’s broader retail strategy. “It’s not a science. There’s a lot of trial and error. It’s important for us to understand customer behavior, online and offline,” Lonergan said.
Thinx is not the only DTC brand that has ambitions of physical retail stores as they look to grow. Brands have consistently found that opening physical stores increases their online traffic as well, as also supported by a recent study by the International Council of Shopping Centers. The need for brick-and-mortar presence is clear to the e-commerce brands.
“They can actually increase market share by having a physical presence and an outlet for people to see them,” said Natan Reddy, senior intelligence analyst at CB Insights. “They weren’t direct competitors [to legacy brands] when they were strictly online, but now they are.”
But they’re taking different paths to physical retail. Warby Parker announced it was going to roll out 100 stores last year, and Casper developed a plan for 200 stores across the U.S. over three years. Thinx is taking a more cautious approach. Pop-ups are a less expensive and risky way to test and develop a retail strategy and require far lesser costs and capital to set up.
“Brands often test different forms of store setups, experiences and in-store technology that customers can interact with but also collect data for the brands to learn customer behavior,” Reddy said. “In fact, they’re gaining an edge as they go physical. Digitally native brands are nimble with their commerce and delivery setups. They have also taken on the lead in experiential retail, which consumers can’t get online.”
Thinx is following that playbook. “It’s really important as an e-commerce company to find another way to connect with customers,” Lonergan said. The store currently offers its Cycle Set products and a consultation with a period specialist, along with panels and interactions that are planned.
The rewards with physical stores are clear to the brands as well. In stores, DTC brands also see greater conversion rates than online. Lonergan declined to share specifics but claims that talking to a customer about a product “increases the average order value,” adding that a big reason is being accessible to the customer and letting them experience the product.
Growth into physical retail is also the need of the hour. Right now, e-commerce and physical retail are measured separately, but with physical retailers setting up a robust e-commerce presence, the measurements will soon begin to conflate, according to Reddy.
“All retail is going to be measured and looked at as commerce. You can’t succeed without having both.”
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