What kind of retailer is best for trying the showroom?

Bonobos is a very popular and emerging menswear brand in the United States that is changing the way people shop. The revenue in 2016 is as high as $100 million. Founded in 2007, Bonobos initially wanted to be a pure e-commerce business, but now has more than 20 physical stores in multiple cities, including first-tier cities such as Chicago and New York. More appropriate, more than 20 showrooms ( It means a showroom and a showroom.)

Retail industry

Bonobos website

Today, Wal-Mart is talking about the acquisition of Bonobos. It is said that the acquisition amount will be as high as 300 million US dollars, and it is Bonobos' special showroom mode that attracts Wal-Mart. Once the acquisition is successful, Bonobos will become Wal-Mart's effective player in the fight against Amazon's online apparel sales.

The word Showroom itself is not new. It often appears in the fashion industry: during the fashion week, designer brands with market potential will be stationed in various third-party showrooms, and their fashion works will be hung on hangers for each Buyers of boutique department stores or collection stores evaluate their design language, fabric use and wearability, and sign orders with designer brands.

In the past one or two years, when the efficiency of traditional offline stores is too low, the operating costs are expensive, and the reach is limited. When the e-commerce can not completely solve the consumer experience under the current technical conditions, the showroom mode is gradually The United States is popular. However, the new showroom and the traditional fashion week show different, more is a means of business to help the brand improve efficiency. In addition to Wal-Mart, Tesla, Amazon, casual yoga apparel brand Lulu lemon have all shown interest in the showroom mode.

Retail industry

The showroom staff is fitting clothes for the customers.

a model of online and offline integration

According to the World Apparel and Footwear Network, the current Bonobos that Wal-Mart looks at is a male of 18-40 years old. Since 2012, Bonobos, which originally took the pure e-commerce route, has opened its first showroom. They call it the "guide shop." Here, whether you are a random shopper or a customer who has an appointment online, you can try on your favorite T-shirt jeans or business suit while drinking beer or other beverages. At the same time, the clerk named "Ninja" will provide customers with a variety of services, including body measurements, and recommend appropriate clothing and collocation. Once the dress is satisfied, the customer can place an order. There is no inventory in the showroom, and all the goods are sent from the central warehouse and sent to the customer's home.

Retail industry

Bonobos Shopping Mall

This is an interesting online and offline fusion mode. Andob Dunn, founder of Bonobos, once worked at Abercrobie & Fitch, where he was responsible for stacking clothes. This work experience made him realize that compared with women, men don't like to go shopping, and they don't care if they can get the goods in the store immediately and take them home. At first, Dunn thought that the physical store would disappear, and the Bonobos he built was also a pure e-commerce brand. However, he realized the pain point of the pure e-commerce brand - he couldn't try it on, so he decided to put the e-commerce and physical stores. The patterns are combined, so today there is the showroom mode of Bonobos today.

PricewaterhouseCoopers (PWC)'s latest "2017 Retail Trends Report" analyzes Bonobos's showroom model and believes that it has all the advantages of high-end, high-touch physical retail, customers can try on, get professional recommendations, but with entities Compared to retail, Bonobos has fewer clerk and therefore lower costs. In addition, after the customer places the order for the first time, the system has their relevant data, such as wearing a few clothes and what style of clothes they like. After that, the customer no longer needs the help of the clerk, and can place an order online. . The data shows that most of Bonobos' transactions are online and customers do it themselves. This shows that the showroom mode makes customers more loyal, and at the same time, because of the trial wear, the return rate is lower.

Retail industry

The inventory of the showroom mode is much smaller than the traditional clothing store.

However, the biggest cost saving is zero inventory. In the case of denim, Bonobos' showrooms only need 220 samples to cover all the different sizes and styles, while traditional brick-and-mortar stores often require up to 3,600 inventories – just a denim. Because of zero inventory, Bonobos also eliminates inventory-related infrastructure costs, such as supply chains and professional inventory counting systems. When the customer needs to place an order, the "Ninja" clerk in the Bonobos store will help the customer to complete the online shopping process with the iPad. After that, the customer wants to purchase again, as long as they shop online at home. And this model also avoids the risk of online shoppers changing their minds and abandoning purchases.


Why is the showroom model a "red-hot chicken" in the US retail industry?

More and more retailers are beginning to realize that whether you start online or offline, looking for a way to let consumers experience the goods and enjoy the convenience of purchase is the king of the retail industry. The traditional offline stores are too inefficient, the operating costs are expensive, and the reach is limited; e-commerce can not completely solve the consumer experience under the current technical conditions. The showroom seems to be able to bridge this service gap.

Andres Mendo Sapena, a partner in the management consulting firm Kearney Global Retail Strategy, summed up the idea of ​​the showroom as a syllogism: online knowledge of goods - offline experience - online payment. He believes that consumers prefer to research products online and complete payments, but two-thirds of people still go to the physical store before and after the purchase to see what their favorite products are. Therefore, “showroom is another step that better meets the needs of consumers,” said Mendo Sapena. Brands can make consumers curious about a certain product through the Internet, and then let them get the most exciting real experience in the online store. The consumer then orders online and then goes home to wait for delivery.

Tesla, Amazon, casual yoga apparel brand Lulu Lemon have tried the showroom. Matt Sargent, vice president of retail operations at Margid, a consulting firm, believes Amazon's bookstore is a showroom model for its proprietary electronics. When launching the voice assistant Alexa, Amazon lets consumers who visit their bookstores try the product themselves and then place an order online. Lulu Lemon uses the showroom to test the water before entering the market, allowing consumers to follow the yoga masters or lifestyle opinion leaders and experience the feeling of wearing casual yoga pants.

Bonbell's angel investor, Wharton professor David Bell, believes that the concept of the showroom is especially important for future retail sales. Earlier in an interview with reporters, he summed up the benefits of this model: it does not cost too much rent, consumers can only do not buy here, ideally can achieve zero inventory. It is also a representative of the experience economy, and the emphasis on experience is an important difference between millennials and previous generations. Consumer experience research firm WD Partners surveyed 2,500 consumers, and the form of showroom can increase the number of people who have a willingness to buy by 5%, but it can increase by 15% for millennials.

Not all retailers are suitable for the showroom mode, such as Zara

However, just as a Manhattan store manager said, although Bonobos is currently a great success, its showroom model may not be suitable for women's wear, because female customers' requirements for style, color and size are more complicated and subtle.

So, what kind of retailer is best for trying the showroom?

PricewaterhouseCoopers pointed out in the 2017 Retail Trends Report that the showroom model can achieve the best results for those products that are differentiated. These products are usually different in each store (such as clothing), a new concept for consumers (such as the latest electronics), not touchable (such as traffic packages), or too expensive (such as jewelry).

One opportunity to benefit from the showroom is the online brand that is embarrassed by e-commerce. In order to get the attention and consumer trust of traditional retail brands, the online brand has to enter the line. The form of the showroom is lower than the cost of the ordinary store, and usually does not need to manage the inventory. Take the clothing brand as an example, as long as the products of all colors and sizes of the season are displayed one by one.

For brands with large volumes and high unit prices, the benefits of the showroom are obvious, such as Tesla. You don't have to buy dozens or even hundreds of cars on a 5,000-square-foot site in a suburb of a city like a traditional 4S shop. Instead, you can rent 10 500-square-foot pavements in major gold business districts for use as a showroom. .

But traditional offline retailers, especially those with large volumes that have matured supply chains and retail networks, need to be cautious about the showroom. Nick Hudson, director of PricewaterhouseCoopers, said in an interview with retail industry media Retail Dive that since the inventory management system and supply chain are designed according to traditional store distribution ideas, it may be very difficult to fully switch to the showroom mode. He used the GAP, a clothing brand that is trying to transform with the showroom, as an example: “I would recommend GAP to choose a store and transform it into a showroom. It will not work. Can consumers enter the store? How is my productivity? There will be What kind of running logic? Maybe you don't need to make a full-screen showroom network, maybe just set up a flagship store in New York, and then transform the store in the central area into a showroom."

Other retailers may not be able to get the benefits from the showroom at all, such as fast fashion brands like Zara. Hudson analyzed that Zara is taking a low-cost and large-scale model. On the one hand, its price factor will not make consumers entangled in whether to buy online or offline, whether the freight is worth it; on the other hand, its store itself To rely on a wealth of product choices to attract traffic, showrooms have little effect on their operational efficiency. In the same way, discount department stores should not try the showroom because the price of the goods itself is already low enough.

Retail industry

Zara store

Hadson describes a coordinate system: the horizontal axis is the price, the vertical axis is the fashion; the first quadrant is a cheap fast fashion retailer, such as Forever 21; the second quadrant is represented by the expensive well-known fashion brand Gucci; The quadrant is a cheaper and less fashionable retailer, such as Wal-Mart; the fourth quadrant is a business brand that is more expensive, but with less style and less fashion. The most suitable retailer in the showroom mode is in the middle of the coordinates, the mid-end basic fashion brands, such as GAP, J Crew or Target, which usually need to cover warehousing, logistics, operations, etc. through higher price ratios. Cost, the showroom can help it control inventory, reduce store operating costs, and thus squeeze out the price adjustment space, so that consumers get more benefits.

In addition to brand positioning, the location of the store is equally important. A crowded urban or residential showroom can play a role, and consumers in tourist destinations often want to buy something as a souvenir or gift to take home, retailers should be committed to meeting this demand, the showroom may be under such conditions It doesn't work very well.

There are a few risks to consider when you want to play the showroom. In addition to the “difficult to turn around” mentioned above, retailers must ensure that the store design is fascinating, and the salesperson can be consumer-centric. If the consumer sees a product on the Internet, the expectation is that 7 points, then the showroom should try to make the early adopters get a more than expected 10 points experience, otherwise a retail space that is both boring and can't get things at the time, feels worse than the traditional offline store.

Secondly, although the showroom can eliminate the pain of consumers returning home from small bags and small items, many retailers may have to renovate their original distribution centers and improve logistics efficiency. It is best to let consumers get home. You can get the courier. Finally, retailers must have the patience to educate consumers that not everyone can adapt quickly to this new way of shopping.

For more exciting reports, please pay attention to the world clothing and footwear network.

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