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Reimagining Brick-and-Mortar: Why Physical Retail Should Operate More Like E-commerce

March 5, 2023
Reimagining Brick-and-Mortar: Why Physical Retail Should Operate More Like E-commerce

Retail has evolved. Why hasn’t the process for opening and operating stores changed?  

Over the last decade, the industry has undergone a digital transformation. Retailers are investing in tools to meet the needs of omnichannel shoppers. According to Leap’s data, these digital-first consumers are three times more valuable than traditional shoppers.

But the brick-and-mortar landscape remains unchanged. Often, physical retail and e-commerce teams operate in silos. Long-term leases are still common, and store design and development are costly. And staffing shortages make it difficult for retailers to deliver exceptional customer experiences.

At Leap, we view the convergence of retail and e-commerce as an exciting opportunity. By approaching brick-and-mortar more like an e-commerce platform, brands can increase performance and reduce risk.

How e-commerce platforms unlocked the modern brand

When e-commerce surfaced in the early 2000s, only the largest retailers could afford to build an online presence. Although technology existed to power online stores, brands and consumers were slow to adapt. Only 4.6% of retail sales occurred online by the decade's end. 

The rise of social media sparked a new category of retailers in the 2010s—direct-to-consumer (DTC) brands. Digital-first, these brands challenged antiquated wholesale business models. They also met the evolving habits of millennial shoppers, such as seeking lifestyle brands and convenience. 

E-commerce platforms—including Etsy and Shopify—helped to accelerate this shift. Entrepreneurs could launch and manage their online stores on these platforms because of how these platforms simplified the process and removed barriers such as:

  • Eliminating the need to hire a website designer or knowing how to code. 
  • Streamlining customer acquisition with social media, email, and SMS marketing tools. 
  • Simplifying operations such as logistics with inventory and warehouse management tools. 

These platforms empowered an entire generation of entrepreneurs to turn a passion into a business.

The resurgence of brick and mortar

Today, 85% of all retail sales in the United States occur in stores. Store openings are outpacing closures. And according to a study by Raydient, almost half of consumers still prefer to shop in a physical retail store. 

But the role of brick-and-mortar has shifted. Physical stores are critical for brand storytelling and customer acquisition. They also help retailers meet the needs of omnichannel shoppers and enable consumers to experience their favorite online brands in real life (IRL).

Although many retailers have invested in digital tools, how retailers open and operate stores has remained static. Modern brands need a brick-and-mortar solution—similar to e-commerce platforms—to legitimize their brand and scale their physical presence.

A new vision for physical retail

At Leap, we asked: what if physical retail operated more like e-commerce? By leveraging a platform to launch, operate, and scale retail stores, companies could devote more time to their core competencies.

This question led us to design a platform that alleviates brick-and-mortar challenges and integrates omnichannel retail. 

Launching a store

Today, many retailers employ traditional real estate departments or rely on brokers to launch stores—processes that can be lengthy and expensive. 

Retailers also often need more accurate third-party data to determine the location and value of a store. Engaging with landlords and managing the leasing process can take months or even years, with limited flexibility over the length of the lease. And once the lease is signed, teams must work with expensive vendors to design and build the store. 

We imagined a world where finding and launching stores was easier, more predictable, flexible, and more enjoyable for brands - driven by data. A world where a network of branded retail stores provides millions of data points to inform brands where their stores should be located, for how long, and what products they should sell. Making better hyper-local decisions using cross-category insights from markets all over the country.

Leap also manages store design and development, with input from brands. Once we sign brands, our design expertise eliminates the headache of managing architects, city permitting, and contractors. With Leap, brands can launch a store in as little as three months with no lease liability and 75% lower upfront costs.

Customer acquisition

In the past, stores were purely transactional and one-dimensional. Retailers signed long-term deals, packed sales floors with merchandise, and employed traditional marketing strategies to drive foot traffic. 

Today, stores are a critical sales channel for acquiring new, high-value customers. Growing competition online, rising customer acquisition costs and consumer privacy changes are shifting the digital advertising landscape. Retail stores act as billboards—building brand awareness and driving customers to your store and website. 

Brands can lower acquisition costs while building brand loyalty with access to our platform's local customer files and lifecycle marketing resources. Leap’s marketing programs and life cycle marketing help drive foot traffic and extend your reach.

Brands can measure stores beyond the four-wall profitability on our platform. Instead, brands can use omnichannel metrics to determine how well their stores acquire offline and online customers.  

With our customer data platform, we acquire new customers for your brand—helping you reduce CAC, drive purchase frequency, and grow customer lifetime value. Over 85% of shoppers at Leap-powered locations are new customers for our brands, and 16% shop at more than one Leap store.

Store operations

Once a retailer launches a store, hiring, training, and retaining staff is challenging. Today staffing shortages affect 67% of businesses—often impacting the customer experience. 

At the same time, managing payments, supply chain logistics, and returns require a suite of technology matching your business needs.  

With Leap’s platform, brands access world-class operations, data-driven merchandising, and a technical infrastructure that powers omnichannel performance—including inventory management, merchandising, and cross-channel returns. And by taking care of staffing and training, our platform eliminates the challenge of human resources management. 

Investing in scalable operating systems and machine learning, we help power your business, increasing average gross merchandise value by over 10%. 

Acquire customers with the right type of store for your brand. Reach out here to learn more about our store products.

Supercharge your brick-and-mortar strategy with Leap 

At Leap, we believe there is a better way todo retail. Platforms make it easier to run your business, and retail is the next frontier. 

The Leap Platform helps you launch and operate insight-driven retail stores to grow your brand with less risk. With millions of data points, premium store locations, and design solutions, Leap eliminates development and operational risks. Our platform streamlines your omnichannel business. And with a comprehensive analytics dashboard, retailers can make real-time decisions to grow their business. 

Are you interested in getting your brick-and-mortar strategy supercharged? We’d love to chat with you; reach out today.

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