What are the benefits of being a pure player?
There are many advantages to remaining an e-commerce pure player. In this direct-to-consumer (D2C) business model, fashion retailers operate entirely online. They have no physical stores, and all sales are made through their online platforms, both on apps and the web. In 2021, retail e-commerce sales amounted to approximately $5.2 trillion, and this figure is expected to grow to $8.1 trillion by 2026. Meanwhile, US sales of ‘digitally native’ brands – those born and raised on the internet – accounted for nearly $35 billion in 2022.
Better value?
Being a digital pure player can also be attractive from a financial perspective. Operating exclusively online typically allows for lower operating costs, as brands can avoid expenses such as inner-city real estate, in-store staff wages, utilities, refits and routine maintenance.
In addition, consumers may perceive online-only brands as offering lower prices than their bricks-and-mortar counterparts. For example, Mirakl’s Consumer Preferences in the Digital-First Economy study found that 71% of consumers plan to shop more online in search of better value.
Engaged fans
Meanwhile, direct-to-consumer brands tend to know their customers much better than their bricks-and-mortar counterparts. This is especially true when the brand serves an established online community. This was the case for the popular beauty brand Glossier, which evolved out of a successful beauty blog, Into the Gloss. By tapping into the enthusiasm of the blog’s passionate audience and offering products tailored to their interests and needs, Glossier differentiated itself from its more traditional competitors.
Data-driven customer experience
Such strong and engaged online communities also provide a wealth of opportunities to collect first-party data through touchpoints such as newsletters, loyalty programmes and events. This data allows retailers to offer a more personalised shopping experience and targeted marketing, such as specific discounts, to make customers feel more valued and encourage brand loyalty. This data can also provide insights into customers’ buying patterns and preferences, which can be used to optimise product development. When managed correctly, strong online communities can, therefore, deliver significant brand benefits.
Given all the benefits of e-commerce, you might think that online-only brands would be reluctant to invest in bricks-and-mortar infrastructure. But in fact, more and more digital native brands are also choosing to open physical stores. Online-only success stories such as Warby Parker and Allbirds have hit their stride and expanded their customer base thanks to carefully curated physical locations. Glossier, too, has made bricks and mortar a key element of its growth strategy, generating serious social media buzz with each opening. So, what convinced these digital diehards to invest in a physical presence?
