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Mapping the physical locations of DTC brands

New York, San Francisco and Los Angeles were the top three cities where digital-first retailers open their first stores.
October 30, 2019
Kendall Davis / Retail Dive

At this point, it’s no longer a surprise to hear that a direct-to-consumer (DTC) brand, started as a pure-play e-commerce business, is moving into physical retail.

It started with some of the front-runners — think: Warby Parker and Bonobos which now have over 100 and 60 stores respectively in the U.S. Since then, other DTC brands have jumped on board, opening their own form of physical retail, whether it be showroom-style or a more traditional (albeit usually smaller square footage) format.

As evidence of that movement, one JLL study from last year noted that digitally native brands were set to open 850 stores in the next few years. At the time, Casper had recently announced plans to open 200 stores across North America and Adore Me was considering 200 to 300 stores over five years.

Since then, beauty retailers Sephora and Ulta have launched their own merchandising efforts to highlight their partnerships with DTC brands, and Target continues to scoop up partnerships with the likes of Quip, Casper and Versed. And while wholesale partnerships are also helping young brands grow, many are dedicated to opening their own fleets of stores.

In September, hair color brand Madison Reed announced plans to open 600 stores by 2024 through a joint venture with Franworth to franchise its locations. The brand also has an exclusive wholesale partnership with Ulta.

Even with the grand brick-and-mortar ambitions these companies have, there are marked differences between the stores they’re opening and those operated by traditional mall-based retailers or mass merchants.

For one thing, DTC brands have a different view on the purpose of a physical location, with many highlighting an educational experience or one-on-one service rather than another spot to make a transaction. Others are turning to brick-and-mortar retail as another form of marketing and a means of creating more personal relationships with shoppers.

To explore some of the unique elements of DTC brands opening brick-and-mortar stores, Retail Dive took a look at where top-of-mind brands opened their first few stores. For larger players, we capped the count at their first 10 physical locations.

The results confirmed trends we’ve been watching — for example, that New York (and particularly SoHo) is a popular place for DTC brands to open shop — but it also highlighted some cities that have gotten less attention.

In tracking some of the first locations for eight DTC brands (Allbirds, Away, Bonobos, Casper, Everlane, Glossier, Rent the Runway and Warby Parker), Chicago appeared five times. While that’s not the largest concentration of stores we came across in our reporting, it shows a significant interest in the city, at least for brands just beginning their journey into offline retailing.

Outside of DTC brands opening up shop in the city, Chicago has been home to innovation from some of retail’s older players as well. Target has focused in on the city for several of its small-format stores, Amazon in July announced plans for two Go stores in the city and Kohl’s piloted its in-store WW Studio in the area.

San Francisco was also a popular location for the brands we examined, with seven choosing to open one of their first ten locations in the city. It was also the site of Allbirds’ first physical location and Everlane’s second.

Like Chicago, San Francisco was a target of Amazon’s Go stores and has had its fair share of retail experimentation, including a recently announced pop-up from Gap Inc.’s Hill City brand.

Austin, Dallas and the Washington, D.C. area also showed up more than once across the small sample size we selected, perhaps indicating a second-tier city of interest for DTC brands.

Chicago, IL
Each circle represents a store location included in the study. Hover over each for details.
Credit: Nami Sumida / Retail Dive

In tracking some of the first locations for eight DTC brands (Allbirds, Away, Bonobos, Casper, Everlane, Glossier, Rent the Runway and Warby Parker), Chicago appeared five times. While that’s not the largest concentration of stores we came across in our reporting, it shows a significant interest in the city, at least for brands just beginning their journey into offline retailing.

Outside of DTC brands opening up shop in the city, Chicago has been home to innovation from some of retail’s older players as well. Target has focused in on the city for several of its small-format stores, Amazon in July announced plans for two Go stores in the city and Kohl’s piloted its in-store WW Studio in the area.

San Francisco, CA
Each circle represents a store location included in the study. Hover over each for details.
Credit: Nami Sumida / Retail Dive

San Francisco was also a popular location for the brands we examined, with seven choosing to open one of their first ten locations in the city. It was also the site of Allbirds’ first physical location and Everlane’s second.

Like Chicago, San Francisco was a target of Amazon’s Go stores and has had its fair share of retail experimentation, including a recently announced pop-up from Gap Inc.’s Hill City brand.

Austin, Dallas and the Washington, D.C. area also showed up more than once across the small sample size we selected, perhaps indicating a second-tier city of interest for DTC brands.

Cities where top DTC brands opened their first few stores
Each circle represents a city where DTC brands opened their first stores, with the size of the circle corresponding to the number of stores located in the city or surrounding metro area.
The following brands are included in the map: Allbirds, Away, Bonobos, Casper, Everlane, Glossier, Rent the Runway and Warby Parker.
Credit: Nami Sumida / Retail Dive

Since we operated off a relatively small sample size, the brands we chose do not, of course, tell the whole story of DTC brands opening brick-and-mortar stores. But they do point to some locations of interest for retail’s new class of disruptors — and what they might be looking for as they make their first forays into physical retail.

New York, NY
Each circle represents a store location. Locations within the scope of the study are in red, while other locations of interest are in indigo. Hover over each for details.
Credit: Nami Sumida / Retail Dive

Six of the brands we looked at opened their first ever physical location in New York. A popular city for retail experimentation, DTC brands are not the only companies establishing a presence there. New York is home to several experiential flagships, including Nike’s House of Innovation, opened last year, as well as Puma’s recently opened location and Nordstrom’s Manhattan flagship.

In fact, Nordstrom has made several moves in New York recently, including its first men’s store and its Nordstrom Local concept. The allure of the city is obvious — it’s an urban area well known for its shopping streets — but it’s also a city that has experienced a slew of retail vacancies (double that of a decade ago) thanks, in part, to high rent.

Still, for DTC brands trying to reach current customers and raise awareness for new ones, New York has the undeniable pull that comes with being the center of U.S. retail for so long — and also has the benefit of both mainstream shopping streets (e.g. Fifth Avenue) and slightly more local ones (SoHo).

Los Angeles, CA
Each circle represents a store location. Locations within the scope of the study are in red, while other locations of interest are in indigo. Hover over each for details.
Credit: Nami Sumida / Retail Dive

Los Angeles, and in particular the Melrose neighborhood of Los Angeles, seems to be an up-and-coming test bed of retail innovation. Los Angeles is the only other city, in addition to New York, to have a Nordstrom Local (there are currently three locations in Los Angeles, including one in Melrose), and Nike has also turned to the Melrose neighborhood to test out its members-only store concept Nike Live.

In addition to those mentioned above, and the DTC brands we looked at specifically, Los Angeles is also home to a new store concept from The Container Store and was one of the cities for Samsung’s three experience stores. Melrose in particular, which seems to be popular with DTC brands, is also home to Untuckit, The RealReal, Indochino and Reformation, among others.

Boston, MA
Each circle represents a store location. Locations within the scope of the study are in red, while other locations of interest are in indigo. Hover over each for details.
Credit: Nami Sumida / Retail Dive

Boston can be forgotten, like San Francisco and Chicago, in the the shadow of high profile retail destinations like New York or Los Angeles. However, it also showed up consistently for the DTC brands we looked at, and like New York, has brands opening locations in a few different shopping areas. Near or around Newbury Street was a popular location, with three of the four DTC brands with Boston stores opening one of their first stores there.

And the city’s relatively new Seaport district plays host to Away’s only location in the city along with Bonobos and Warby Parker stores (which both opened one of their first stores near Newbury). Outdoor Voices and a retail concept called For Now, which sells emerging e-commerce brands, are also stationed in that area.

According to data from Placer.ai, Boston Seaport has grown from a daily average of 34,000 visits at the start of 2017 to “well over 40,000” in 2018 and 2019. In addition, the company found that the average visit duration is over four hours and almost half (47.3%) of visitors to the area spend over 150 minutes there.

Methodology

For this project, we wanted to look into where DTC brands are opening their first locations to see if we could glean any insight from those choices. We picked eight of the DTC brands we hear about the most and that had also distinguished themselves (for now) as constant players in the space. Those were: Allbirds, Away, Bonobos, Casper, Everlane, Glossier, Rent the Runway and Warby Parker.

Since store footprint varies widely among the brands we chose, we limited our study to the first 10 locations of every brand, which were provided to Retail Dive by company spokespeople or the brand’s website. For Casper, we included 16 locations, as several temporary pop-ups became permanent stores around the same time.