Online apparel retailer Untuckit is adding children's apparel and men's pants to its merchandise offering, according to a report from CNBC.
The online retailer opened its first physical store two years ago and plans a swift expansion of 100 stores over the next five years, with 50 alone opening by the end of 2018, according to the report. Untuckit is in discussions with real estate developers Simon Property Group, Macerich and Taubman Centers regarding those places, CNBC said.
As it did for grown-ups, the children's line is starting with male-oriented merchandise: As of Friday, the only kids wear for sales is listed for boys. The company launched its women's line in the spring.
Launched in 2012, Untuckit began with co-founders Chris Riccobono's and Aaron Sanandres' search for a well-fitting shirt designed to be worn untucked. The company found early success online, but soon joined a long list of previously pure-play e-commerce retailers to move assertively into brick and mortar, including Warby Parker, Casper Mattress and Bonobos. In fact, apparel retailers moving in the opposite direction—out of physical stores and into the online-only space — tend to be bankrupt or otherwise badly struggling brands like Bebe, The Limited and Delia's.
Apparel and electronics shoppers in particular appreciate an opportunity to try out items. A survey of more than 2,500 U.S. consumers from global management consulting firm A.T. Kearney found that among those who prefer to buy online, fully two-thirds say they still rely on a physical store either before or after their purchase, A.T. Kearney partner Andres Mendoza Pena told Retail Dive last year. "That means that when you're buying a dress online, it's likely that you're going to be looking at that dress — the feeling, the color — and to do that, you leverage a physical environment prior to the purchase," he told Retail Dive last year.
Beyond that emotional pull, though, physical stores have also proven to be integral to customer loyalty, returns, fulfillment and — believe it or not — a driver of online sales. "We found 'If I don't have a store near my house to make an eventual return, I don't make the purchase,'" Pena said. "So let's agree that a physical store adds value to consumers, even when they transact online."
Analysts are also increasingly taking into account the damage e-commerce fulfillment inflicts on margins. In addition to tepid sales overall, "the shift to the variable-cost model of e-commerce from the fixed-cost store model continues to suppress operating margins for the sector," Moody's Investors Services retail analysts said in a report earlier this year on U.S. department stores. And in a report last year titled "The Death of PurePlay Retail," business intelligence firm L2 argued that, ultimately, there is no such thing as "pure-play e-commerce" because successful e-retailers inevitably open physical stores.
A $30 million investment in June from Kleiner Perkins in Untuckit was earmarked for the merchandising expansion and brick-and-mortar effort.