When Online Shops Move Offline

Besides adding legitimacy, businesses that began online can actually end up being more profitable when they open a physical space. The reason, as Igal Alon found out, is because nothing is as good a calling card as an actual storefront.

Alon launched a jewelry business online in 2003 after having been laid off from his telecommunications job the same year. “The fun thing about a website is that you don’t have to be committed to a certain place,” Alon said. He used the site to market his products, and because he didn’t have to watch over a store all day, he also had the opportunity to travel around regularly to industry events and shows. “But at some point, the volume and the time grew beyond something that I could just do from my house. So I decided to rent a store.”

Alon’s store, Mavrik Jewelry, opened in St. Louis in 2005 and he noticed an increase in his business thanks largely to the store’s visibility. “When you work out of a house, you just get totally different exposure than when you have a retail store,” he explained. “If you compete in the online world, you are competing with thousands of sites so your visibility is different. But when you have a store, even if you don’t do anything, you still can be seen.”

Mediate says her company also became more profitable after opening a retail store, but it didn’t happen overnight. “There was definitely a dry spell for about six months when we had trouble getting people to come in. It took a lot of advertising and post cards,” she said. Ultimately, though, having the physical store has helped to increase her market share and add more new customers. “A lot of people won’t ever shop online and a lot of people won’t ever shop in the store,” she said. So in that sense, having both a site and a store have helped capture a wider audience.

Schoenfeldt agrees that the ideal option at this point in time is to have “a nice combination of both” online and offline spaces. “If you aren’t going to open your own store, then sell into stores or consider a pop-up shop where you open a store for a short time,” she said. The bottom line is if you can afford it, why would you want to throw away your opportunity to market your brand offline too?

For Tara Mediate and her husband, marketing themselves in a store and on the web has come with an additional advantage. It has this couple to forge a good working partnership as they each have their role to play. “My husband wasn’t and still isn’t interested in retail, but he is excited about this project because it is going into his space, which is computers,” she said. “Retail is kind of in your blood or it’s not, and it’s in mine, but not his.”

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