October 1, 2019
By Dennis Kaiser
Studies show Direct-to-Consumer (DTC) brands experience an average 45% increase in overall website traffic after a store opening. Retail stores also tend to have higher average sales per customer and fewer returns, leading to digital native brands like Warby Parker, Casper, and Bonobos and others scaling their store footprints dramatically. But the high costs and risks of leasing, staffing, and store management have kept the opportunity out of reach for many brands.
One of the key topics on the agenda at Connect DTC, recently held at Santana Row in San Jose, is the ways emerging brands can take a big step and open up a new physical store.
That’s where Chicago-based Leap Inc. steps in with an infrastructure platform and process that eases digital brands into the brick-and-mortar world. Connect Media spoke with Leap’s Amish Tolia, one of the speakers at Connect DTC, to find out more about how their retail-as-a-service platform helps emerging brands make the transition.
“Leap is a platform built to help brands execute strategy from soup to nuts,” says Tolia, calling it a “full abstraction of retail strategy, delivered with turnkey solutions.” He says one of the ways Leap helps is to create the look and feel a brand seeks to have in a physical space. Leap handles the lease with the landlord, and builds out the space, staffs and operates the store, and deploys the technology that integrates into the brand’s e-commerce channel and creates a two-way path for omni-channel purposes.
In order for Leap to takes on such risks, it must have “conviction” about a digital brand, relays Tolia. “The brands we launch have gone through a robust application and underwriting process,” he says. That includes looking for a “certain revenue threshold” as well as AOV, healthy LTV economics and a brand that has experienced some “success winning customers” in an online channel and perhaps a wholesale channel too, notes Tolia.
Leap has achieved success brand building for innovative products, creating a supply chain and strong strategy to help them “accelerate their growth,” says Tolia. In many cases the digital brand has been successful at building online but lacks the capacity or apparatus to shift into real estate operations. Leap is adept at creating the physical manifestation of a digital brand, he notes.
Tolia says that often means “bringing to life” that brand and telling its “powerful story.” They also work with landlords to think through the future of retail environments, so they are better prepared and equipped to work with digital brands, too. The sensitivities of a digital brand are different today, he says. Among the key components of that conversation is helping landlords understand that the lease term is shorter, typically one to three years, and that store development costs will be significantly less.
“A modern growth strategy has to include a smart retail presence,” says Tolia.
*Pictured Koio Pacific Heights, San Francisco
For comments, questions or concerns, please contact Dennis Kaiser