The lines between e-commerce and brick-and-mortar retail have been blurring for years, as traditional retailers have expanded their online and mobile presences. At the same time, the world’s most iconic online retailers — Amazon and Alibaba — have each opened physical storefronts, making those lines even fuzzier.
There are plenty of benefits to operating online — limited real estate expense, instant geographic reach, and unified inventory management and customer service. But there are also advantages to having a physical retail presence. Being able to touch and feel products at physical stores often makes customers more comfortable buying apparel and accessories. Storefronts also act as advertisements, and can boost the prestige associated with a brand.
Starting with men’s apparel retailer Bonobos in 2011, startups that launched as online-only have increasingly been opening brick-and-mortar stores. Many have experimented with pop-up shops, some use next-gen methods (such as women’s workwear startup Argent distributing through a WeWork location), while others have opened more permanent locations.
Among the permanent locations, we see a strong emphasis on experiences over product displays, with personal styling options, food, drinks, and salon services on offer in some of the stores listed below. Furthermore, some of these brands have retained their unified supply chains while opening geographically dispersed stores— Bonobos, Modcloth, and others have used storefronts to let customers try goods on in person, but still distribute all inventory directly to buyers from warehouses.
Startups are listed in order of the opening date of their first physical store. This list is limited to private, VC-backed apparel and accessories startups that operated online-only for a few years before branching into brick-and-mortar retail.
Disclosed funding: $128M
Select investors: Peterson Ventures, Nordstrom, Accel Partners, Lightspeed Venture Partners, Forerunner Ventures, Felicis Ventures
The leader in online-to-offline strategy, Bonobos launched in 2007 to sell well-fitted men’s pants directly to consumers online. In fact, the brand was viewed as somewhat of an e-commerce pioneer, based on its (then more unique) online-only sales model and early use of social media marketing.
According to founder Andy Dunn, the brand opened several fitting rooms in their New York office, and their popularity pushed the company to open full-service physical stores starting in Boston in 2011. Bonobos stores operate like showrooms — customers can try on the clothes with help from stylists, but any items they want to buy get shipped directly to their homes from centralized warehouses. The model helps Bonobos save on inventory costs and real estate.
Bonobos currently operates over 24 storefronts, and Dunn has mentioned plans to open 100 by 2020.
2. Warby Parker
Disclosed funding: $216M
Select investors: General Catalyst Partners, First Round Capital, Thrive Capital, BoxGroup, Menlo Ventures, Lerer Hippeau Ventures
Along with Bonobos, Warby Parker may be the most prominent example of an e-commerce startup laying real-world foundations. Founded in 2010 as an e-commerce startup, Warby Parker initially promised cheaper prices for fashionable eyewear based on its direct-to-consumer model. It opened its first physical storefront in Manhattan in April, 2013, and by 2014, operated eight stores that it announced were collectively profitable, with average sales per square foot of $3,000. That metric would rank the brand higher than nearly all other retailers except for Apple.
Today, Warby Parker has expanded to nearly 40 stores, and co-founder Neil Blumenthal said he could ultimately see opening 800 to 1,000.
Disclosed funding: $287M
Select investors: Harrison Metal, Thrive Capital, Highland Capital Partners, BoxGroup
Harry’s Razor Co. has focused its brick-and-mortar strategy on the experiential. Founded in 2013 to sell razors directly to consumers online, the brand has less need than apparel companies to let customers handle its products in person before purchase. In October 2013, it opened Harry’s Corner Shop in Manhattan, a “neighborhood barbershop” that offers haircuts and shaves along with Harry’s products. The barbershop also sells a selection of non-shaving products from other companies, in an environment designed to reflect the Harry’s brand.
Disclosed funding: $300M
Select investors: Matrix Partners, Technology Crossover Ventures, Rho Ventures
E-commerce apparel retailer and subscription service JustFab opened its first brick-and-mortar store in LA in 2013. Subsidiary Fabletics, which focuses on athletic apparel and was co-founded by actress Kate Hudson, opened its first store in 2015 and currently operates seven stores. Despite facing legal troubles, Fabletics recently asserted plans to open 75 to 100 stores over the next three to five years.
Disclosed funding: $87M
Select investors: Accel Partners, First Round Capital, Slow Ventures, Lerer Hippeau Ventures
Birchbox launched in 2010 as an online-only makeup subscription service, offering monthly boxes of curated, sample-sized cosmetics from a variety of brands. In July 2014, it opened a brick-and-mortar store in Manhattan that aimed to let consumers test and purchase full-sized products. The next year, it announced plans to open two more stores in 2016; however, the company retrenched in the face of difficulties in 2016, and its store count remains at one.
Disclosed funding: $49M
Select investors: Madrona Venture Group, Highland Capital Partners
Founded in 2007, Indochino initially promised an internet-enabled way for men to order custom tailored shirts and suits, allowing customers to submit their measurements online to order bespoke clothing. In August 2014, the startup opened its first permanent physical showroom in Toronto, to offer an in-person experience for fittings and alterations. Today, Indochino supports ten showrooms in the US and Canada, and plans to open an additional 150 by 2020.
Disclosed funding: $116M
Select investors: Advance Publications, Highland Capital Partners, Bain Capital Ventures, Kleiner Perkins Caufield & Byers
Rent the Runway popularized high-end clothing rental, letting women rent designer clothing items for a fraction of their retail prices. In 2014, the startup also released an unlimited rental option for a monthly subscription fee. To let customers try on clothes before renting, Rent the Runway opened its first physical, permanent storefront in Manhattan in August 2014. The stores offer personal styling services, and women can book appointments online ahead of time to ensure a selection of relevant items will be waiting for their perusal. Today, the company operates five storefronts.
8. Nasty Gal
Disclosed funding: $65M
Select investors: Index Ventures, Ron Johnson
From its early days as an eBay store launched in 2006, Nasty Gal grew into a large online-based apparel brand. It opened its first store in LA in November 2014, followed by a second Santa Monica location in March 2015.
9. Frank & Oak
Disclosed funding: $20M
Select investors: Rho Canada, Version One Ventures, Lightbank, Real Ventures
Frank & Oak is an e-commerce based men’s clothing brand and subscription service founded in 2012. The Canada-based brand offers mid-range priced work and leisure wear and accessories, and members receive monthly, curated boxes of items with free shipping. The startup opened its first permanent store in Toronto in November 2014, offering online and offline syncing of membership accounts, personal styling services, and an in-store coffee shop and barbershop. In the spring of 2015, it announced plans to open six long-term pop-ups in the US, and let customers vote on locations. Frank & Oak currently operates 14 storefronts in the US and Canada.
Disclosed funding: $36M
Select investors: Accel Partners, Aspect Ventures, Greycroft Partners, Burch Creative Capital, Lerer Hippeau Ventures
BaubleBar launched in 2011 as a direct-to-consumer, online jewelry startup focused on millennial women. The startup aims to use big data to bring the fast fashion supply chain model to the jewelry business. While growing rapidly online, the company began retailing its items through Nordstrom, Bloomingdale’s, and Anthropologie stores. In July 2015, the brand’s first physical store opened on Long Island, not far from its original e-commerce distribution center in Brooklyn.
11. Adore Me
Disclosed funding: $11M
Select investors: Upfront Ventures, SOSventures, Ventech
Startup lingerie brand Adore Me launched in 2011 offering direct-to-consumer lingerie online, mainly through subscription memberships, with a focus on matching sets. In March 2016, the company opened a “guideshop” out of its headquarters in Manhattan, where customers can work with personal stylists. Rather than storing inventory onsite, Adore Me ships guideshop purchases directly to customers’ homes, similar to Bonobos’ strategy.
Disclosed funding: $75M
Select investors: First Round Capital, Floodgate, Accel Partners, Norwest Venture Partners
ModCloth was founded in 2002 as an online-only retailer of vintage-inspired apparel and accessories. It edged slowly into the brick-and-mortar space, starting with a series of pop-up shops throughout 2015 and 2016 that leveraged a showroom model similar to Bonobos — shoppers could try on and select items in-store, but any purchased goods would be mailed to their homes. ModCloth plans to open its first permanent storefront in Austin, Texas, in November 2016, and may open more in the future depending on performance.
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