What Kind Of Retailer Is Most Suitable For Showroom?

Bonobos is one of the most popular and changing new ways of shopping in America.

Brand revenue in 2016 was as high as $one hundred million.

Bonobos, founded in 2007, originally wanted to be a pure electronic business. Now it has opened more than 20 entities in many cities including Chicago and New York. More appropriate is the 20 showroom, meaning showrooms and showrooms.

Bonobos website

Now, WAL-MART is talking about the acquisition.

Matters concerned.

It is said that the amount of purchase will be as high as 300 million dollars, and the attraction of WAL-MART is Bonobos's special showroom mode.

Once the acquisition is successful, Bonobos will become WAL-MART's effective force against Amazon online apparel sales.

The word Showroom is nothing new in itself. It often appears in

Industry: during the fashion week, designer brands with market potential will be located in showroom, which is run by third parties. Their fashion works are hanged on hangers in turn, for buyers of boutique stores or collection shops to evaluate their design language, fabric use and practicality, and sign the order to the designer brand.

In the past one or two years, when the traditional offline store efficiency is too low, the operation cost is high and the touch range is limited, while the electricity supplier can not solve the problem of consumer experience thoroughly under the existing technology conditions, the showroom mode is gradually gaining popularity in the United States.

However, the new showroom is different from the traditional fashion week showcase, which is more a way to help brands improve their efficiency.

Apart from WAL-MART, Tesla, Amazon, leisure yoga clothing brand Lulu lemon and so on have shown interest in showroom mode.

Showroom the shop assistant is fitting the customer.

Online and offline integration paradigm

According to the world clothing and shoe net, WAL-MART's Bonobos is targeted at a 18-40 year old male. Since 2012, Bonobos, the original guide, has opened its first showroom online. They call it "shopping guide store" (Guide).

Here, whether customers who are in the shop or those who have made an appointment online, they can drink beer or other drinks on their own and try out their T-shirt jeans or business suits.

At the same time, the "Ninja" shop assistants will provide customers with various services, including body measurement, and recommend suitable clothing and matching.

Once the fitting is satisfactory, the customer can place the order.

There is no stock in the showroom. All the goods are sent from the central warehouse to customers' homes.

Bonobos shopping guide

This is an interesting online offline fusion mode.

Andy Dunn, the founder of Bonobos, worked in Abercrobie&Fitch and was responsible for folding clothes.

This work experience made him realize that compared with women, men do not like shopping, and they do not care if they can get goods in the real store and take them home.

At first, Dunn thought that the entity store would disappear, and the Bonobos that he built was also a pure electric business brand. However, later, he realized the pain point of the pure electric business brand and could not try it on, so he decided to combine the electricity supplier with the entity store mode, so today has the showroom mode of Bonobos.

PWC (PWC) recently released the "2017 retail trend report" analysis of Bonobos's showroom mode, that it has all the advantages of high-end, high touch retail entities, customers can try to wear, can get professional recommendations, but compared with physical retail, Bonobos fewer staff, and therefore lower cost.

In addition, after the first order, customers will have their own data, such as the number of clothes they wear and what style they like. After that, customers will no longer need the help of the salesmen, and they can place orders online.

Data show that most of Bonobos's pactions are online, and customers do it by themselves.

This shows that the showroom mode makes the loyalty of customers higher, and at the same time, because of the trial wear, the return rate is lower.

The inventory of showroom mode is much smaller than that of traditional clothing stores.

The biggest cost savings, however, lie in zero inventories.

Take cowboy clothes as an example. Bonobos showrooms only need 220 samples to cover all the different sizes and styles, while the traditional stores often need up to 3600 pieces of stock - this is just one of cowboy costumes.

Because of zero inventory, Bonobos also saves the infrastructure costs associated with inventory, such as supply chain, professional inventory inventory system, etc.

When customers need to place orders, the "Ninja" shop assistants in Bonobos store will help customers complete the online shopping process with iPad. After that, customers want to buy again, as long as they can buy online at home.

This mode also avoids the risk of changing the idea and giving up the purchase.

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Why is the showroom model a popular fried chicken in the US retail market?

More and more retailers are beginning to realize that whether you start online or offline, finding a way of selling consumers who can feel the goods and enjoy the convenience of buying is the king's way to win the retail business.

Traditional offline store efficiency is too low, operation cost is high, and touch range is limited. Under the existing technological conditions, the electricity supplier can not solve the problem of consumers' experience thoroughly.

Showroom seems to be able to bridge this service gap.

Management consulting firm Andreas, Mendoza's global retail strategy partner, has summed up showroom's thinking as a syllogism: online access to goods - offline experience - online payment.

He believes that consumers prefer to study products online and complete payment, but 2/3 of people still go to the store before and after buying to see what their favorite products are.

Therefore, "showroom is another step that can better satisfy the needs of consumers," said pea, Mendoza.

The brand can make consumers curious about a product through the Internet, and then let them get the most touching real experience in the physical store. Consumers will then place the order online, and then go home to wait for the delivery.

Tesla, Amazon, leisure yoga clothing brand Lulu lemon and so have tried showroom.

Matt Sargent, vice president of Margid retail business of consulting firm, thinks Amazon's bookstore is a showroom mode for its proprietary electronic products.

When launching the voice assistant Alexa, Amazon allows customers who visit their bookstores to try this product in person, and then place the order online.

Lulu lemon uses showroom to test the water before entering a market, so that consumers can follow the Yoga leader or lifestyle opinion leader to experience the feeling of wearing yoga pants.

Walton, an angel investor at Bonobos and a professor at the Business School of David Bell, said that the concept of showroom is particularly important for future retailing.

Earlier in an interview with reporters, he summed up the advantages of this model: it will not spend too much rent, consumers can only buy here, ideally, can achieve zero inventory.

It is also the representative of the experience economy, and the emphasis on experience is an important difference between the millennial generation of consumers and the last generation.

WD Partners, a consumer experience research firm, investigated 2500 consumers in the form of showroom, which could raise the number of people who have a willingness to buy 5%, but for millennials, it could increase by 15%.

Not all retailers are suitable for showroom mode, such as Zara

However, just like a store manager in Manhattan said, although Bonobos is now a great success, its showroom mode may not be applicable to women's clothing because women's demands for clothing styles, colors and sizes are more complex and subtle.

So what kind of retailer is best for showroom?

In the 2017 retail trend report, PWC points out that for those products that are differentiated, the showroom mode can yield the best results.

These products are usually different from each store (such as clothing), which are completely new concepts to consumers (such as the latest electronic products), which can not be touched (such as flow packages), or too expensive (such as jewellery).

One chance to rely on showroom is to benefit from the Internet born brand.

If you want to get the attention of traditional retail brands and consumer trust, you will have to enter the offline brand.

And the form of showroom is lower than that of ordinary stores. Usually, there is no need to manage stock. Take clothing brand as an example, as long as we can display one color and size product in season.

For brands with large volume and high price, the advantages of showroom are also obvious, such as Tesla.

You don't have to build a 5000 square foot site in the suburbs of the city like a traditional 4S store, and put dozens or even hundreds of cars, but you can rent 10 10 square feet of paving for showroom in the major gold trading areas.

But the traditional offline retailers, especially those who have a large body size, have formed mature supply chain and retail network, need to be cautious about showroom.

Nick Hudson, director of PWC think, told the retail industry media Retail Dive that the inventory management system and the supply chain were designed according to the traditional store distribution idea. The overall turning to showroom mode could be very difficult.

He used the clothing brand GAP, which is trying to pform showroom, for example: "I would suggest that GAP choose a shop to pform it into showroom and see if it works."

Will the consumer enter the shop? How about my productivity? What kind of operation logic do you have in the store? Maybe you don't need to make a comprehensive showroom network, maybe you need to set up a flagship store in New York, and then pform the shops in the central region into showroom.

Other retailers may not be able to benefit from showroom, such as Zara's fast fashion brand.

Hudson analysis, Zara is going to be a low price mode, on the one hand, its price factors will not make consumers entangled in the end to buy online and offline, and whether freight is worthwhile; on the other hand, its stores itself will rely on a wealth of product choices to attract traffic, because showroom has little effect on its operational efficiency.

Similarly, discount department stores should not try showroom because the price of the commodity itself is low enough.

Zara stores

Hudson describes a coordinate system: the horizontal axis is the price, the longitudinal axis is the fashion; the first quadrant is the cheap fast fashion retailer, such as Forever 21; the second quadrant is represented by the expensive well-known fashion brand Gucci; the third quadrant is the cheap and low fashion retailer, such as WAL-MART; the fourth quadrant is the Brook Brother, which has a higher price, but the style changes little, the fashion degree is low.

The most suitable retailers in the showroom mode are in the middle of the coordinates, that is, the basic fashion brands in the middle end, such as brands such as GAP and J Crew, or Taghit department stores. They usually need to cover the cost of warehousing, logistics, operation and so on through a high price rate. Showroom can help them control inventory and reduce the operating costs of the stores, thereby squeezing the price adjustment space and enabling consumers to get more benefits.

In addition to brand positioning, the location of stores is also crucial.

Showroom can play a role in crowded urban or residential areas, while consumers in tourist resorts often want to buy things as souvenirs or presents to bring home. Retailers should be committed to meeting this demand. Showroom may not be effective under such conditions.

If you want to play showroom, you have to take into account the following risks.

In addition to the previously mentioned "ship difficult to turn around", retailers must ensure that stores are designed to be attractive and salesmen can be consumer centric. If consumers see a product on the Internet and expect it to be 7 points, then showroom should try to make the customers who have come to enjoy the experience beyond the expected 10 points, otherwise a retail space that is neither interesting nor available at that time will feel worse than the traditional offline stores.

Secondly, although showroom can relieve consumers from the pain of carrying large bags and carrying things home, many retailers may have to pform their original distribution centers and continuously improve their logistics efficiency, so that consumers can get express when they arrive home.

Finally, retailers should have patience to educate consumers, not everyone can quickly adapt to this new way of shopping.

More interesting reports, please pay attention to the world clothing shoes and hats net.