E-commerce is on the rise. Why are home brands rushing to open stores? – Business of Home

E-commerce is on the rise. Why are home brands rushing to open stores? – Business of Home

If we’ve learned one thing from the COVID era, it’s that you can accomplish a lot online if you have to—especially shopping. The pandemic saw an unprecedented, universal boom in e-commerce, even for historically tricky categories like furniture (Wayfair saw its revenue shoot up 84 percent in one quarter). In an oft-cited study, McKinsey found that e-commerce adoption had advanced 10 years in three months of lockdown. The pandemic was, the story goes, the tipping point that finally shifted the balance of power from physical to digital commerce.

Given that, one would assume that every home brand on earth would be going all in on digital right now, and letting their stores rot. Instead, the opposite has happened. We’re on the brink of a massive period of brick-and-mortar growth for home brands.

A telling, but by no means comprehensive list: Ohio-based home retailer Arhaus, which filed to go public earlier this month, is planning to more than double its brick-and-mortar footprint to 165 showrooms. The Shade Store, already 106 locations strong, plans to keep opening new showrooms at a steady clip of 20 per year. Framebridge has debuted 12 locations in the past 12 months. RH keeps opening new galleries and is expanding to Europe. In perhaps the most ambitious example of retail expansion, Interior Define is planning 30 (yes, 30!) new locations in 2022 alone, tripling its IRL presence.

What’s going on?

WHITE SPACES
Here’s an experiment—try it with a friend or family member who’s not in the industry. First, ask them to name as many brands as they can in fashion. Then, ask them to do the same for home. I tried it with my wife, who named 40 clothing brands before pausing to think. When it came to home, she struggled to get to 10.

Your own results may vary slightly, but the point stands. To industry insiders, it may seem like the market is crowded, but for the average consumer, there simply aren’t a ton of big brand names in home. It’s a classic “white space” situation—a hole in the market that many are eager to fill. “When you look at home, 50 percent of the market is dominated by about 10 big brands. The other half is 25,000 [small operations],” says Jill John, the chief customer officer at Interior Define. “We feel like there’s a lot of market share at play, and [opening stores] is a great way for us to drive brand awareness.”

Of course, that hole has been there for decades. What has changed recently is the competition to fill it. RH’s explosive growth has shown that there’s some healthy room between midmarket retail and the design trade. Catalog brands like Lulu and Georgia and Serena & Lily have leapt to prominence, with direct-to-consumer startups like Burrow, The Inside, Whom and many others nipping at their heels. All that activity in the market, coupled with the rocket fuel of the pandemic home boom, have convinced many brands that now is the time to make a big move.

That’s particularly true at the top end of the market, where RH’s dominance has revealed a sizable audience for upscale home retail, and very …….

Source: https://businessofhome.com/articles/e-commerce-is-on-the-rise-why-are-home-brands-rushing-to-open-stores

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