As shoppers increasingly turn to online retail, apparel brands who have perfected the direct-to-consumer model face a critical choice: expand into brick-and-mortar stores or risk missing out on the advantages of physical retail. The idea seems counterintuitive, but starting a brick-and-mortar store can offer massive benefits when done strategically. So, why would a DTC retailer open a brick-and-mortar store?

Physical stores address online shopping limitations, offering customers the tangible experience of feeling fabric textures and trying on outfits for the perfect fit. They also provide space to display their products and build stronger emotional connections with customers, increasing loyalty and trust. Ultimately, brick-and-mortar retailers have an opportunity to reach their target audiences while also streamlining the omnichannel retail experience.

What does the transition to brick-and-mortar retail require from DTC brands?

Expanding into physical retail requires site selection grounded in demographic and foot traffic analysis, familiarity with lease terms including rent escalations and CAM charges, and an omnichannel strategy that connects in-store and online customer experiences. Analyzing market demographics, competition, and foot traffic patterns helps in finding an ideal spot. However, finding suitable spaces and negotiating lease terms is challenging, especially in high-demand areas.

Beyond location, lease negotiations can be complex. Retailers must familiarize themselves with the ins and outs of rent escalation clauses, lease durations, common area maintenance charges, and tenant improvement allowances, among others. Negotiating lease agreements can be a daunting, time-consuming process, particularly for inexperienced brick-and-mortar retailers.

Acquiring the lease is just the beginning. Brick-and-mortar stores also require robust omnichannel strategies that unite online and offline customer experiences. Retailers should consider customer preferences when answering critical questions, such as whether customers want items shipped to their doorsteps or to pick up products in-store and whether in-store returns should be frictionless.

Achieving a balance between online and in-store shopping can be tricky, but it’s critical to create a consistent brand experience across all touch points without hurting sales or weakening the brand identity.

Navigating these challenges can be overwhelming for businesses but can lead to new opportunities for growth and engagement with the proper strategies and tools.

What resources help DTC brands manage the move to physical retail?

Lease management technology supports the move from online to physical retail by centralizing lease data, automating critical date tracking, enabling financial analysis across locations, and facilitating collaboration between real estate, finance, and operations teams. While location scouting and customer-centric business strategies are essential steps in how to open a brick-and-mortar store, utilizing lease management technology can streamline the entire process. This isn’t just a digital file cabinet; it is a multifaceted platform that empowers retailers to navigate the physical retail landscape confidently. Here’s how:

1. Centralized lease data management

Occupier’s platform acts as a centralized location for all lease-related data and documents. It eliminates the chaos of paperwork, ensures accuracy, and provides easy access to critical lease information.

2. Automated tracking and reminders

The technology has a built-in feature for tracking critical lease dates and provides automated reminders. This feature helps retailers meet key deadlines, ensuring lease compliance and creating more room to focus on core business operations.

3. In-depth financial analysis and reporting

Occupier’s lease management system provides advanced financial analysis and reporting capabilities. Retailers can generate customized financial reports that offer detailed insights into occupancy costs, lease expenses, and storewide financial performance. This helps retailers make informed, data-driven decisions and identify cost-saving opportunities.

4. Enhanced collaboration and communication

The platform promotes collaboration and communication amongst various stakeholders involved in lease management. Retailers can securely share lease documents and critical information with their internal teams, landlords, or third-party services — providing transparency, improving efficiency, and supporting effective coordination, all of which are pivotal to the success of brick-and-mortar expansion strategies.

How does omnichannel retail strategy connect online and physical stores?

Omnichannel retail is not about choosing between online and in-store. It is about creating a unified customer experience that lets shoppers engage on their own terms, whether that means buying online and picking up in-store, returning in-store, or receiving personalized in-store service with home delivery. In reality, these two business models complement each other and provide a customer experience that meets the ever-evolving needs of consumers.

In this era of omni-channel retail, it isn’t about choosing between online and offline. Instead, it’s about creating a balance — bridging these two worlds leads to a seamless, unified shopping experience that allows customers to engage with brands on their terms. With strategic planning, the right tools, and a customer-centric approach, the transition from online to offline can lead to unparalleled business growth for digital retailers.

Why do DTC brands embrace brick-and-mortar stores?

DTC brands open physical stores to create tangible brand presence, offer sensory product experiences, reach new customer demographics, and build the kind of trust and loyalty that online channels struggle to replicate. Customers can interact with products, enhancing the sensory experience and enabling immediate purchases. Physical stores also help DTC brands expand their reach, target new demographics, and increase brand awareness. Embracing brick and mortar allows DTC brands to create a seamless omni-channel experience.

How have DTC apparel brands used lease management to scale physical retail?

The following examples show how three DTC apparel brands used lease management software to support physical retail expansion while maintaining ASC 842 compliance and cross-team visibility.

Bonobos

Founded in 2007, Bonobos started as an exclusively online direct-to-consumer (DTC) brand specializing in men's clothing. The company gained recognition for its innovative approach to men's fashion, particularly its focus on providing well-fitting, high-quality garments.

Fast forward to 2015, and Bonobos launches their flagship "guideshop" on Fifth Avenue in Manhattan. This smaller footprint storefront acts as a showroom for their product enabling men to receive personalized fittings and have their purchase shipped straight to their doorstep.

Bonobos uses Occupier to power their lease administration process from critical date management, to financial rent tracking, and real estate growth strategy. According to Colleen O'Hara, the Head of Real Estate at Bonobos, "Out of all the lease management software systems I have used, Occupier is hands-down the most user-friendly and intuitive system. They provide ease and dependability to managing our lease portfolio. Plus, the Occupier team goes above and beyond to help whenever I am in need..

Marine Layer

Marine Layer crafts “absurdly soft” shirts with a laid back California style. Founded in 2009, the San Francisco based retailer recently earned its B Corp certification for sustainability, environmental values, and social consciousness. The brand has scaled to more than 46 stores across the states.

They implemented Occupier in order to gain ASC 842 lease accounting compliance as well as to enable collaboration with their real estate team. "Marine layer is in retail expansion mode, which means searching for new brick & mortar stores locations… Occupier is our one stop shop for everything lease management.“ Retail expansion starts with a single source of truth for all teams to collaborate in from real estate to operations, finance and c-suite.

Buck Mason

Buck Mason is a men's clothing brand known for crafting high-quality, timeless essentials since 2013. They prioritize simplicity, combining modern style with classic American craftsmanship. Originally an e-commerce DTC brand, Buck Mason now has physical stores across the United States, enhancing the shopping experience. Today, they continue to flourish by providing men with elevated essentials that balance style and substance.

Between 2021 and 2023, Buck Mason has grown from 12 to 25 locations with plans for additional growth. They implemented Occupier in order to comply with the ASC 842 lease accounting standard. In addition, retail expansion goals are a big driver for Buck Mason's adoption of Occupier. They knew that as they added more stores, the ability for numerous team members to have real estate visibility would be key to managing their lease portfolio.