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Saturday, February 24, 2024

NC trend: Trendy online retailers grab some brick and mortar

There’s a new breed of retail entrepreneurs termed digitally native operators who are prioritizing North Carolina in their expansion plans with brick-and-mortar stores. And Charlotte, Durham and Raleigh are on the short list of fast-growing cities where these ecommerce retailers are opening their shops.

Parachute, a digital native brand
Photos courtesy of Parachute

A recent example is Parachute, a Culver City, Calif.-based home-products brand that opened a site in Charlotte’s fast-developing South End neighborhood in February. 

Parachute and other online retailers are adding stores because many consumers want to check out the products in person before heading to the internet. It also helps them stand out from thousands of online sellers and expand into their most promising markets.

“We’ve found that many customers come to the stores to touch and feel the product before going home to purchase online,” says Parachute CEO Ariel Kaye. The “conversion rate” is as much as 50% better in cities that have the company’s stores. 

“I’ve always believed in the importance of physical retail and meeting our customers where they are,” says Kaye, who founded Parachute in 2014 with a focus on bedding products. It has since expanded into furniture, home decor and baby products. 

Parachute’s first showroom opened in 2016 in Venice, Calif., with products designed in Los Angeles and manufactured around the globe. The Charlotte store will be the brand’s 14th showroom and first in the Southeast.  

Charlotte made sense because it’s one of the company’s best markets and its anticipated growth creates opportunities to add a lot more customers, says Kaye, who Inc. magazine named one of its 100 Most Inspiring Women in 2020.

Parachute plans to have 30 stores open by the end of 2022. At nearly 4,000 square feet, Charlotte will be the retailer’s largest showroom and allow for additional products such as benches and nightstands. In addition to consumers, the company markets its products to hotels and designers.

Many shoppers appreciate that online purchases can be picked up at the showrooms. That’s also a key selling point for Walmart, Target, Kohl’s and other traditional big-box retailers that have built major online businesses over the years. Best Buy CEO Corie Barry says that 40% of online shoppers pick up their purchases at the retailer’s stores, even when most items are eligible for free next-day delivery.

The company most identified with online retailing is also investing heavily in retail space. Amazon opened its first 4-Star store in North Carolina at Raleigh’s Crabtree Valley Mall in October 2020, carrying products that have been rated four stars or higher by customers and are top sellers online. The company had 33 similar stores open as of Jan. 1 and plans to add 12 in the coming months, including at the Streets at Southpoint center in Durham.

Amazon also has physical stores across other categories, including 24 bookstores, 24 Amazon Go convenience stores and 23 Amazon Fresh food outlets. It is opening its first clothing store, Amazon Style, in Glendale, Calif., later this year.

Eyeglass retailer Warby Parker was one of the first digitally native operators to open showrooms. It launched in 2010, then opened a flagship store in New York City three years later. It came to Charlotte’s Atherton Mill in March 2017 and now has four stores in the state.

Streets at SouthPoint
Photos courtesy of Warby Parker

“Over the past few years, we’ve expanded within North Carolina with locations at North Hills in Raleigh and the SouthPark Mall in Charlotte [and Durham’s Streets at Southpoint], says Sandy Gilsenan, the company’s senior vice president of retail. The company’s revenue increased 38% last year to $540 million.

Fitness company Peloton and men’s fashion retailers Bonobos.com and Indochino.com have also opened showrooms in Charlotte and the Triangle. Bonobos, which is owned by Walmart, has a “guideshop” at Raleigh’s North Hills and in Charlotte’s Atherton Mill. Vancouver, British Columbia-based Indochino has a showroom at SouthPark and also operates one of its store-within-a-store concepts inside Nordstrom at Streets at Southpoint. Allbirds, the hipster sneaker company founded in New Zealand, quietly opened a Charlotte store last year.

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