Well.ca's Erin Young (CMO) and Rebecca McKillican (CEO)
If you think you're seeing an increasing number of your favourite websites popping up as stores in the real world, relax – it's not your imagination. It's a real trend that's actually happening.
Online health and beauty products retailer Well.ca is the latest e-commerce company to expand from its web roots and into the so-called bricks-and-mortar world, with its first physical store set to open in late June.
The 900-square-foot outlet, at the Shops of Don Mills mall in Toronto, is an effort to broaden the business beyond just online buyers.
"We're going back to our entrepreneurial roots and creating what we believe is going to be a unique retail experience," says chief executive Rebecca McKillican. "It's a great opportunity to attract different customers to our brand."
Well.ca, started in 2008, has grown into Canada's largest online retailer of health and beauty products, with a focus on green and natural goods. The privately held company, based in Guelph, Ont., says it has 150 employees and hundreds of thousands of active customers, with revenue growing 40 per cent year over year.
The Toronto shop is scheduled to be open for four months, with the possibility of extension and additional outlets around Canada following.
About 1,000 products will be offered in-store – a sort of greatest-hits collection of the 40,000 items available online. Like other e-tailers that have opened physical stores, such as Montreal-based menswear retailer Frank + Oak and online behemoth Amazon, Well.ca is planning to use its reserves of sales and product review data to predict what customers are going to want.
"We're going to put what we feel is the right assortment of products in, but we're also going to learn from our customers," Ms. McKillican says. "We have the product portfolio to draw on and we have the data so we can tailor it to what people are looking for across the country."
The store will also offer employee-led workshops designed to educate customers about the products on sale, with the idea being to create an experiential relationship versus just a simple transaction.
Staff will also be armed with tablets that they can use to showcase other products available only online, as well as to look up and display information for customers. The technology is being supplied by Tulip Retail, a New York-based company started by Well.ca's original founder, Ali Asaria.
"If you think about some of the other retailers in the health and wellness space, it can be an intimidating experience. We want to have a welcoming environment," says Well.ca chief marketing officer Erin Young.
The move by a growing number of e-tailers into physical stores seems at odds with the recent spate of high-profile closures by several traditional bricks-and-mortar chains in Canada, including Jacob and Danier Leather.
Industry analysts aren't necessarily surprised, however. Combining online data and analytics generated from an e-commerce operation with a physical presence – the so-called omni-channel strategy – is being seen as the future of retail. Online stores are necessary to stock products that consumers are looking for, but physical operations help brands build legitimacy and can end up improving bottom lines.
"The reality is e-commerce doesn't make money," says Jennifer Lee, national retail leader at consultancy Deloitte. "By definition, an omni-channel customer is more profitable than a customer who comes through one channel."
Omni-channel stores, where customers interact with staff who can supplement the in-store experience with digital options, see up to 20-per-cent higher conversions, according to Deloitte. In other words, they see fewer customers leave the store without buying anything.
Having a proper online operation that integrates well with stores is almost as time- and resource-intensive as building physical locations themselves, Ms. Lee says. But with consumers showing that they like to shop online and in stores, both are becoming necessities.
"E-commerce seeds the market and you get pulled into it. It gives you brand reach and you can understand the customer much better than before," she says.