There has been an increasing trend of online retailers making a transition from being exclusively online to establishing physical stores, a phenomenon known as going from clicks to bricks. Frank & Oak is a good example of how this transition can be approached as they have an almost perfectly integrated omni-channel retail strategy. But why would Frank & Oak continue to examine physical real estate options if under 5% of its sales are sold in its physical stores?
Background
Frank & Oak was founded in 2012 by co-founders Ethan Song and Hicham Ratnani out of Montreal. The company makes sophisticated menswear for young professionals and was originally exclusively online. Every one to two months a new collection of SKUs are offered to members who can order the items and have them delivered to their door.
Consumer relationships has been a focus of Frank & Oak’s, but being exclusively online can make it difficult to manage these relationships effectively. A paid-membership option is available, called the Hunt Club, to mitigate the risks of customer dissatisfaction where the customer is able to choose up to three products themselves, or have Frank & Oak’s stylists choose a selection for them based on their customer profile, and they are delivered to their door. The member can then try on the clothes and return any unwanted items free of charge.
The company had been quite successful in its first year and a half, but the Hunt Club’s model was not sustainable any longer due to their growth. Online stores need to also have the physical presence to build the brand and customer loyalty; they need to compete in both online and offline spaces. They experimented with their physical space at their Montreal headquarters showroom and developed their retailing strategy before moving to the offline domain. Frank & Oak polled members as to where they would like to see Frank & Oak pop-up shops and they established just under a dozen across Canada and the United States, opening their Toronto flagship location on October 17, 2014. Other locations in Ottawa and Vancouver soon followed.
Omni-channel Integration
Frank & Oak’s physical space is not focused on sales, but rather providing a place for customers to interact with the brand by experiencing the Frank & Oak lifestyle. Men can enjoy a beverage at the instore cafe, get a hair-cut at the barber, or receive style advice from a stylist and try product. The stores are intended to be community-oriented, a place for people to hangout. Though you are able to buy product at the stores the cash registers are hidden so the customer does not feel pressured to make a purchase.
Their objective is to get the customer familiar enough with the brand that they personally relate to it, increasing the likelihood of online sales. In the store, the customer has access to their Frank & Oak profile with available tablets, able to review purchase history, style preferences, and budget situation so stylists are able to assist them effectively. The same is available on the Frank & Oak app.
Being completely vertically integrated, Frank & Oak has successfully been able to standardize its mobile, social media, online, and physical channels. The same services are available to the customer by any of those channels, creating a personally tailored retail experience that other retailers should strive to achieve.
References
http://www.vancouversun.com/life/fashion-beauty/team+players+frank+puts+people+first/11572234/story.html
http://sprudge.com/montreal-frank-oak-menswear-teams-with-cafe-neve-87733.html
http://thrivingmalls.com/2015/07/01/the-store-as-a-marketing-tool-the-frank-oak-technique/
http://blogs.wsj.com/venturecapital/2014/09/04/frank-oak-raises-15m-to-make-menswear-for-creative-professionals/
http://www.canadianbusiness.com/innovation/most-innovative-companies-2015-frank-and-oak/
https://ca.frankandoak.com/styling
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