A new crop of digital businesses is going physical and seeing results

A new crop of digital businesses is going physical and seeing results
This sums up the divide between brick-and-mortar retailers and online businesses led by the likes of Amazon over the past few years.

Recently, though, the digital-physical divide has blurred, as traditional retailers have embraced online selling like never before. Discount behemoth Walmart, for example, boasts the second-highest internet sales in the U.S.

It works the other way, too, as more and more online retailers are deciding that digital-only is not the best strategy. Theyve discovered that even in todays digitally-mediated world or maybe because of it tangible interactions with products and brands can lead to better engagement with customers. As a result, digital retailers are increasingly creating physical presences to more effectively reach their consumers and drive sales.

Pop-up locations can help bridge the gap

An example of this is mattress seller Endy Sleep. The Toronto-based company established itself as a made-in-Canada manufacturer of high-quality mattresses at a fraction of the price of comparable big-name brands.

A key part of its value offering is factory-to-home, same-day delivery, backed by a 100-day, money-back guarantee. But Endys mattress in a box has not proved to be enough for a sizable portion of its potential customer base people who need to interact with the product firsthand.

We found that there is an appetite for customers to actually come in and try out the mattress before they go and invest $750 for a queen, explains Aashish Nathwani, Endys marketing director and co-founder.

As a result, Endy set up a showroom adjacent to its head office in downtown Toronto. Not only can potential buyers have a real-life trial of the companys premium memory foam mattresses, but they also get a taste of the digital companys culture. It is a great experience for customers as they can see how our team operates, he explains.

The Toronto showroom has proven so popular that the company recently opened a pop-up Endy store in downtown Montreal for a 30-day period. As with the Toronto location, the retail outlet was in the middle of that citys furniture design and retailing hub.

It was really designed to give a new audience, people who couldnt come to our Toronto showroom, a chance to try out the product, says Nathwani.

The temporary location provided a noticeable lift in the market in terms of people visiting the store, clicking on the website and, ultimately, sales.

It was a great brand awareness tool as well, he adds. For those who hadnt found us online, it was an opportunity for us to see them on the same playing field as your traditional mattress retailers.

For Nathwani, the digital retailer, watching customers buy mattresses the old-fashioned way in the Montreal location was a different experience. For me, there was satisfaction that somebody could walk into the store and walk out with a mattress and seeing a king-sized mattress go into a Honda Civic.

Endy is now thinking about debuting pop-up locations in other cities across Canada.

A savings account with a side of coffee?

Direct bank Tangerine (formerly known as ING Direct) is another digital-based company that is carefully dipping its toe into the physical realm. The bank operates five Cafs in major cities across the country that allow existing customers to learn about the products and interact with employees in the flesh. Would-be customers also get a chance to know the Tangerine culture.

Our Cafs are not branches in the traditional sense, but are really a way for us to have that physical presence in some of the busiest cities across the country, says Tangerine spokesperson Cayley Kochel. They provide new customers with a place to drop in and learn a little bit more about our direct bank, and also current Tangerine clients can speak to one our associates about their everyday banking.

Those Caf locations serve as the organizing centres for the banks charitable endeavours, most notably its Bright Way Forward national sponsorship and community investment platform.

Having that physical presence in each of the cities really allows our teams to work with our local partners on the ground to help deliver that program, says Kochel.

Since last year, Tangerine has also opened a series of pop-up locations across the country for six to 12 month appearances.

Sharing many of the stylish attributes of the Cafs, the pop-ups are noteworthy because they are state-of-the-art shipping containers that, naturally, can be transported anywhere they are needed across the country. They serve primarily as massive tangerine-colored billboards for potential new customers.

We often say they are for people who need a little extra nudge to discover what direct banking is all about, Kochel explains.

As well, Tangerine operates two in-mall kiosks in Montreal and Quebec City that similarly serve to sign up new customers. Plans are to add more kiosk locations in the future.

Despite its expanding physical presence, Tangerine intends to remain a digital-first bank.

We are absolutely a direct bank first and we make it easy to sign up no matter where you are, Kochel says. I would say these physical locations are a complement to that, a way to be involved in the community and to provide an in-person touch point.

Mixing physical and digital makes a greater impact

Offering touch points can have important applications beyond retail. In the world of marketing, for example, marketers are increasingly realizing the benefits of employing both physical and digital media to reach and persuade customers.

Research from Canada Post shows that integrated direct campaigns elicit 39% more attention (time spent) than single-media digital campaigns. In fact, integrated direct mail and digital campaigns prompt 8% higher brand recall than single-digital campaigns; integrated campaigns also trigger 5% moreemotional intensity than digital-only campaigns.

Its just another example of something companies like Endy and Tangerine are discovering: bridging the gap between digital and physical can make the impact real for your business.
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