Brick-and-Mortar Retail: Why DTC Brands Are Expanding

Direct-to-consumer (DTC) brands built their businesses by selling products directly to customers, often through online stores. This approach helped them establish relationships with shoppers without depending entirely on traditional retail distribution. However, as these businesses grow, many are discovering the value of adding physical locations to their sales strategy.

Brick-and-mortar retail gives customers the opportunity to experience products firsthand, interact with employees, and connect with brands beyond a digital screen. Physical stores can also support online shopping through in-store pickup, returns, and other services that make purchasing more convenient.

Brands such as Bonobos, Warby Parker, and Marine Layer demonstrate how online-first retailers have incorporated physical stores into their businesses.

But opening a store involves more than finding an attractive location. DTC businesses must evaluate occupancy costs, customer demand, and the responsibilities that come with commercial lease agreements.

Understanding why brands are investing in brick-and-mortar real estate can help retailers determine whether physical expansion supports their long-term business goals.

What Is Brick-and-Mortar Retail?

Brick-and-mortar retail refers to businesses that sell products or provide services through physical locations where customers can visit in person.

These locations include clothing stores, showrooms, specialty shops, and other customer-facing retail spaces.

Traditional retailers have operated physical stores for decades, but digital-first businesses often approach them differently.

Rather than treating physical locations as their only sales channel, DTC brands may use stores alongside e-commerce websites, mobile applications, and digital marketing.

For example, an online apparel retailer might open a showroom where customers can try on products, receive fitting assistance, and arrange delivery to their homes.

Another business might open a conventional store where customers can purchase products immediately, return online orders, or collect purchases made through its website.

The role of a physical location depends on the brand's products, customer preferences, and operating model.

For DTC companies, brick-and-mortar retail is often an extension of their existing customer experience rather than a replacement for online sales.

Why Are DTC Brands Opening Physical Stores?

Online shopping offers convenience, broad product selection, and the ability to purchase items from almost anywhere.

However, there are aspects of shopping that websites cannot fully reproduce.

Customers may want to inspect products, receive personalized assistance, or complete a purchase without waiting for delivery.

Physical stores can help address these needs while introducing brands to shoppers who may not have encountered them online.

The business value depends on how effectively retailers connect the physical location with their overall customer experience.

The following five benefits help explain why DTC brands consider expanding into brick-and-mortar real estate.

1. Customers Can Experience Products Before Buying

One of the biggest limitations of online shopping is the inability to physically interact with products before purchasing.

Photographs, product descriptions, and customer reviews provide useful information, but they cannot always communicate how an item feels, fits, or performs.

This is particularly important for categories such as clothing, footwear, furniture, eyewear, and mattresses.

For example, a customer shopping for jeans may want to compare sizes, examine the fabric, and assess the fit before making a purchase.

A physical location provides that opportunity.

Store employees can also answer questions and help shoppers understand differences between products.

Turning Product Experience Into Customer Confidence

A positive in-store experience may help customers feel more confident about their purchasing decisions.

For an online-first apparel company, a showroom can provide fitting assistance without requiring the brand to stock every available product at the location.

Customers might try on samples, select their preferred size, and have their purchases shipped directly.

This allows the physical store to support purchasing decisions without necessarily operating like a traditional inventory-heavy retailer.

The right model depends on the products being sold and the level of service customers expect.

2. Physical Stores Create More Personalized Customer Relationships

Digital retailers can personalize online experiences through recommendations, browsing history, and customer preferences.

However, in-person interactions offer another way to understand what customers need.

A knowledgeable store associate can ask questions, demonstrate products, and provide recommendations based on direct conversations.

For brands selling products that require fitting or explanation, this interaction can be particularly valuable.

For example, an eyewear retailer may help customers select frames based on comfort, appearance, and individual preferences.

A specialty skincare business might use its store to provide product demonstrations and answer questions about different formulations.

Building Trust Beyond the First Purchase

The value of personalized service extends beyond a single transaction.

A customer who receives useful assistance may feel more comfortable returning to the brand, whether through the store or its website.

Physical locations can also provide opportunities for events, product launches, workshops, and community activities.

These experiences allow brands to connect with customers in ways that are difficult to reproduce through ordinary online advertising.

However, maintaining consistent service requires employee training and clear operational standards.

A physical store that delivers a poor experience can damage customer confidence just as easily as a well-managed location can strengthen it.

3. Brick-and-Mortar Stores Support Omnichannel Retail

Omnichannel retail connects different purchasing channels so customers can interact with a brand in the way that suits them.

Instead of treating e-commerce and physical stores as separate businesses, retailers coordinate their inventory, customer service, and fulfillment processes.

For example, customers may discover products online, visit a store to examine them, and complete their purchases through a mobile device.

Others may purchase online and collect their orders at a nearby location.

A consistent experience across these interactions makes shopping more convenient.

Buy Online, Pick Up In-Store

Buy online, pick up in-store (BOPIS) allows shoppers to place orders digitally and collect their purchases at a physical location.

For customers, this can eliminate shipping delays and provide greater control over when they receive their orders.

For retailers, it creates another reason for customers to visit the store.

However, the process requires accurate inventory information and clear coordination between online ordering systems and store employees.

Easier Returns and Exchanges

Physical locations can also simplify returns and exchanges.

Instead of shipping a product back to a warehouse, customers may be able to return it at a nearby store.

This can make the purchasing process feel more convenient, particularly for clothing and footwear.

Retailers may also have an opportunity to help customers find suitable alternatives during the return.

The objective is not simply to move transactions between channels. It is to reduce friction throughout the customer journey.

4. Physical Locations Improve Brand Visibility

An online retailer may depend heavily on digital marketing, referrals, and social media to attract new customers.

A physical storefront creates another opportunity for people to discover the brand.

Customers walking through a shopping district may notice a store even if they have never visited its website.

Storefront design, signage, window displays, and the surrounding retail environment can all influence how the brand is perceived.

Reaching Customers in New Markets

A physical store can help an established DTC company introduce its products to shoppers in a particular city or neighborhood.

For example, a brand with strong online sales in a metropolitan area may decide to open a showroom where customers can interact with its products.

The location can serve existing customers while making the brand visible to people who prefer shopping in person.

However, the value of that exposure depends on local demand, pedestrian activity, accessibility, and the store's operating costs.

A high-profile location is not automatically the most effective option.

Retailers should consider whether the surrounding customer base aligns with their products and pricing.

Creating a Recognizable Brand Experience

The store itself becomes part of the brand.

Interior design, lighting, product displays, employee interactions, and customer service should communicate a consistent identity.

For a premium apparel company, the physical environment might emphasize personalized fitting and product quality.

A lifestyle retailer may prioritize a relaxed atmosphere and opportunities for customers to interact with products.

These decisions can help customers understand what makes the brand different from competitors.

5. Physical Retail Adds Another Revenue Opportunity

For an online-first business, physical stores can create additional sales opportunities beyond its existing website.

Customers may prefer purchasing certain products in person, particularly when fit, quality, or immediate availability influences the decision.

A physical location may also generate sales from shoppers who were not previously familiar with the brand.

However, opening stores does not automatically increase overall profitability.

Retailers must account for rent, employee wages, store construction, utilities, inventory, and other operational expenses.

A new location may increase revenue while also creating substantial ongoing costs.

Evaluating Store Economics

Before opening a location, businesses should estimate its revenue potential and expected operating expenses.

For example, consider a proposed store with the following monthly estimates:

Under these simplified assumptions, the store generates $15,000 monthly before corporate overhead, taxes, financing costs, and other excluded expenses.

Actual performance may differ because of seasonal demand, inventory costs, returns, and changes in occupancy expenses.

The important consideration is whether a physical store produces sufficient financial value to justify its commitments.

Retailers should also consider the effects of store activity on online sales and customer retention rather than measuring the physical location in isolation.

How DTC Brands Have Used Brick-and-Mortar Retail

Several digital-first retailers have adopted physical stores to support product discovery and customer relationships.

Their approaches demonstrate that physical retail does not have to follow one operating model.

Bonobos: Personal Service Through Guideshops

Bonobos established itself as an online-focused menswear brand before expanding through physical Guideshop locations.

The Guideshop model emphasizes personal fitting assistance and product selection.

Customers can interact with merchandise and receive recommendations without necessarily following the traditional model of selecting inventory from store shelves.

This approach illustrates how a physical location can support an online purchasing experience.

The store serves as a place for customer service, product discovery, and personalized assistance.

Warby Parker: Making Eyewear Easier to Experience

Warby Parker is another example of a digitally oriented retailer that expanded into physical locations.

Eyewear is a category where the opportunity to try products in person can influence purchasing decisions.

Physical stores give customers access to frames, fitting assistance, and other relevant services.

For a brand operating online and in person, maintaining consistent product information and customer service across channels is important.

The example demonstrates how a physical location can address limitations associated with purchasing certain products exclusively online.

Marine Layer: Extending a Lifestyle Brand

Marine Layer began as a clothing brand with a strong emphasis on comfort, product feel, and casual style.

Physical stores allow customers to experience the fabrics, fit, and overall brand environment directly.

Rather than relying only on product photographs, the retailer can communicate its identity through merchandise displays and the shopping experience.

For apparel brands, this can be useful because customers often want to understand the quality and feel of materials before purchasing.

These examples illustrate different approaches to physical retail. They do not establish that every digital-first business will benefit from opening stores.

What Should DTC Brands Consider Before Opening a Physical Store?

The benefits of brick-and-mortar retail are closely connected to the financial and operational commitments involved.

Before entering a commercial lease, businesses should understand how the proposed location supports their customers and overall sales strategy.

A location with strong pedestrian activity may offer valuable exposure, but that benefit needs to be evaluated against rent and other occupancy costs.

Understanding Customer Demand

Online sales data can provide useful information about where existing customers live and which markets show interest in the brand.

Retailers can combine this information with local demographics, customer behavior, and the competitive environment.

For example, a business receiving substantial online orders from one metropolitan area may investigate whether a showroom would improve service for those customers.

However, strong online sales in an area do not automatically guarantee successful in-store performance.

Store accessibility, customer travel patterns, and nearby retail activity also matter.

For the detailed planning process, see Occupier's retail expansion strategy.

Understanding Lease Commitments

Opening a physical location often involves signing a multi-year commercial lease.

The financial commitment may include base rent, operating expenses, security deposits, and tenant-funded improvements.

Rental agreements can also contain annual escalations, renewal deadlines, and restrictions affecting how the premises may be used.

For businesses entering physical retail for the first time, understanding these obligations is essential.

Occupier's commercial lease agreement guide explains the contractual provisions tenants should review before signing.

The goal is to ensure that the business understands its responsibilities before committing to a particular location.

Choosing the Right Store Format

Not every DTC retailer needs a large conventional store.

Depending on the product category and customer behavior, a business might consider a showroom, pop-up location, or smaller-format store.

A showroom may prioritize product demonstrations and customer service, while a traditional retail store may focus on immediate purchases.

The appropriate format depends on inventory requirements, expected customer activity, staffing needs, and the costs associated with operating the space.

A smaller location may lower certain occupancy costs, but it also limits the space available for merchandise, storage, and customer activities.

Retailers should evaluate these trade-offs rather than assuming that larger stores generate better results.

Why Lease Management Matters as Physical Retail Grows

Managing one commercial property is different from managing an expanding network of stores.

Each new location introduces lease obligations, payment schedules, important dates, and documentation that must be maintained throughout the agreement.

A retailer operating 30 locations may have different rental structures, renewal options, and maintenance responsibilities across its portfolio.

As the business grows, keeping this information organized becomes increasingly important.

Maintaining Consistent Lease Information

Real estate teams need access to executed agreements, rent schedules, amendments, and important contractual provisions.

Finance teams rely on much of the same information for budgeting and accounting.

If departments maintain different versions of lease records, changes may be missed or recorded incorrectly.

Centralized information helps the organization maintain a consistent understanding of its occupancy commitments.

Monitoring Rent and Critical Dates

Retail locations often involve scheduled rent increases and notice requirements for renewal or termination options.

Missing these dates can affect occupancy costs and future business flexibility.

A defined critical date management process helps retailers prepare for important lease decisions before contractual deadlines arrive.

For example, a brand planning to close an underperforming location may need to evaluate termination rights months before the scheduled lease expiration.

Early visibility gives the team more time to make an informed decision.

Connecting Real Estate and Finance Teams

Store expansion creates financial commitments that extend beyond opening day.

Finance teams may need to account for lease liabilities, right-of-use assets, and changes to existing agreements.

Real estate teams may negotiate renewals or amendments that affect those accounting records.

Maintaining consistent information between departments reduces the risk of overlooked changes.

Occupier's lease administration software helps commercial tenants organize lease information and manage contractual obligations across multiple properties.

The appropriate system should support the organization's portfolio size, team responsibilities, and reporting requirements.

How Can DTC Brands Measure Brick-and-Mortar Success?

The value of a physical location should be evaluated using more than store revenue alone.

Retailers may want to understand how the store affects customer acquisition, repeat purchases, online transactions, and operating expenses.

Useful measures include:

These measures should be interpreted together.

For example, a showroom may generate fewer immediate in-store transactions than a conventional store but still influence customers who complete purchases online.

Similarly, a store with strong sales may be less attractive if occupancy and operating costs are unusually high.

The business should establish clear objectives for each location and evaluate performance against those objectives.

As more stores open, consistent reporting can help leadership identify which locations contribute meaningfully to the company's broader retail strategy.

Frequently Asked Questions About Brick-and-Mortar Retail

Why are DTC brands opening physical stores?

DTC brands open physical stores to give customers firsthand product experiences, offer personalized service, increase brand visibility, and connect online shopping with in-person interactions. The value depends on customer demand and store economics.

Is brick-and-mortar retail replacing e-commerce?

No. Many retailers use physical stores alongside their online channels. The two can complement each other through product demonstrations, in-store pickup, returns, and consistent customer service.

What are the benefits of brick-and-mortar stores?

Potential benefits include stronger customer relationships, opportunities to experience products, local brand visibility, and additional sales channels. Businesses must weigh these advantages against operating and occupancy expenses.

What challenges do DTC brands face when opening stores?

Common challenges include selecting suitable locations, managing construction and staffing costs, negotiating commercial leases, maintaining inventory, and coordinating online and physical operations.

How do physical stores support omnichannel retail?

Physical stores provide locations where customers can try products, collect online orders, return purchases, and receive assistance. These services connect digital and in-person shopping experiences.

How should a DTC retailer evaluate a new store?

The business should consider customer demand, the proposed location, expected sales, occupancy costs, staffing, inventory requirements, and the store's role within its existing sales channels.

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