You’re probably already aware that in-person retail shopping and online shopping are becoming increasingly intermingled.
IKEA allows customers to browse products online, visualize them with augmented reality, and pick them up in-store for the full experience. Apple lets you research products online, book an in-store session with an expert (Apple Geniuses), and leave with your purchase—all within an hour.
While Apple and Ikea are fully-integrated stores (you can only legally purchase their products directly through them or official suppliers and they only sell their own products), you’ve probably heard of a growing number of ecommerce brands using in-person retail to give their products more exposure.
Some modern ecommerce products with the hybrid retail models include:
Oura ring (Through Best Buy and Target)
Stanley (Through Target)
Instant Pot (Walmart)
Brands that can pull off this hybrid model today are ahead of a trend. For the past decade, retail seemed to be losing out to online shopping. But as the internet has become saturated with increased competition, a physical presence has become one of the only ways online brands can stand out.
A hybrid online and retail partnership provides foot traffic, exposure to new customers, and an additional channel to showcase your products. It’s also a great way to build credibility—being featured in a well-known retail store can enhance your brand’s reputation. However, working with retailers requires careful planning.
For smaller ecommerce businesses, introducing a hybrid retail model may seem intimidating. You might be wondering how to connect your online store with a physical presence or how to handle inventory and logistics.
At OTW Shipping, we have experience helping DTC ecommerce businesses like yours access retail channels. In this guide, we’ll help you decide if this channel is right for your business, how to connect your online and offline channels, and how to find the right retail partner. Let’s dive in.
How to Know Your Business Is Good for Hybrid Retail
Not every product needs to get on the shelves. Most big retailers come with pretty stringent requirements to be in their stores and often push large fees for placement in their prime shelf spaces.
Here are some types of products that commonly benefit from retail:
Tactile Products: Do your customers need to touch, try, or see your products in person? This is common with clothing, furniture, or luxury items. Adding a physical retail option could boost appeal.
Products with Broad Appeal: If your products have proven demand and big single unit price tags (things like home goods or electronics) offering both online convenience and local availability can increase sales.
Customizable Products: Selling personalized or customizable products? Customers may want to design online but see samples or discuss options in-store.
Low-Value, High Shipping Cost Items: For items like canned beverages, it can be very hard to maintain margin with shipping costs being so high.
If this sounds like your business, hybrid retail could help you improve sales, customer satisfaction, and loyalty.
How to Find a Retailer Willing to Work with You
So you have a feeling you want to get involved with a retailer, just how do you go about getting on shelves?Mom and Pop Shops, Boutiques, Bars, and MoreFor starters, you can reach out and even visit local venues that may sell products like yours. It’s a great way to get local brand interest spurned up and grow a following that gives you more traction to go national.
You can also reach out directly to companies outside of your local area that may have you in contact with the owner who can make decisions fairly quickly. Having a wholesale section on your website can help you bring traction by running ads specific to business owners as well.
You can also utilize specialized wholesale platforms, like Faire, that connect retailers and brands for B2B-style transactions.
Big-Box Retailers
Now, when we’re talking about big-box retailers, we mean national chains like Nordstrom or Dillard. Many of these stores have extremely specific requirements for product presentation, labeling, and fulfillment. You’ll need the operational capacity to meet their demands for deliveries and inventory levels. Not to mention most businesses like Target have a whole ethical conduct code to follow for your internal operations.
We also managed to scare up Best Buy’s partner requirements as well as Dick’s Sporting Goods. These have many similarities to Target.
Retailers may also seem like they have a straightforward online application process but it’s not usually that simple. You’ll need to contact a retail buyer and build a relationship with them if you really want to get into a specific retailer.
What are retail buyers and how do you contact them?
Retail buyers (also called purchasing agents) are the employees who vet and purchase third-party products to stock. Their job is to go to trade shows and monitor online trends to find new and interesting products that might sell at retail locations.
All potential sellers need to get in touch with a retail buyer before they are able to sell in stores. If you’ve been doing your online marketing correctly, they might start reaching out to you long before you decide to start looking.
It is somewhat difficult, by design, to meet and form close relationships with any one retail buyer. Retailers frequently rotate which product areas one buyer will cover to prevent them from creating close relationships or receiving kickbacks from any one supplier. The retail buyer for sporting goods one year may be the buyer for kitchenware the next.
You can generally contact retail buyers by:
Going to trade shows
Directly asking a retailer to connect you with them
Connecting with them online through sites like LinkedIn
Connecting with a 3PL that has contact with them
How to Integrate Online and Offline Channels
As you can see from the above, the big complication you’ll face once you’ve secured interest and a contract with a retailer is trying to get your current system to line up with whatever system your desired retailer wants to use.
At Best Buy, for example, they expect you to modify your payment system to Western Union transfers if you want to get on their shelves. Also, for most retailers you’ll also need to link up with EDI (electronic data interchange), a system they commonly use to process orders.
With time, you could theoretically figure all of the processes for integration out yourself. However, the amount of time and money required would likely be prohibitive. Inevitably, you’re going to need to either hire someone to your team with retail experience or find a 3PL partner who can help you manage both sides of the relationship.
What internal roles you’ll need to work with retailers
Retailers are not fully automated experiences and likely never will be. They also require partners willing to spend a significant amount of time maintaining the relationship and staying on top of any new contractual provisions they require. Most relationships require high involvement from your business in both operations and human resources.
This is why you’ll often want to work with a 3PL if you’re planning to start working with retailers. They can worry about meeting your retailers’ delivery needs and operational capacities while you worry about sourcing and marketing your product online.
How to Finding the Right 3PL For Your Hybrid Retail Strategy
Before looking for a 3PL you’ll likely want some idea of which retailer you want to operate with first as each one will have different fulfillment requirements.
If you’ve already contracted with a 3PL, you can still make it work but you’ll want to make sure that they have the following:
Retail Compliance Expertise: Your 3PL should be able to handle advanced shipping notices (ASNs) to meet retail standards.
Adjustable labeling and packaging rules: Your 3PL should already have or be able to adapt to the requirements of your chosen retailer(s).
EDI: As mentioned above, this system processes orders with major retailers like Walmart or Target. If your 3PL can’t integrate with an EDI provider (such as SPS Commerce), then you can’t work with a significant number of retailers.
At OTW Shipping, we specialize in helping businesses like yours bridge the gap between online and in-store shopping. From inventory management to seamless fulfillment, we’re here to help you succeed.
Let’s make hybrid retail work for you. Contact us today and start transforming your business.
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