Week 10: Physical Stores and Virtual Brands

Online brands have carved spaces online for themselves and created thriving marketplaces over the past couple of decades, and there are more options than ever for a brand to set up virtual shop and create a following for their work. Even a couple years ago, people were not as dedicated to brands that were not local or chains. However, with a growing market comes a growing threat: advertising costs rising. As more eyes are on webpages, the more a brand will be forced to pay for screen space. However, as a New York Times article from March 23, 2022, sums up in a title, "Online Brands Try a Traditional Marketing Strategy: Physical Stores."

The article covers a few online store-owners and their explorations in short-term and long-term physical locations, and how physical stores allow the "customer acquisition cost" to be wrapped up in the cost of the building, whereas the "cost of acquiring customers through social media advertising 'has become prohibitive,' said Michael Brown, a partner in the consumer products and retail practice at Kearney, a consulting firm."

While the finances of a physical space allow more flexibility, especially as landlords are allowing percentages of sales as opposed to fixed rates, I believe the pandemic has done more than just increase the price of advertising. Physical locations are going to become more popular simply because people like to go outside and do things with other people. While online shopping will always have its place at the market table, the majority of people will want to go to the store and browse and have a tactile experience if they have the option to.