How Brooklinen is building out its physical retail operation
Currently, direct-to-consumer bedding and home goods startup Brooklinen only has two stores, both in New York City. But by 2024 to 2025, the home goods brand hopes to have 25 to 30 locations. In order to meet that ambitious goal, Brooklinen is first focused on laying the foundation to enable it to scale its physical retail in the years to come.
At the Modern Retail DTC Summit held in New Orleans this week, Josh Illig, vp of retail at Brooklinen, said “there is nothing that can replace the touch and feel you get in-store.” He joined a bevy of other direct-to-consumer leaders who spoke onstage about their business strategies and the business trends they’re observing.
Illig said that more so than ever, customers want to buy products “when they want it, where they want it, how they want it” — making stores an important part of a brand’s business.
“When we open a physical location, we see a bump in e-commerce sales in that area,” Illig said. He pointed to several insights that stores help provide, including customer behavior and market-specific product preferences. Furthermore, there is also an opportunity to have those store visitors become online consumers.
This is why the company is tripling its shop count in the first half of 2022. Within the next few months, Brooklinen is opening four new stores: in Los Angeles, Philadelphia, Portland and San Francisco, bringing its total to six national locations.
Here is how the direct-to-consumer brand is going about the expansion:
A “slow down to speed up” store opening approach
For a DTC-first brand, opening retail stores is a major undertaking that requires years of investment. A cohesive strategy that puts the brand’s value proposition at the heart of the stores is required, Illig explained.
The company will first open six stores in quick succession by summer. Then, plans on “pressing pause” to learn the differences between the different locations and geographical markets. It’s what Illig calls a “slow down to speed up” expansion strategy. “With these six stores, we’ll have a variety of locations of city centers and suburbs [to compare],” he said.
Early testing helped the company gauge what corridors would work best for a bedding store. For instance, Illig noted that the company first did a popup in New York City’s Soho neighborhood. “Being in a touristy area didn’t necessarily serve us,” he said. Since then, Brooklinen has opened its two current permanent locations in residential neighborhoods: Brooklyn’s Williamsburg and Manhattan’s West Village.
“We’re looking for all our stores to be profitable,” Illig said – both from a real estate and merchandising standpoint. For Brooklinen, some of the digital-first retail services include buy online, in-store pickup and curbside pickup. “We’re not a showroom, we want people to come in and take products home,” he said.
Balancing people and store count growth
Given current conditions, there are other factors that may impact a brand’s ability to quickly scale its store count, such as real estate availability and hiring in a competitive market.
For this, Brooklinen assessed its existing e-commerce data to gauge which markets to add next. High demand in Los Angeles, for instance, was an obvious choice. From there, “we line it up with what’s available in real estate today,” Illig said.
“There are some really great spaces out there, but in some cases you have to wait it out,” he said of leasing commercial space. “It’s also about being comfortable saying ‘no’ if a location doesn’t feel right at that moment,” Illig said.
For many retail brands, hiring a solid retail team is key to running profitable stores, Illig said.
Illig pointed to the competitive hiring markets, and how they differ. “When we were hiring in San Francisco, it was more difficult than in Philadelphia,” he said. Thus, the company created a process that has the retail team start to source store managers six months before the store opening date.
To stand out in a competitive hiring market, Illig suggested that brands first focus on building a company culture where people want to work. Ultimately, Illig said, “candidates are looking for high-growth companies they can see themselves growing with,” — whether it be potential career opportunities or being an influential part of the business. “When we onboard new team members, their training is held with different people throughout the company,” Illig explained.
Getting those first retail hires right is critical, because brands like Brooklinen depend on their retail associates to sell the company story in stores. “We want to create an experience to showcase more than just sheets,” Illig said.