The intersection of Ninth Street, U Street, and Florida Avenue Northwest in Washington, D.C., plays host to a peculiar commercial mystery. The area has rapidly transformed over the last decade into a microcosm of the District’s broader gentrification, its sidewalks lined with custom-made bike racks and sculptural benches. A glassy, recently erected apartment complex called the Shay sits at the southeast corner of this new intersection. Announced by a billboard featuring a wigged woman coyly hiding her face behind a lacy fan, the apartments inside are dauntingly exclusive, with one-bedroom units topping out just below $5,000 per month for little more than 1,000 square feet of livable space. It’s not such figures that baffle, though—similar rents have become common throughout D.C. What’s surprising are some of the stores that ring the building’s base: Warby Parker, Frank & Oak, and the Tie Bar.
These shops are among the first brick-and-mortar outlets of Web-native businesses. The Shay isn’t the only place their stores are located, of course; all have other physical locations in cities around the country—concentrated especially in metropolises like Chicago, Boston, and New York. In fact, several of the companies are aggressively expanding their retail outlets, as are other formerly online-only enterprises. But finding so many of them gathered in one location feels a little like having your browser come to life, each door a tab waiting to be clicked.
The new offline emphasis of these businesses is puzzling because all were originally developed with the intricacies of e-commerce in mind. Eyeglasses merchant Warby Parker, for example, sends its Web customers dummy frames to help counteract the uncertainty of virtual shopping. Frank & Oak, a menswear retailer that launches a new collection each month, offers a similar home try-on program for members of its (not-at-all exclusive) “Hunt Club.” Above all else, it’s this facility at online sales that has elevated these brands. They’ve thrived in part because they’ve worked around the advantages of maintaining storefront locations and because they don’t have to bother with physical shops’ costs and hassles.
So why are they dabbling in real estate now? Frank & Oak senior vice president of marketing Eric Alper demurred slightly when I brought up the common assumption that e-retailers partially owe their success to the low overhead that accompanies a lack of physical locations. Instead, he suggested, the company’s proprietary technology matters more. “I think our advantage over older retailers is that we don’t have legacy systems,” he told me. “As a startup you have no systems, but you can create them and embrace modern technology. We start from cloud computing and we build our infrastructure from the ground up.” Frank & Oak is more lithe than its older rivals, he proposed, because it’s not stuck with clunky inventory-management and point-of-sale systems. The company’s more modern infrastructure better equips it to evaluate consumer interest and move product, regardless of context. In this sense, some benefits of online marketing carry over into offline sales, meaning that there isn’t a radical break between what companies do on the Internet and what they do in their stores.
Other merchants I spoke with suggested that their physical locations complement their Internet presences in different ways. Bonobos, which once sold its flagship pants almost exclusively online, recently opened the 20th of its “guideshops.” These stores carry little physical inventory onsite and are instead designed to help customers zero in on their ideal sizes and fits. Erin Ersenkal, the company’s chief revenue officer, suggested to me that this approach echoes that of the company’s website, giving “every single item … its own opportunity to shine.” By contrast, Frank & Oak’s stores carry stacks of each clothing item, but they also encourage visitors to purchase items from the website as part of their physical transactions.
Though these continuities are clever—sometimes even innovative—they fail to explain why such companies are surrendering their most obvious edge, the economic efficiency of online commerce. Rents in spaces like the Shay—and other high-end locales such as D.C.’s Georgetown, where Warby Parker has another location—are presumably astronomical. And though physical stores may allow businesses more “intimacy” with their customers, as Alper put it, they also require more work for each sale.
These were among the reasons cited by the founders of Gustin—a high-end men’s clothing company that’s found success with an unusual Web-based crowdsourcing model—who told me they had no intention of opening retail spaces. To their minds, “The numbers just don’t add up.” Without multiple leases or retail employees to pay, they’re able to charge less for their goods than they might otherwise. Taking these benefits away would strip the brand—and others like it—of some of its consumer appeal, partly because it would ultimately increase prices.
Whatever their other innovations, price point has long been key to the appeal of the brands that sit at the foot of the Shay. Though none of them are cheap, few of them are especially fancy. Solidly middle-market, Frank & Oak is roughly on par with mall brands like Banana Republic and J. Crew. Likewise, almost all of the Tie Bar’s inventory rings in under $20, solidly undercutting many of its accessory-oriented competitors. And Warby Parker famously keeps the cost of its frames low, especially in comparison to those sold by many traditional opticians. Though these businesses clearly target the upwardly mobile, it’s a safe bet that none assume their average customer can afford a $4,000-per-month penthouse. Why, then, have they set up shop here, of all places?
A possible answer, or at least the beginning of one, may be that these companies actually see physical stores as a necessary, maybe even unavoidable, growth area. The majority of my friends who wear glasses own Warby Parker frames, but according to the Wall Street Journal, the company has yet to turn a profit, despite its seeming ubiquity. Even as its success attracts investor attention—as has that of other businesses in the Shay—it has to find new ways to make itself stand out. Buffered with this capital, they may simply be experimenting to see what works. Different as it is from these smaller companies, something similar is surely the case for Amazon, which recently opened its first retail store in Seattle to widespread public bafflement. But where Amazon may simply be testing the waters, Warby Parker and its ilk may need to actively grow.
From an aesthetic perspective, classing up an e-commerce operation can be a surprisingly difficult affair. The Web offers brands no definitive way to distinguish themselves from one another, at least not to the passive observer. Anyone with enough money to hire a competent user-experience designer can produce the illusion of exclusivity, and any moderately successful brand is bound to see the general style of its site and business model copied in time. In this context, materiality provides a different kind of cachet, one that’s attainable primarily because of the attention these brands have received online. As any Internet journalist will tell you, there’s something magical about seeing your work on the printed page. The more digital our lives become, the more weight such increasingly small slivers of corporeality acquire. This formula holds even when the digital has more reach, more value, and, in the most literal sense, more purchase.
This may be why many of the companies that have set up physical shops have doubled down on their status as lifestyle brands since beginning their expansion campaigns. Visit a Warby Parker store and you’ll discover plenty of frames to try out, but you’ll also find much more. Under one shelf of glasses in their Shay location, the company has placed a few copies of the magazine n+1, accompanying them with a placard that describes the publication as “our favorite literary troublemaker. Good to read, good to gift, good to hide under the bed.” Elsewhere, Warby offers NYRB Classics editions of books by Tove Jansson, Richard Hughes, and others. These, the store’s designers imply, are the books you’ll want to read once you can see well enough to do so. But they’re also, one suspects, the books you’ll want to be seen reading, the ones that will go best with your hip new frames.
So long as they’re opened in a selective, limited way, the physical stores themselves offer a similar prestige by association to the companies that operate them. Like the small handful of floral shirts that inevitably appear in Frank & Oak’s large monthly collections, they suggest rarefied cool without overcommitting to it. Alper told me that Frank & Oak draws on “postal code–level data to identify where we have customers” when deciding where to establish itself in a city. But he also acknowledged that the company is most comfortable opening up locations in “really dense artistic and entrepreneurial communities” that “reflect our passion as a brand.” Obviously these stores are purely about image: The companies clearly do hope to move inventory with them, just as those floral shirts do sometimes sell out. But the elaborate lengths that they go to—Warby Parker’s in-store literary decorations, for example—and the exorbitant rents they’re likely paying go to show how much harder that may be in the real world, however necessary it has become.
The irony of online success may therefore be that it drives the successful offline, if only to distinguish themselves in the increasingly cluttered digital marketplace. While it’s hard to predict whether those making these shifts will prevail, I know this much: Visiting the D.C. Frank & Oak store on its opening night, I bought a black shirt covered with tiny images of foxes. I liked how the Jacquard woven cloth felt in my hand. If I’m being honest, though, I probably would have ordered it from the site anyway.