A showroom isn't just for cars and appliances anymore.
As e-commerce becomes increasingly embedded in physical stores, the showroom concept has gained surprising traction among apparel retailers.
On Monday the Canadian-based online men's clothier Indochino announced it will open its 19th showroom on Dec. 14 at the Mall of America in Minnesota. And Indochino is doubling down on the concept with at least 18 more showrooms coming in 2018 in places like Austin, Nashville, and Atlanta with more openings in Los Angeles and New York. The Philadelphia area has a pair of stores.
The showroom format — used by online heavyweights from men's fashion brand Bonobos to eyewear firm Warby Parker — shows how suits are now being sold, especially to millennials. Indochino's showrooms operate by appointments. Instead of inventory, they present over 100 suiting fabric panels and shirt samples. Mannequins showcase the top suits. And customers assume the role of designer, assisted by a salesperson, aka Style Guide, who inputs the fabric and customizations.
Once options are selected, customers are measured, and the finished suit and shirts are shipped to their homes.
Along with the showroom expansion, Indochino chief executive officer Drew Green touted the fact that the retailer is trimming delivery times for an ordered suit from four weeks to three. That's critical because customers today want quick gratification.
" 'Showrooming' is a great way to introduce an online-only brand to consumers," said Christa Hart, senior managing director at FTI Consulting. "The downside is that it still has some of the negatives associated with online today. It lacks the immediate gratification we want from impulse purchases and may not be 'quick' enough for last-minute procrastinators."
Green said the showroom concept works because Indochino pays less rent and has less overhead, which reduces costs for the consumer. Suits start at $399.
"Showrooms actually require less space than a regular store, as we don't hold any inventory," Green said. "We have refined our approach to retail expansion over the past couple years, to the point that our showrooms are able to be self-sustaining, and can pay back in under a year.
"Our showroom philosophy is to guide every customer from start to finish to help them achieve the perfect fit," he said.
His goal: to deliver a million made-to-measure suits a year.
Indochino's strategic partner is Dayang Group, one of the largest suit manufacturers in the world, which provides the brand a production line in Dalian, China, where Indochino also maintains an office and production facility. Indochino has also recently joined forces with a nearby shipping and logistics provider, said Green, who emailed from China.
Earlier this year, Indochino opened the brand's second store in the Philadelphia region — a 4,100-square-foot showroom at King of Prussia Mall – next to Apple and Forever 21. In January 2015, it opened a 2,347-square-foot store at 1606 Chestnut St.
"The decision to invest heavily in physical retail at a time when most were stepping back was bold, but we believed that we could take a different approach and focus on experience as a core value," Green said.
Other retailers are experimenting with the showroom concept. Last month, Simon, the owner of King of Prussia Mall, rolled out a new retail platform at Roosevelt Field in Long Island, called The Edit@Roosevelt Field. It brings together 14 established and emerging brands to launch new products in an interactive and experiential retail space. Merchandise is displayed in micro-retail units ranging from 20 to 200 square feet.
Retail experts say the showroom model appeals to highly coveted millennials.
"The proliferation of the showrooming concept shows how retailers are adjusting to the new retail landscape," said Jacob Cooper at MSC Retail, which handled the transaction to bring men's fashion retailer Bonobos to 1519 Walnut Street. "Next-day shipping options allow retailers to save money on high-rent brick-and-mortar occupancy costs by shrinking their footprints.
"Customers can then simply try a product, like apparel or electronics, without having to carry them around for the rest of the day," he said. "Millennials want to be as efficient as possible, which means a `get-in, get-out' attitude to shopping."
And as for the online superstars, they "still need effective ways to get the end buyer exposed to their product," added Steven H. Gartner, managing director for retail services at CBRE, which brokered the Indochino deal for 1606 Chestnut. "Suits, for instance, are still something that the shopper likes to feel and try on. For every buyer that's comfortable buying online, there are still many others that want to see the goods in a store."