How Digitally Native Brands are Reshaping Brick-And-Mortar: SPECS Show 2019

The term Retail Apocalypse has surrounded brick-and-mortar retail over the last decade following the bankruptcies and closings of several large North American department stores and retailers. While traditional retailers are facing an “apocalypse,” there is a revolution with digitally native brands into physical retail spaces.

A Digitally Native (Vertical) Brand is a brand born online with a focus on the customer experience, that unlike typical e-commerce companies, control their own distribution, according to Phase Zero Design recently attended Chain Store Age’s SPECS Show 2019 in Dallas, TX. A key theme of SPECS Show 2019 was that many of these digitally native brands are now seeking brick-and-mortar locations at record numbers, and are thriving.

According to the Keynote Robert Herjavec, CEO of the Herjavec Group, the primary reason these digital brands are thriving is that they have a deep understanding of their consumer. Digital, direct-to-consumer, brands have the opportunity to curate key information about their consumers preference for their brand and their buying habits at large. Using this accumulated data to open brick-and-mortar locations allows for a more tailored user experience for the consumer.


Keynote Kat Cole, President of Focus Brands, touched on how retailers that began in the brick-and-mortar space could learn from digitally native brands through innovation. She pointed out that the traditional retailers who were thriving, were the retailers who were not only embracing change and innovating, but were doing so before their competitors. By taking the time to recognize what consumers want from a retailer in the digital age: convenience, service, quality, etc.; and taking the time to truly understand what consumers are looking for from their brand through investing in market research, traditional retailers can earn an a leg up in the race for innovation.

‘It’s been done this way for years...’ is the most dangerous sentence.
— Kat Cole, President of Focus Brands

While in her role as the President of the Focus Brands subsidiary Cinnabon, Cole’s team experienced first-hand the repercussions of investing in a product before investing in market research. Basing their new product development off of North American food consumption as a whole, people were trending toward healthier food, the product development team developed a lower calorie version of the cinnabon. However, they did not conduct market research of their consumers prior to identifying if it would be successful for their brand, and only after final development discovered that Cinnabon customers would not purchase a lower calorie cinnabon.

This case study shows that understanding your consumers is essential and while digitally native brands have an advantage, traditional retailers can and should invest in market research in order to innovate and compete in the new digital age.

Retail is not dying, it is evolving. Thoroughly understanding the customer and maintaining a close connection with consumers is critical to success. In the age of digital innovation, retailers and digital brands are reinventing the landscape of brick-and-mortar. Retail is becoming exciting and unlike anything we’ve seen before.