When it comes to Online...what's old is new again

I found an interesting article in the WSJ that stated that Web based retailer are moving toward brick and mortar retail stores after they have reached a certain degree of success. The example they give is Casper the online mattress company partnering with Target stores. The strategy for Casper was initially to target millennials online with smart video ads and traditional advertising and in of all places, subways.

A similar strategy was employed by Warby Parker their co-founder Dave Gilboa said “E-commerce is taking share but it’s doing so more slowly than I think we thought when we launched,” Mr. Gilboa said “If we were just to focus on online at this time, we’d only be able to address about 3% of the overall eyewear market.”

With higher than expected online ad spending, brick-and-mortar retail looks more appealing than before, despite the added costs that come with it. Ben Lerer, an early-stage investor in numerous retailers including Casper and Warby Parker, said “that three to five years ago there was a gold rush of direct-to-consumer companies that bought cheap online ads, largely through Facebook. Now it’s gotten harder”. On Google, he said “a rush of new competitors and imitators have pushed up the cost of an ad that appears alongside the result of a search for mattresses”

I myself am somewhat surprised that the online market place is getting so expensive and competitive that physical space is become attractive again.