How DTC Brands Are Going Physical Without the Overhead

Historically, creating a retail store required a team of experts to successfully open tens to hundreds of stores and manage real-estate deals, construction,  visual merchandising, merchandise planning, operations, and sales. When modern Direct-To-Consumer brands plan only to open a few stores, acquiring a team of experts is not feasible. Recognizing this untapped market led to the creation of ghost-retailers such as Leap and Uppercase. The former describes itself as "the retail platform for modern brands" which allows e-commerce brands to open beautifully designed, fully staffed stores in premium locations in a fraction of the time and with less risk. The latter provides a similar service and has worked with companies like Knix, Brooklinen, Gymshark, and Mejuri. 

In 2021, Leap expanded from 12 stores to 50 with plans to operate 250 properties by the end of 2022 - an additional 400% growth. The Platform has more than 20 million shoppers on file amongst its brands, including PACT, Naadam, Something Navy, Mack Weldon, ThirdLove, and Frankies Bikinis. When opening new locations the Platform takes a local clustered approach, its stores are in prime locations, often on the same block, like Bleeker St. in NYC and Abbot Kinney Blvd in Venice. This model reduces risks for landlords and brands while allowing the Platform to secure lower prices than if the brands opened one location at a time. It also gives partner brands a sense of community and support while providing the added benefit of alleviating staffing shortages. Since Leap employs sales associates, not the brands, and all Leap powered stores use Shopify as a point-of-sale system, staff from one store can cover shifts at another if needed. 

Outsourcing retail operations allows brands to reach new customers, capture real-world insights, have an omnichannel presence, create fully immersive retail stores, and build their brand without traditional risks, barriers to entry, and liabilities. "Stores are core to our strategy for building our brands and driving overall growth," said Matt Scanlan, CEO of Naadam and Something Navy, in a statement. "But developing and managing the complex infrastructure required for physical retail isn't where we want to invest. By leveraging the Leap platform for stores, we can scale more rapidly with more flexibility and less risk, all while focusing on what we want to be best in the world at—creating awesome products and deepening connections with our customers." 

Scanlan recently shared his plans to build "the next LVMH in the U.S" with little-known Naadam Collective, self-described as "a hold co. for next-gen direct-to-consumer brands." The group comprises six brands, with the seventh set to close by the end of the month, many of which utilize the Leap Platform. Leap and Scanlan's Naadam Collective are redefining the physical retail landscape, while consumers and industry professionals are none the wiser.

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