With more direct-to-consumer fashion companies transitioning into physical retail as they move toward an omnichannel approach, clusters of DTC stores are popping up throughout major cities like New York, Chicago and Los Angeles. In New York City, you’ll find these DTC neighborhoods in the West Village, side streets in Soho, pockets on the Upper West Side and now North Williamsburg.
Where you once found one or two DTC stores popping up in a neighborhood, customers can now find whole streets lined with brands like Naadam, Everlane, Warby Parker, Brooklinen and Buck Mason. Some are flocking to areas where rent is cheaper, while others are looking for smaller square footage in more popular shopping destinations like Soho.
The concept of a DTC neighborhood isn’t all that surprising, considering a lot of these companies have similar customers who live and shop in the same areas, said Jon Levy, vp of brand management at Leap, a retail-as-a-service company helping digitally native brands open storefronts. It’s only natural that they would then open retail stores in locations where their customers already spend time.
“People who shop digitally native brands look similar,” said Levy. It’s a lot of older millennials without children and more disposable income to spend on these brands, he said. “The category might change — clothing, home furnishing, menswear — but these digital brands attract similar shoppers, all looking [to support brands offering] a bit more of a personal connection and at a more accessible price point. Now these digital brands are coming to the same place because their shopper is very similar,” he said.
Leap owns a strip of five storefronts in the West Village, all within steps of each other on Bleecker Street. Naadam, Thakoon, luxury menswear company Ledbury, men’s leisurewear brand Public Rec and men’s essentials company Goodlife have all opened stores with Leap between 330 Bleecker Street and 400 Bleecker street in about the last year. Other DTC-first brands like shoe company Margaux and Huckberry line Bleecker Street, as well.
“Clustering is natural in every industry. It’s why we see cool restaurants crop up around each other, new car lots on the same streets — and DTC is no different,” said Aaron Schwartz, vp of business development at Returnly.
For certain neighborhoods, like Williamsburg, the storefront can be more affordable than other Manhattan neighborhoods. That was the case for Brooklinen. The company, which expanded from bedding into loungewear in July, is opening its first permanent location in Brooklyn by the end of the year, after doing a four-month pop-up in Soho at the end of 2018.
“You pay a high premium to be in a main NYC shopping district, because of the volume of foot traffic you are getting,” said Vicki Fulop, co-founder and CCO at Brooklinen. “Of course, rents anywhere in NYC are high, but we learned from our four-month pop-up in Soho that a lot of our customers were purposely seeking us out and coming directly to the shop, not just passing by and popping in. So, it makes more sense for us and our customers to be where many of our customers are already residing.”
The company found by looking at online sales data that a lot of customers lived in the Williamsburg area. Plus, the company was founded in Brooklyn and a large number of Brooklinen’s internal team live there. While Fulop said the company hopes to one day open a permanent store in Manhattan, Williamsburg is the perfect starting point.
“When brands are starting to look at e-commerce data, they see where their customers live and shop. Brands have the billing zip codes, shipping zip codes and IP addresses where people come from,” said Levy. They’re able to make informed decisions about what neighborhoods to open doors in based on that data.
Brooklinen is not the first DTC brand to open its doors in Williamsburg. Everlane opened its largest store a few blocks south from Brooklinen in September. This was the company’s second location, after opening a space on Prince Street in Soho in 2017. Everlane declined to provide comment. The company’s Williamsburg store is near a Warby Parker, Buck Mason, Aurate and soon-to-open Parachute.