Nearly half of online footwear, apparel, and accessories brands tracked by Coresight have expanded to physical stores due to rising digital advertising costs
Warby Parker planned to sell glasses online and shake up retailing. Now it's discovered the value of real stores—900 of them, in fact. LinkedIn: Daniel McCarthy and Amjad Ahmad . Mastodon: @carnage4life@mas.to Tweets: @wsj and @trengriffin LinkedIn: Daniel McCarthy : A lot of the premise behind DTC opening stores is to lower CAC, which *must* be the case if *none* of cost of stores is allocated towards customer acquisition. … Amjad Ahmad : Omnichannel retail is a necessity for many online-only startups to continue to scale and, if done effectively, can be a profitable channel that boosts online sales as well. … Mastodon: Dare Obasanjo / @carnage4life@mas.to : The impact of Apple's App Tracking Transparency (ATT) on online advertising has been significant enough to cause DTC brands to open physical stores. — Apple reshaped the entire e-commerce industry with a simple update to their App Store rules. … Tweets: @wsj : Warby Parker planned to sell glasses online and shake up retailing. Now it's discovered the value of physical locations—900 of them, in fact. https://www.wsj.com/... Tren Griffin / @trengriffin : When the on-line CAC gets high, the merchants start renting bricks and mortar. The unit economics must still work at that retail CAC. I suspect a public relations team representing a shopping center industry group is currently celebrating the WSJ swallowing their story idea. https://twitter.com/... https://twitter.com/...
Context & Ripple Effects
Warby Parker built the direct-to-consumer template — and then a generation copied it: after Warby's success, Wharton alone seeded 400+ startups trying to be the next Warby with toothbrushes, bras, and more. The bet was that cutting out retail meant cutting out rent and wholesale margins. What broke the model was the other side of the ledger: as e-commerce's share of US retail slid back toward pre-pandemic levels, paid digital became the only growth lever left — and it got expensive.
The Coresight finding that nearly half of online footwear, apparel, and accessories brands are now opening physical stores is the correction to that arc: the store, dismissed as legacy overhead by the first DTC wave, has been repriced as an acquisition channel that doesn't bill per click. Daniel McCarthy and Amjad Ahmad's framing captures why — stores only lower blended CAC if their costs are genuinely counted as customer acquisition, which most brands' accounting hasn't done.
First-order effects
- Online-native brands like Warby Parker (~900 stores) are converting digital ad spend into leases, directly competing for foot traffic with the incumbent retailers they once bypassed.
- Brands' unit economics shift from variable CAC paid at purchase time toward fixed lease obligations — a trade of flexibility for predictability in acquisition cost.
Second-order effects
- Landlords and shopping centers, which had been converting dark stores into fulfillment space during the pandemic-era closures, regain a tenant class of credit-worthy online brands bidding on smaller footprints.
- Incumbent footwear and apparel retailers now face competitors whose brand equity was built online at scale, compressing the differentiation advantage physical presence used to confer.
Third-order effects
- If the pattern holds, 'DTC' stops describing a distribution model and becomes a marketing label over what are effectively omnichannel chains — the original disruption ends with the disruptors occupying the same real estate they disrupted.
- Customer-acquisition accounting becomes the battleground metric: investors will increasingly force blended CAC disclosures that treat stores as acquisition infrastructure, changing how retail expansion is underwritten.
The trend: Direct-to-consumer retail is converging back toward physical distribution, with rising digital acquisition costs — not consumer preference alone — driving the reversal.