British retailer FatFace last month announced the closure of all 23 of its US stores, shifting to an exclusively online model in the country. With the brand’s physical shops continuing to thrive in the UK, the company joins a host of retailers taking a dual approach. Retail Systems senior reporter Silvia Iacovcich explores the opportunities and risks of a multi-channel model across markets.

In an era where rapidly changing consumer behaviour and digital acceleration go hand in hand, retailers are exploring new ways to boost growth. An increasingly common trend is the introduction of multi-channel strategies, with a growing number of retailers announcing their decision to maintain physical stores in some regions of the world, while switching exclusively to digital channels in others.

FatFace is one example of this expanding strategy. In August, the British clothing brand announced the closure of all 23 of its stores in the US to switch to an exclusively online model in North America. Meanwhile, the retailer continues to maintain a strong physical presence in the UK, where it operates 178 stores.

The move reflects a broader trend among retailers toward a more hybrid approach, combining the expansion of online operations in one region with the deepening of physical retail in another, or vice versa, to boost growth in different markets through a variety of strategic approaches.

FatFace joins the likes of eyewear brand Warby Parker, which has over 200 stores across the US, but operates digitally in the rest of the world. Footwear brand Allbird also physical shops based in the US and the UK, whilst keeping sales in other markets available online. Cosmetics company Glossier operates 13 stores, only one of which is outside the US in London, with the rest of its trade happening online.

While a dual strategy offers advantages for international retailers, a delicate balance of interconnected strategies is necessary for them to align digital growth and physical expansion without making missteps that would undermine success.

Consistency between the physical world and the online world

Grace Lenihan, account director at marketing agency The Bigger Boat emphasises that for long heritage retailers who are transitioning to a dual approach, it is essential to maintain a consistent identity in both the physical and online worlds. In the case of FatFace, which has been selling in physical stores since 1993, it is essential that the brand finds a way to translate the sensory richness of in-store shopping into the digital world.

“The narrative around the ‘death of the High Street’ often overlooks how in-store experiences drive brand discovery and emotional connection,” Lenihan stresses.

According to the retail specialist, it is essential that FatFace’s revamped strategy – alongside other retailers that have taken a similar approach – can reproduce the same sense of trust, quality and community that characterises the physical world across online too. This means investing in high-quality digital content, engaging storytelling and interactive tools that mirror the in-store experience.

“With a brand transitioning to a truly omnichannel experience spanning multiple regions around the world, any online content must not only inform but also continue to evoke the emotions and sensations historically associated with the brand, compensating for the lack of direct contact,” she explains.

In order to achieve this, such brands should continue to leverage physical stores as hubs for effective and engaging activations, to create a balanced and engaging customer experience.

On the other hand, the online strategy should prioritise high-impact digital content that communicates the brand's values, such as its commitment to sustainability and ethical sourcing, making the brand's purpose and quality as present and powerful as a physical footprint would be, Lenihan notes.

“By focusing on these elements in online storytelling, brands like FatFace – attempting to leverage online and offline connections – can build long-term brand loyalty that transcends a single region,” Lenihan explains.

Operational complexity: two models, one infrastructure

While storytelling is essential for maintaining consistent brand identity, operational efficiency also plays a key role in ensuring business continuity for brands that require sophisticated workflow capabilities in multiple channels.

Vineta Bajaj, chief financial officer (CFO) of the Holland & Barrett group, warns that a lack of operational consistency for brands such as FatFace could expose retailers adopting a dual strategy to a greater risk of failure.

Holland & Barrett currently has 1,600 stores across 19 different countries covering Asia, Europe, India and the Middle East, with both a physical and some form of online presence across all the regions it serves. For example, in Saudi Arabia, while the company does not have a standalone website, it sells its products through the online marketplace Noon.com.

To avoid hiccups during a dual strategy process, the company’s CFO stresses the importance of investing strongly in technology and order fulfilment, integrating platforms that bring together inventory management, customer data and order tracking across all markets.

Julian Skelly, managing partner at consulting company Publicis Sapient, agrees with this view. While for online marketplaces, success depends on e-commerce maturity, last-mile logistics, and localisation capabilities, physical marketplaces require careful real estate planning, an understanding of the local economy, and competitive analysis, he explains.

Because of this, a technology infrastructure that supports both channels operationally is crucial, Skelly notes. This includes a point-of-sale (POS) system integrated with the online commerce platform and a customer relationship management (CRM) system that captures data from all touchpoints.

“To be effective, multichannel retailing truly requires systems that provide a single, real-time view of data,” explains Skelly.

Adaptable supply chains

Managing two separate yet interconnected operations in different regions also requires a highly efficient and adaptable supply chain, Skelly adds.

With a more sophisticated order fulfilling and logistics strategy, the back-end supply chain operations will be more complex.

Due to this, Skelly notes that brands such as FatFace will need effective order orchestration for efficient running, as operations will generate large quantities of data, which will need to be collected, analysed and acted on to deliver competitive advantage.

“Without integrated systems, you’re essentially running two disconnected businesses,” Skelly notes. “The overheads double, customer frustration rises, and brand consistency will suffer.”

Understanding consumer behaviour and boosting satisfaction

And then, of course, there’s the consumer.

“Understanding the consumer is a primary challenge for businesses going dual,” Holland and Barrett’s Vineta Bajaj says.

Regions where shoppers prefer a tangible experience and value an in-person service are ideal for physical retail, while areas with tech-savvy populations are better for e-commerce.

“Shopping habits vary by region and physical retail fares well where shopping is a social or recreational activity, where consumers enjoy browsing, touching products and interacting with staff,” Skelly explains.

Once again, consistency remains key for a successful customer service, explains Bajaj.

“Whether someone walks into a store or clicks onto the website, the tone, service levels, and visual identity should all feel connected,” she explains.
However, she warns that leaning too far into either side of the model can backfire: “Over-investing in physical leads to high costs, while a digital only strategy risks losing the personal touch that drives in-store conversions,” she says.

Successful brands are those who find balance and stay flexible.
“To help with the process, scaling support teams while introducing tools like live chat can help replicate the reassurance shoppers often get in store,” she notes.

Bad examples teach lessons

There have been examples in the past where retail expansions have failed due to inadequate localisation and missteps in digital.

Walmart's exit from Germany in 2006, for example, is a cautionary tale, marked by a failure to adapt its model to local consumer expectations and corporate culture, explains Skelly.

According to Matt Hildon, EU retail director at digital media company Valtech, companies such as FatFace could risks falling into a trap that has previously sunk brands like Topshop and Paperchase – retailers that had strong physical presence but failed to keep pace with online innovation.

As FatFace transitions to an online-only model in the US largely due to financial pressures and operational challenges, Hildon warns that going online is not necessarily a cure for failing stores.

“Cutting physical stores and shifting to online-only might save money at first, but if this transition isn’t carefully managed, they could become another forgotten brand,” he explains.

On the other hand, the strategic benefit of pursuing a multi-channel approach is the potential for stronger brand awareness across a wider catchment, Skelly notes.

With consistent brand messaging, visuals, and customer service standards in different regions and across both channels, companies can reinforce the brand with each interaction.

“A physical presence can boost brand credibility and trust, and we see online-only brands such as Amazon recently experimenting with this,” he concludes.
In a market that is fast becoming increasingly fragmented, retailers operating across online and physical channels in different regions must prioritise a sophisticated operational strategy and high-level storytelling that can help deliver a consistent and engaging brand experience across their multi-channel strategy.

When implemented successfully, a hybrid model such as FatFace's could unlock new levels of growth and resilience, especially when supported by a robust technology infrastructure and a clear sense of brand purpose.

Retailers who embrace this complexity with strategic clarity and cultural sensitivity while keeping their identity intact across all channels are more likely to thrive in an evolving landscape, avoiding the risk of becoming the next cautionary tale..

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