Kogan eats 'humble pie' and opens bricks and mortar store

Ruslan Kogan, the man who has long fought the "dinosaurs" of bricks and mortar retail with his online empire, has finally joined the dark side and opened a physical store in Melbourne. But he promises that it won't be traditional.

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Ruslan Kogan in the new Kogan.com pop-up store in Melbourne.

Kogan

Online retail tycoon and "Lion King" fan Ruslan Kogan has admitted he's "eating humble pie" with the opening of a new bricks and mortar store in Melbourne, after almost a decade of decrying the "dinosaurs" of traditional retail.

The founder of Kogan.com worked his way up to number 6 on the 2014 BRW Rich List by adopting a no-frills business model, establishing strong trade ties with China that saw his surname stamped on white-label electronics and then sold at discounted prices online. He also earned himself plenty of headlines by espousing the strengths of online retail.

But now, Ruslan Kogan says he was wrong about physical stores, and he's set up a pop-up shop in Chapel Street, Prahran, to prove it.

"While I've often spoken about how the physical retail business model has some advantages and is a sustainable business model if done correctly, I've also said that Kogan.com will always remain online only," he said in a post on the Kogan website. "I should not have used a blanket statement.

"Lesson learned: never say never."

Kogan has certainly been vocal in the past in his criticism of Australia's legacy retailers, whether it's been in saying "the best deals are always available online" or labelling Harvey Norman founder Gerry Harvey as a "bricks and mortar dinosaur."

Indeed, when Harvey Norman took the opposite path to Kogan and went from physical stores into online retail in 2011, Kogan noted that "retailers who try to do both bricks and mortar as well as online will end up stuck in the middle."

But Kogan claims his online store's smart analytics will help the new pop-up Melbourne venture succeed.

"It's not quite a traditional store. It is a pop up, and we are running it differently to other physical retailers," he said.

"We're opening a pop-up store because we have huge amounts of data about the shopping behaviour of our customers that we can use to enhance their experience -- whether they are shopping online or in a store...We also know the conversion rate of every product by location so we can ensure we're only stocking the products most relevant to customers in that hyperlocation."

While "hyperlocations" might not be a laughing matter, Ruslan has made a video to promote the store, demonstrating how cookies, email paywalls and big data analytics work in a physical store.

There's no word on how long the pop-up will stay open, but no doubt Gerry Harvey is keen to remind Kogan that, just like a puppy, retail stores aren't just for Christmas.

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