Stores are like an inexpensive billboard

Digital customer acquisition costs—which include Google and Facebook ads, paid search and content creation—are up nearly 50% over the past five years, according to ProfitWell, a software maker that helps subscription companies with customer retention and pricing.

“The costs are going up because there are more brands spending more on digital marketing,” said Patrick Campbell, ProfitWell’s chief executive officer. He expects costs to rise further as companies including Apple Inc. and Alphabet Inc.’s Google move to restrict the use of cookies, coding that helps marketers track people’s online movements.

Some of the new stores are coming from brands that got their start online and say they now realize the importance of having a physical presence. Inc., which already operates physical book stores and grocery stores, plans to open department stores where shoppers can try on its private-label clothes and some national brands in technology-fueled dressing rooms.

When Chris Riccobono started online shirt brand Untuckit LLC in 2010, he never thought he would open physical stores. “At that time, people were saying stores would be gone,” Mr. Riccobono said. Then, prospective customers started emailing him, saying they wouldn’t buy his shirts unless they could first touch them and try them on.

Today, the brand has 88 stores and plans to grow to 150 locations over the next two to three years.

“We don’t look at the stores and e-commerce as separate,” Mr. Riccobono said. “Bricks-and-mortar is an extension of our online business. We get a bump online within a 10-mile radius of each store we open. Stores are like an inexpensive billboard.”