Why Brick-and-Mortar is Better Than Ever — for Online Retailers

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Why Brick-and-Mortar is Better Than Ever — for Online Retailers

By Greg Zakowicz, Senior Commerce Marketing Analyst, Oracle + Bronto - 08/01/2017

A funny thing happened on the way to the local mall dying. It’s alleged murderer, the e-commerce pure play, discovered the value of a brick-and-mortar operation. These pure plays are finding this opportunity by watching consumer trends, listening to what their consumers want and learning from where their competitors and others have failed.

Amazon is probably the most well-known e-commerce pure play, and the company that brick-and-mortar retailers tend to point the finger at as the reason their stores are struggling. Ironically, pure plays are the ones that are venturing into the brick-and-mortar world. Amazon bookstores currently have seven retail locations open, with six more coming soon.

Jet.com, an Amazon rival that is now owned by Walmart, partnered with the retail store Story in New York City, offering a temporary produce store inside of the Story retail location. While Walmart is not new to the brick-and-mortar world, Jet.com is. It is an e-commerce pure play, which was planning this in-store concept prior to being acquired by Walmart. Online-only retailers such as ELOQUII are experimenting with pop-up stores, and in fact the plus-size brand turned its pop-up permanent following strong customer demand. That’s part of the move to help introduce new customers to the fashion brand with the option to try on the clothes.

Why is this transformation from online to offline happening? Because despite what you hear, there is still a demand for brick-and-mortar stores. In 2016, 92 percent of all retail sales happened offline. If 92 percent of sales are happening in brick-and-mortar stores, why are we so quick to consider them dead? Take, for instance, online retailers Bonobos and Warby Parker. They have opened a slew of retail locations across the United States, even though they carry no products in-store. They have successfully blended the online and in-store experience.

The changing store meets the changing consumer

We’re not going to see a return to the days when a retailer needed to carve up an entire city block to make room for their store. The trend is toward smaller stores. Having a smaller footprint allows for more direct customer interaction, which can enhance the overall consumer experience. Store associates can better control a customer’s shopping experience, and create a human connection between brand and customer. They can listen, engage, and learn about customer wants and needs. They can make recommendations, and answer customer questions or concerns. These are all aspects of the consumer experience that consumers want, regardless of the way they shop.

Consumers obviously like the convenience of online shopping, but they still desire the experience brick-and-mortar stores can provide. The opportunity to touch a product and go home with it, and the physical act of browsing top the list of reasons why people like shopping in-store. In fact, the number one reason they choose to shop in-store rather than online is because of the immediacy of receiving the product.

These are all things brick-and-mortar stores can provide consumers. They can engage, listen and provide immediacy. While retailers such as Amazon have tried to provide these things in an online world, they recognize the human interaction and desire to physically shop are still present in today’s ever-connected world.

E-commerce retailers have an advantage

E-commerce retailers moving into physical storefronts have a lot of advantages, such as existing customer data. When you purchase online you provide a physical address. That gives the retailer powerful information about where to open shop. They know where they have dense clusters of customers. They also have some other critical data points: They know which clusters tend to spend the most – and on what types of products. This gives a retailer the ability to more accurately choose a strategic location and stock it with the kinds of items likely to sell.

Another advantage online retailers have is a clear understanding of what isn’t working today. They can learn from others. They know they don’t have to go big or go home when it comes to floor space. They’ve likely learned that having too much physical inventory can paralyze a shopper’s decision-making process. They can build popular technologies, like free Wi-Fi or touchscreen assistance, into their stores. They can plan, from day one, for buy online and pick up in-store, buy in-store and ship-to-home, and in-store returns for items purchased online.

These are all conveniences consumers expect – and they help to drive in-store traffic.

Is brick-and-mortar becoming better than ever? From a consumer standpoint, it very well may be. Online retailers are in a great position to know what their customers want, and just as importantly, what they don’t want. Because of this knowledge, they are in a unique position to create an engaging consumer experience in the brick-and-mortar world.

 

As a former consultant with more than 10 years of experience in email, mobile and social media marketing, Greg Zakowicz has first-hand knowledge about the challenges facing the retail industry. Now, as senior commerce marketing analyst at Oracle + Bronto, he provides thoughtful insight to the Internet Retailer Top 1000, and is a frequent speaker at e-commerce events.