Is the Death of Brick-and-Mortar Retail a Myth?
This article was originally written for Entrepreneur where it was published on September 8, 2014.
The endless headlines about the wheezing death of brick-and-mortar retail—about how Americans are surely barreling towards a virtual world dominated by online shopping— make me want to tattoo a picture of Chicken Little on my forehead.
The sky is not falling despite the following facts:
Ecommerce, which turned 20 years old this year, has captured sizable market share. Recent research by Forrester reveals that not only do about 69 percent of Americans regularly buy products online but these consumers also generally do 16 percent of their shopping on the Internet.
ShopperTrak reported that during the last holiday season, retailers received about half the holiday foot traffic of 2010.
While statistics such as these, especially those citing double-digit ecommerce growth, could inspire a flurry of panic, portend crises, cause tectonic shifts and compel pundits to cluck hysterically, the claim that brick-and-mortar retail is dead is simply ridiculous. In fact, it’s dead wrong.
Brick-and-mortar retail was still a $4 trillion market in the United States last year.
Does that mean that brick-and-mortar shopping is too big to crumble? Absolutely not. Walk through most big-box stores today and find see innumerable inefficiencies. They’re experiencing a radical transformation and undergoing intense soul-searching. They are attempting to best meet the demands of what I label “everywhere commerce.”
Today’s consumers are digital, mobile and physical consumers. They expect retailers to be everywhere as they are. Thus, retailers should be willing and able to adopt technologies, pricing and merchandising to match the desire by consumers to research and buy as they please.
Retailers seeking to successfully survive this transformation should shift their tactics in four ways:
- Adopt omni-pricing and eliminate the price differential between online and inside stores. The days of offering 40 percent to 50 percent off the in-store retail price if the shopper will buy online should disappear.
- Create easy return policies for online purchases. It should be as easy to return an item, no matter the point of purchase, in store or via mail. The post-purchase experience is a critical element when consumers have so many options.
- Define the role of the physical store. Since anything can be bought online, stores must adopt a “wow” shopping-experience strategy to entice consumers to buy when they are in a store regardless of where they researched the product.
- Stop measuring online sales against in-store results. Retailers should track overall sales and learn how customers shop in all stores. Then they should apply what’s working, eliminate what’s not and constantly seek to increase sales and brand loyalty.
And stores should offer some unique experience that consumers cannot get online. Whether it’s the ability to touch and feel merchandise, see how components can fit together or gain expert advice from customer service reps or kiosks, the retail store must offer a compelling reason to exist.
Those who take this advice seriously will continue to flourish and stand as vital members of the market.
For the record, I’ve found a talented tattoo artist. And his parlor, a physical space where he does actual face-to-face, hands-on business, is fabulous.
Image Credit: ©iStock.com/klenger