It seems that we are continually bombarded with news stories of dying malls, disappointing retail earnings, low stock prices, department store closings and mass retail layoffs. It often seems like one depressing, endless sea of proclamations that traditional brick-and-mortar retail stores are on life support thanks to the rise of e-commerce. And yet, many retailers are investing a lot of time and money in their brick-and-mortar store experience. So just what is going on? Is the bad news just “fake news” or do some retailers know something that others do not?
Things Aren’t Always What They Seem
Things may seem dire and yes, a lot of news has been dismal, but if you peel back the layers, things aren’t quite what they seem in the headlines. According to the US Census Bureau, online retail sales grew 15.2% between the first quarter of 2015 and the first quarter of 2016. That seems pretty high, but if you dig deeper you see that total online sales accounted for only about 8% of all sales in that time frame.
It has been just over two decades since e-commerce hit the internet, and online sales still account for less than 10% of the entire retail market. However, many retailers are going all in on e-commerce while letting their stores continue to fall by the wayside, despite lopsided sales numbers.
Bricks Vs. Clicks
There are numerous reasons why retailers are struggling, and deconstructing them all could be enough material for a Doctoral dissertation. However, one critical aspect that retailers cannot and should not ignore when it comes to improving the in-store experience is the way they think about “bricks” and “clicks.”
The traditional approach is to put brick and mortar stores in a completely different silo than their online store. Online and offline each has its own budget, its own advertising and communications strategy, inventory, etc. Furthermore, the “bricks” tend to be viewed as cost centers. This results in constant obsession over how to cut costs, which ultimately, erodes the customer experience, creating a vicious cycle of lost customers, lost revenue and deep cuts.
However, customers don’t think of retail brands as “bricks vs. clicks.” Every customer has his or her own way of doing things, but today, most people engage in a hybrid of online and in-store shopping before choosing to purchase. A brand is a brand, whether they interact with that brand online or offline. Customers don’t see silos. If retailers took a more integrated approach, and took the time to create a seamless experience for their customers between those bricks and clicks, it would strengthen relationships and lift sales.
Shifting To Bricks AND Clicks Thinking
Retailers that are succeeding in today’s market understand that customers can’t necessarily be lumped into two groups of online and offline shoppers. Everyone is a little bit of both. Retailers that understand this are reinvesting in brick-and-mortar locations as a means of creating a seamless experience for their shoppers. They don’t view their stores as a cost center, but as an asset to the brand.
In many cases, this means thinking outside the traditional box and providing shoppers with something unique, but something useful that they truly want. Popular menswear e-retailer Bonobos,1 recently opened what they call “guideshops” which act like in-person catalogs.
These are storefront locations where men can go and browse clothing in person to see items up close. Shoppers cannot take items home from the store, they still must purchase online, but it allows customers to see what they are getting before they buy.
Similarly, Modcloth, a popular women’s e-retailer that made its name by offering affordable clothing to women of all sizes has invested in a similar model. They have a permanent storefront in Austin, Texas where women can try on clothes in their size (from XXS to 4XL) and then order their choices for delivery to their front door.2
Fresh Thyme,3 a regional, organic grocery chain in the Midwest, recently teamed up with Amazon to offer 1-hour grocery delivery via Amazon Prime Now.4 As a relatively new chain, they needed to make their mark in a big way. They’ve created a unique in-store experience designed to resemble a farmer’s market, but they can also deliver groceries to their customers’ door, something neither a farmer’s market nor a Whole Foods can do. They recognize that many customers’ first interaction with them will be online, and if they provide amazing service, eventually those people will be enticed to come into the store.
Even Wal-Mart, the behemoth of retail is rethinking its brick-and-mortar experience in tandem with e-commerce. Starting in 2015, they made a big push to put fresher food on their grocery shelves, add fresh bakery and deli items to neighborhood market locations, ensure that no shelf sits empty, and to continue to lower prices.5 This comes at the same time the company has made a major play at Amazon Prime’s online business, with Wal-Mart offering free two-day shipping on orders of $35 and up, without any membership fees.6
Despite the headlines, brick and mortar stores aren’t going away. The key to building great relationships with customers is to refocus on those stores and abandon the notion that stores are cost centers that simply bleed the bottom line. By understanding how customers like to shop and what they expect from your brand in a retail experience, you can turn your brick-and-mortar locations into assets that feed the bottom line.