From Clicks To Bricks: Exploring The New Trend Of Retail Store Openings
January 4, 2020
Consumers now possess the power to purchase nearly any product on the market by clicking a couple buttons on their computer or smartphone screen. Everything that would have required shoppers to leave the house a decade ago can now be delivered to their doorstep, sometimes within hours of the order being placed.
This has created a recurring theme in the business news cycle — is e-commerce the death of brick-and-mortar retail? Perhaps counterintuitively, the exact opposite seems to be true.
No, E-Commerce Is Not The Death Of Retail
There are, of course, exceptions: recent big-name companies such as Sears, Payless, K-Mart, and Toys-R-Us have gone under in the last decade, and other household names such as Gap, Walgreens, and Family Dollar are closing hundreds of retail locations in a last-ditch effort to save what’s left of their businesses. From an outside perspective, that statistic seems disheartening. However, the fact is only 16 retailers were responsible for 73 percent of store closings in 2019.
In a recent article, Business Insider painted pictures of a retail wasteland — photographs of abandoned shopping malls and derelict storefronts – suggesting that consumers would rather shop from the comfort of their own home than make a trip to the store. While that may sometimes be the case, it’s definitely not a hard and fast rule. In fact, e-commerce traffic around a particular brand or product can actually increase the demand for a physical store location — somewhere that shoppers can try out products for themselves.
How Can E-Commerce Brands Benefit From Brick-And-Mortar Stores?
An example of a company that managed the transition from online to in-store is Warby Parker, a fashionable and affordable eyewear brand. Their founders were four business students who weren’t sure if they’d be able to break into the highly monopolistic market of eyewear, but they went ahead and surpassed their yearly earning goal in three weeks. How? They created a personalized online shopping experience that allows customers to choose five frames to try on at home — for free — before they make a purchase decision. The company has since expanded to be worth over $1 billion dollars and has opened 46 retail locations in the U.S. and Canada.
By following in Warby Parker’s footsteps, today’s successful retailers should capitalize on creating a shopping experience that’s just that – an experience. Despite the convenience of e-commerce, many consumers still value the ability to see, touch, feel, and interact with products before committing to a purchase. Which is exactly why companies like Warby Parker – which once operated entirely online – have made the decision to open physical brick-and-mortar retail stores in an industry phenomenon known as “clicks to bricks.”
E-Commerce And In-Store Should Work Together To Enhance Shopping Experiences
Instead of considering e-commerce and in-store as two competing entities, savvy retailers should use both selling methods in conjunction to create more customer conversions, both online and off. For example, if a customer sees something online that he’s not sure about buying, he has the ability to drive to his local store to check it out for himself. He is also able to ask an employee questions to put any lingering doubts to rest. Conversely, if a customer randomly sees a product while browsing in store but decides not to buy it, he has the option to go online later that week if he regrets not making the in-store purchase.
According to the National Retail Federation, “for every retail company closing stores, five are opening stores.” Additionally, retail is actually growing faster than the rest of the economy, buoyed by confident consumers and a strong economy. For those reasons, online companies that don’t have plans to create a corresponding physical retail location should consider doing so in 2020 to bolster their overall sales.
4 Reasons Why You Should Open A Retail Location In 2020 If You Haven’t Already:
1. Capitalize On The “Experiential Economy”
A recent blog post explains why the millennial generation is more interested in purchasing experiences instead of things. As pioneers of the digital age, millennials are constantly plugged into what everyone is doing on social media, and likewise, they always feel the need to share what they’re up to – resulting in demand for experiential, Insta-worthy opportunities instead of material purchases.Retailers can capitalize on this “experience economy” by designing an engaging, interesting, aesthetically pleasing shopping experience for customers. By creating an environment where consumers can come into the store, immerse themselves in the brand, and share photos on social media, retailers generate buzz around products and encourage other potential customers to have a similar positive experience.
Since millennials are more likely to shop for “fun” than their older counterparts, retail locations that create an enjoyable and memorable experience are much more likely to remain relevant in the minds of young shoppers. Additionally, a large group of millennials report that they usually shop for fun, even if they don’t buy anything. Therefore, smart retailers should consider in-store sales as just one part of the larger “shopping experience” pie, while also focusing on social media engagement and email marketing campaigns to nurture that customer relationship.
2. Give Consumers A Hands-On, Educated Experience
Although millennial shoppers are an important demographic to appease, there are plenty of consumers of all ages who prefer to do their shopping somewhere they can actually try the product before making a purchase decision. According to Forbes, consumers spend more money on in-store purchases than online for many reasons, including the emotional factors and personal experience tied to shopping in retail locations.
In-store shoppers are equally exposed to every product a store has to offer while shopping, which isn’t always the case when browsing online. This benefit is especially important for women: “89 percent of women and 78 percent of men who visit physical stores shared that they add additional items to their cart beyond their identified need. By comparison, a lower 67 percent of men and 77 percent of women reported adding extra items to their carts when shopping online.”
Whether this means trying on clothes at Macy’s, sampling a food item at Costco, or testing a shade of lipstick at Ulta, retail locations serve an important function in helping indecisive buyers make decisions based on hands-on, personal experience, often assisted by customer service employees who are experts on specific product benefits, and who can make educated suggestions based on the consumer’s preferences.
3. Create An Omnichannel Shopping Experience
In order for big players in e-commerce to become “omnichannel” — in other words, to connect with customers on a multitude of levels — physical retail locations are essential. Take Amazon, for example. Even though they are currently the leader in the realm of e-commerce, they understand the many benefits that come with having brick-and-mortar locations for customers to visit, as well.
Amazon has several different kinds of physical stores that are dedicated to the in-person experience — according to their website, “at Amazon physical stores, like Amazon Books, Amazon 4-Star, Amazon Go and Presented by Amazon, you can test drive devices, explore smart home products, browse books, toys & games, or find delicious food on-the-go.”
Amazon also offers its namesake Hub Lockers, which are locations that are staffed by employees and can facilitate returns and secure package pick-ups. This is just another example of Amazon integrating all aspects of their online and in-person features and services to further streamline the shopping experience and make its brand an essential part of their consumers’ world.
4. Offer Services As Well As Products
Not only do physical retail locations provide products, but they also offer services that are hard to replicate online. For example, at Sephora, customers can get their hair and makeup done and then immediately purchase the products that were used. Apple stores are iconic in both their physical design and also in depth of services offered — customers can make appointments at the “Genius Bar” for expert device maintenance and troubleshooting, and they can also browse the other products for sale while they wait.
Another great example of a company that offers relevant services to supplement their products is Nordstrom. With free shipping and returns and a credit card and point system to reward frequent shoppers, Nordstrom provides a very well-integrated online and in-store shopping experience. On top of this, Nordstrom offers free appointments with personal shoppers who get to know the style of the customer and the occasion they are shopping for before making product recommendations. Additionally, they offer alterations and tailoring services on all articles of clothing, whether or not the item was purchased at Nordstrom.
Ultimately, what Sephora, Apple, and Nordstrom have in common is that they create an immersive shopping experience that makes customers want to enter their stores instead of just shopping online. Gone are the days of customers entering a store, buying a product, and leaving — instead, brands should create a memorable shopping experience that compels customers to return in the future.
Brick-And-Mortar Retail Isn’t Dead — It’s Flourishing Due To The Popularity Of E-Commerce
Retail is not only surviving, it is thriving — and it’s bolstered by the popularity of e-commerce. Both brick-and-mortar retailers and online shopping outlets offer their own set of pros and cons, and a lot of it boils down to personal consumer preference.
When a company only has one or the other, it’s either sacrificing in-person customers by not having a retail location, or it’s giving up online sales by not having a user-friendly website. A common theme among successful companies is that they are able to simultaneously reach customers on both levels, netting sales online and in-store. This also draws the customer closer to the brand — if they are able to get their products conveniently in their preferred method, they have a higher chance of developing loyalty and becoming a lifelong customer.
If you’re an online-only company that’s looking to create an in-store retail plan, Strategic Retail Solutions can support your brick-and-mortar initiatives in 2020 and beyond. We have more than 200 years of industry experience, and our 5,000+ retail specialists provide large-scale merchandising services to help redefine the way big-box retailers serve North American consumers, both online and off.
If you’re ready to discuss your strategic retail ideas, call us at (513) 272-3439. Together, we will help you create the best shopping experience for your customers.
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