Article

Why the brick-and-mortar storefront isn’t going anywhere

In-store and online retail experiences are not mutually exclusive. In each retail environment the customers deserves the same loyalty points, custom product recommendations, local sales insight.

September 10, 2015

By Christopher Krywulak

Retail has changed a lot in my lifetime. I have fond memories of my childhood, spending summer months at my grandfather’s farm. My grandfather would take me to Joe Marshall’s general store, where none of the merchandise had price tags on them. Joe would simply tell my grandfather the price of a given item and that was that. In those days, the retailer held most of the power in a retail transaction.

Fast forward nearly four decades and the power has almost completely shifted to the consumer. Before we even set foot in a store, we can research stores, products, reviews, ratings, prices, inventory, and specs online. We can even access this data on our phones, sometimes when we’re actually shopping inside a store. And our options for “where” to buy from are as vast as ever – with multiple stores, websites and even apps at our fingertips.

But in spite of all this choice and consumer empowerment, the physical store isn’t going anywhere. According to a 2014 Capgemini study, the majority of shoppers’ first choice is traditional in-store experiences (72 percent), followed by retailers’ websites (67 percent). The difference may seem marginal, but e-commerce still only accounts for 7 percent of U.S. retail sales. E-commerce’s share of total retail continues to grow at a rate of about 1 percent per year, but one thing is certain: Websites will never completely replace stores.

There will always be a human desire to see and touch things in person before buying them. Clothing and shoes require you to try them on. There is also a distinctive brand connection shoppers can only experience in physical stores – previously pure play e-tailers know this and have opened stores, pop-ups and even trucks to reach consumers, with more planned in the future. Amazon, eBay, Google, Warby Parker and Birchbox are just a few examples that come to mind.

What Amazon and Warby Parker understand is something all retailers should embrace: In-store and online experiences don’t have to be mutually exclusive. The future of retail is not what online can’t do, but what online can do. Consumers want the best of digital and are empowered by digital purchasing information but they also want a human, physical connection. These desires naturally invite online experiences into the physical store.

So which online experiences do consumers want extended to the stores they shop in?

Inventory Visibility

One thing e-commerce has revolutionized for the consumer is inventory visibility. As a result, consumers now expect to “see” if a local store has a desired item in-stock before they visit the store. Recent L2 research identifies in-store availability as “the most important omnichannel retail capability” among U.S. digital shoppers. L2 cites Home Depot as a leader in this regard – its e-commerce site allows customers to filter products based on what’s available at their local store.

In-Store Pickup
From the retailer’s standpoint, in-store pickup holds much potential because it turns existing stores into fulfillment centers for online purchases. This reduces shipping costs, increases foot traffic and encourages add-on sales. From the consumer’s perspective, it’s an opportunity to ensure the desired item is truly worth bringing home. For example, American Eagle Outfitters’ Reserve, Try & Buy service lets customers notify a local store, via the retailer’s app, to hold an item to try on at a nearby store, to see if they indeed like the fit/look in person, before they buy the item. Using stores as fulfillment centers also makes returns and exchanges of online purchases a lot easier.

Drop Ship Home/Store Delivery

Providing customers with full inventory (in-store, other stores and online/warehouse inventory) visibility also allows the retailer to display products not stocked at a given store. Drop Ship programs enable the in-store customer to purchase this additional inventory and have it either delivered to the store for pickup later, or directly to their home – just like a conventional e-commerce purchase. Services like these offer added convenience to the customer, prevent lost sales and promote the retailer’s omnichannel brand consistency.

App and Loyalty Integration

Omnichannel consistency is something consumers are beginning to expect more and more, particularly in terms of how they regularly connect with a brand. Whether purchases are made in-store, via mobile app, or online, the customer should receive loyalty points, personalized product recommendations, local sales/promotional information, etc. in a consistent way. All of these measures are of course great ways to drive foot traffic to a nearby store location as well.

Online/In-Store Community Building

Mobile phones and social media have transformed modern tastemaking and community building (think Instagram and Pinterest) – and it only makes sense for retailers to capitalize on this opportunity with local stores. One example that jumps out to me is J. Crew, which invited fans and local fashion bloggers into retail locations, offering sneak peeks at new collections and styling tips from J. Crew stylists. Customers were encouraged to snap selfies to post on social media using the hashtag #JCrewStyleSessions for a chance to be featured in upcoming style guides, all the while helping promote the brand online to onlookers and other fans.

In conclusion, in-store and e-commerce needn’t compete against each other. The store isn’t going anywhere. The question retailers must ask themselves today is: How can we combine the best of online and in-store to deliver the best possible customer experiences?

Christopher Krywulak is the president and CEO of iQmetrix, a provider of end-to-end retail solutions. Krywulak founded iQmetrix in 1999 with a vision for using metrics to drive retail sales performance and enhancing the customer experience. Today, he leads iQmetrix’s growth strategy, culture, product design and development, as well as R&D.