With all the talk about online shopping and news of stores closing, it can appear that brick and mortar stores are doomed. Research, however, shows that people like both for different reasons and 71% of consumers still prefer to shop in-store. [Source: 2017 Retail Marketing Trends for Brick and Mortar Stores]
According to Goldman Sachs’ 2016 DotCommerce report, 15% of all clothing and accessories are sold online and have an estimated year over year growth rate of 20%. By 2020, more than 50% of retail sales will still be sold in brick-and-mortar stores. Clearly, half of the market is a lot to ignore even for ecommerce disruptors like Amazon, which has been continually toying with physical retail concept for its Amazon Fresh grocery service and Amazon Bookstores.
Many e-commerce retailers are realizing the importance physical stores play in the buyers journey. Bonobos, the mens trouser brand that started online in 2007, can be hailed as the pioneer of the online to offline strategy in retail. Bonobos physical stores operate only as showrooms where customers can try on pants with the help of experts. Rather than leaving with items, all the purchases are delivered. Currently, Bonobos has 24 stores and plans to expand up to 100 by 2020. Apple and Warby Parker, two of the worlds five most valuable retailers in terms of sales per square foot, also started online and later opened physical stores. This years KPCB internet trends report predicted many more online companies will follow suit.
E-commerce companies have realized that physical stores will enable them to reach shoppers who are not comfortable with online shopping while also enabling them to provide new experiences to their existing customers. Online retailers already have data on when and where their customers like to shop that they can use to open fewer stores in the right locations. And, with fewer locations to manage, they can focus on investing more in exceptional in-store experiences.
Every year during holiday season retail stores such as Bloomingdale, Macys, Bergdorf Goodman, among others showcase creative window displays in their stores, designed to arouse all of the human senses and connect to consumers on both physical and digital realms. Regardless of which channel, or combination of channels being used to deliver products and services, retailers need to focus on how they are going to create an enduring customer experience by combining the best of both worlds, as demonstrated by these window displays.
Similar to how data and analytics have changed the online shopping experience, so too should the mash up of hyper connectivity and on-demand information enrich the consumers in-store shopping experience and build loyalty to drive the retail business forward. Moving forward, retailers need to consider how to coalesce consumer paths between physical and digital to meet rising journey expectations, and deliver even more meaningful customer experiences. Customers expect personalized, contextual products, services and experiences that deliver real value across their end to end, hyper-connected customer journeys.
A reverse shift is happening in the retail world, as once considered to be giants retailers like Walmart and John Lewis are establishing an online presence, while well-established ecommerce brands are going the physical route. The mandate is clear, be where the customer is.