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Online Retailers Venture into the Brick-and-Mortar World

 
February 5, 2016

Have you ever wanted to buy that piece of jewelry or, that funky pair of pants online, only to stop short of thinking How big the shining piece is actually going to be?, or Is that the real shade of blue for the pants shown in the display picture?. Dont blame yourself for being an old-school online shopper. According to Harvey Kanter, CEO of Blue Nile, one of the largest online retailers for diamond jewelry around the world, Consumers No. 1 objection to buying online is not being able to see and touch and feel the product.

Blue Nile was quick to identify this reluctance in buying behavior of its customers on the e-commerce portal, where the average transaction value of engagement rings is $7,000 US. In 2013, for the first time the e-commerce jewelry giant tested the waters with a kiosk set up inside two Nordstrom stores, displaying bridal jewelry. This physical experience and customer touch point opportunity was extended further, when it opened Webrooms last year in New York. The Webroom is a display of Blue Nile products that customers can see, touch and feel before they buy them online. Tablets are available at the Webrooms so customers can order online within the store, or go back and purchase after consideration. The Webroom provides the benefits of an in-person store, without dealing with the hassles of inventory and other overhead that physical retailers have to manage. In the Webroom, interested buyers can interact with the sales associates, similar to the Apple Genius Bar, get educated about the products, browse jewelry pieces, or simply have fun inside the store by trying on rings. Similar to a Webroom, Bonobos, the menswear brand, has guideshops where customers can try apparels and place online orders for home delivery, furthering the brand concept that men want to shop in-stores but dont want to leave carrying handbags. While at the same time theres the eyewear brand Walby Parkerthathas adopted the brick-and-mortar model completely, and now sells products both online and in-stores.

Recently, Amazon opened its first book store in Seattle called Amazon Books which is described by the online giant as the physical extension of Amazon.com. There have also been reports of Amazon opening more than 300 physical book stores in near future.And it doesnt stop there for the e-commerce stalwart, Amazon is also reshaping the brick-and-mortar experience with an application that allows shoppers to pick items and leave the store without stopping at a cashier or kiosk. The application uses cameras, sensors, RFID readers, etc. to identify shoppers and the items they have selected, providing convenience to customers and simplifying Amazon operations.

Some may see this as a huge U-turn by these retail hotshots who started their online businesses not too long back,and are now adopting the brick-and-mortar mode, competing with the same business model whose margins they have put under pressure. However, for the evolved retailers who understand the customer psyche and the industry imperative of omni-channel retailing for a seamless shoppingexperience online on devices, or inside the store, this would seem as the next logical step to improve the customer journey.

As the e-commerce landscape gets crowded with more than 800,000 online retailers fighting it out, the flagship stores act as efficient marketing vehicles and generate brand awareness, further driving traffic to the website by creating a halo effect on consumers. Physical stores also attract the segment of customers that do not tend to buy products online, or are not aware of the brand and its online presence.

A majority of the online brands that are foraying into brick-and-mortar are looking at their physical stores as experiments and as a part of their customer behavior learning curve. Amidst all the apprehension and uncertainty regarding online shops setting up physical stores, one thing is for sure brick-and-mortar is here to stay.

Aditi Roy Ghatak is Digital Marketing Content Strategist with the TCS Digital Software & Solutions Group. She has extensive experience in technology research which includes upcoming trends in the digital, social and information technology field and analyzing their applications across businesses. She also has prior experience in market intelligence activities which included studying industry trends to identify potential business opportunities and has been responsible for segment and account based marketing. She has published articles on enterprise cloud applications across industries and digital as well as social media trends. She covers current topics and digital trends in the e-Commerce and customer analytics space on the Because Digital blog.