For a long time now we have been hearing how online retailers (or e-tailers) are killing the bricks-and-mortar retail industry.
Low performing retailers complain that the competition is unfair, since e‑tailers have fewer expenses (they don’t need a central location for their store, if any at all, they need barely any staff, etc). Another focus of complaints against online stores is that people use the bricks-and-mortar shops to try on, feel and choose products and then buy online.
So what happens when e-tailers decide to move into the bricks-and-mortar space?
This sales trend is moving towards a hybrid retailing model that embraces the advantages and challenges of a combined model.
Smart retailers know that they can compete with online businesses by taking advantage of the interactions they have with people and the face-to-face time they get with their clients every time a potential customer enters their shop. Many traditionally bricks-and-mortar stores have started online shops or added shopping carts to their websites to complement the in-store experience, which is particularly helpful when it is not possible or convenient for clients to go to the store but they already know product, size and/or fit (i.e. when they are overseas, if they are unavailable during regular opening hours, etc).
This omini-channel model has proven to be very successful when implemented properly. There are companies that make the most out of it by having clear and aligned strategies for their store and online operations. One good example is the situation when a client is at a store and they don’t have a particular colour or size that the client is after. The salesperson there and then puts an online order, which is paid by the client at the counter and delivered to the client’s preferred address within 24 hours.
Clever companies know the value of good interactions, they know that they can help a client and gather valuable data about shopping behaviours, trends and needs in their market by having good and interesting conversations with clients on the shop floor.
The most interesting developments, however, have taken place over the last two or three years. A few companies that have been, and still are, major successes in the e-commerce world have made the leap into the bricks-and-mortar arena.
They realised they were losing opportunities because people couldn’t see, touch, feel, and try on their products. They also wanted to win market share among those people who don’t shop online.
One good example is e-tailer Shoes of Prey, which first starting hosting shoe-design parties in its offices, and then moved to open standalone boutiques inside David Jones in Melbourne and Sydney. Based on the success those schemes had, it opened its own boutique in Westfield mall in Bondi Junction in Sydney.
The most telling case is Amazon. Since its beginning, Amazon has been the quintessential online retailer, so it surprised many experts when it opened a pop-up kiosk in 2013 in a shopping centre in San Francisco. Amazon is now opening a store in Manhattan that will act as a small warehouse. The store will showcase some technological devices, and work only for same day deliveries where people order online and pick it up in the store on the same day. Together with this warehouse shop, Amazon will soon open two temporary pop-up stores, one in San Francisco, and another in California.
Interestingly, some stores have started to use a combined model. This is how it works: they have a bricks-and-mortar store that acts as a kind of showroom. These stores don’t carry stock, just samples. People go there to try styles, sizes, and select colours. Then they order online, there at the store and they receive their purchase in 24 hours at their chosen address.
It seems that having some kind of hybrid model is the way to go, as it allows for many of the benefits of both worlds, with few of the drawbacks: the possibility of holding less potentially unused stock, avoiding or reducing other challenges associated with running only a bricks-and-mortar shop, and reaping the benefits of face-to-face interactions that are lacking in the online world.
Clients now expect an omni-channel experience, so it’s worth considering your options if you haven’t yet explored how a combination of online and bricks-and-mortar offerings can assist your business.
Remember, everybody lives by selling something.