Technology is helpful but Physical Storefront Still Relevant
The advancements almost daily in the technologies for business use cause one to think twice about how to move forward with technology in the Retail world. The truth is, the Brick & Mortar storefront is still a highly relevant need. Though the lines may be blurring, it is a combination of the experience as a whole from virtual to reality that will be the best approach. Since the line between channels are blurring, retailers need to focus on creating a seamless experience across online and offline in order to attract today’s consumers, and gain a competitive edge in the market.
Over the past few years, the retail industry has witnessed unprecedented digital growth with increased investments from retailers on digital assets than ever before.
So how are bricks-and-mortar stores performing?
In fact, as per a CNN Money report, “2017 just set an all-time record for store closings”. This retail apocalypse has triggered a basic question in everyone’s mind — are physical stores really dying? A recent survey by Retail Dive on the buying behavior of US consumers highlighted the importance of store visits. Amongst them, the top reasons for visiting a retail store was:
- Try before you buy
- Instant gratification
- Ability to return the product more easily
- Enjoyable retail experience
While approximately 90% of all retail sales still take place in stores, sales from e-commerce are expected to reach 17.5% by 2021. However, contrary to this, a recent PwC research on preference to buy online versus in-store purchases shows that the need for in-store experience still exists.
In fact, bricks-and-mortars are more relevant now than ever before. Since the line between channels are blurring, retailers need to focus on creating a seamless experience across online and offline in order to attract today’s consumers, and gain a competitive edge in the market.
Here are four strategies and recommendations to help businesses achieve this:
- Become experience centers
Retail innovation, including magic mirrors and VR, can create interest for buyers and become a compelling reason to visit a store. They can also improve personalization. For example, Sephora’s colorIQ technology personalizes and creates a four-digit code by scanning the face which can be used to purchase the right make-up base.
- Buy anywhere, deliver anywhere, return anywhere
The online world will have lower margins given the price competition and free delivery modes. Digital native companies will always do better in online sales compared to traditional ones but bricks-and-mortar has many other distinct advantages, such as cross-channel delivery models like click and collect. The strategy of ‘buy anywhere, deliver anywhere, return anywhere’ creates seamless experiences across channels through technological investments.
- Become fulfillment centers
This will lead to increased availability of inventory at no extra holding cost. Businesses can also get away with distribution centers and associated real estate costs. Proximity helps in same day deliveries and retailers can even think about an hourly delivery model. For grocery and fresh food items, this is a boon as items can be picked from the store and shipped across swiftly. Many retailers including Target and Tesco are already doing it. Walmart used its store associates as delivery personnel on their way back home.
- Stores provide touch and feel
Online technologies still cannot replace the touch and feel of the product that retail stores provide. A UF Warrington research (Florida) actually showed that online sales went up by 29% when the retailer opened a bricks-and-mortar store, indicating consumers really try the product in the store and buy it online. For the same reason, Amazon’s decision to acquire Whole Foods and open an experimental grocery store has attracted a lot of interest. So the bottom line is, stores are important but the retailer needs to re-imagine the role of the store.
Contact us here at PTC Computer Solutions to help understand the retail market and business technology of today. For more on the ever evolving Retail market and how to stay involved and relevant, contact us today. We work hard to stay ahead of the cutting edge and can assist your projects in understanding where you should be putting your efforts.
David WB Parker is a principal of Parker Associates of Jacksonville, Florida, marketing consultants to the real estate industry; President of PTC Computer Solutions, IT Specialist, and an active real estate sales professional with PARFAM REALTY based in Jacksonville, FL. He can be reached at 904-607-8763 or via email firstname.lastname@example.org.