USA TODAY International Edition
Don’t count out real world stores
Physical shopping has unique advantages
At the start of holiday shopping season, retail prognosticators are calling for a holly jolly season for e- commerce — and a less merry one for brick- andmortar stores.
This year, for the first time, American consumers plan to do more of their holiday shopping online than in physical stores. A Deloitte study predicts that customers will spend on average $ 879 online and $ 541 in shops.
Based on these forecasts, e- commerce appears in prime position to soon dominate the holiday retail landscape. We can kiss goodbye traditional stores. Right?
Not so fast. Brick- and- mortar stores are making a comeback. By focusing on customer service, integrated business models and innovative partnerships, many chains — including Target, Kohl’s, Madewell and Best Buy — are likely to post strong holiday sales. Meanwhile, e- commerce may be in for a reckoning. Signs indicate that lightning fast delivery customers have come to expect from internet vendors, namely Amazon, is not sustainable.
Physical stores compete
It has been a challenging decade for brick- and- mortar retailers. Some background: At the dawn of the Digital Age, stores viewed e- commerce as a threat. To compete, they slashed prices to match their online rivals. Doing so forced them to cut costs: They shed salespeople, stopped investing in training, didn’t pay attention to merchandising, and ignored partnerships and product development. Customers turned away and some venerable brands — including Sears, RadioShack and Toys R Us — filed for bankruptcy.
Today, however, stores have wised up to the notion that brick- and- mortar and online retail can coexist and complement one another. Stores don’t necessarily need to lure customers off their digital devices — nor do they need to match internet discounts. Rather, they must find ways to integrate online and offline shopping and give customers more of what they want. Further proof that physical stores aren’t disappearing is the movement among digital retailers, such as Warby Parker and Allbirds, to open brick- and- mortar stores.
Best Buy is a prime example of a brick- and- mortar chain that’s succeeding in the Amazon Era. The company understands that its physical stores represent an opportunity to create social and sensory experiences for consumers. In addition to renovating its showrooms and providing dedicated kiosks for electronic brands, Best Buy heavily invests in employee learning. Best Buy views knowledgeable employees as a competitive advantage — one chatbots can’t replicate.
What’s more, the company has seamlessly integrated its click- andmortar logistics. When customers order items from its website, the products are sent from the location that allows for the most efficient transport — be that a local store or a distribution center several states away. As a result, Best Buy’s shipping times enable near instant gratification for customers.
Smart retailers are also investing in partnerships that bring unique or hardto- find items to their stores. Target, for instance, recently began selling Disney merchandise at select stores that was previously only available at Disneyowned retailers. And Madewell, the J. Crew spinoff, teamed with ThredUP, the secondhand online retailer, for a collection of pre- owned jeans available in select locations.
Shipping advantage
Retailers are also entering partnerships to increase shoppers’ convenience. Most large retailers already use their physical stores to fulfill online orders, allowing customers to move easily from the virtual world to the physical one. Kohl’s, the department store chain, allows for customer convenience in other ways, too. Kohl’s accepts Amazon returns, for instance. This year it also began a collaboration with Aldi to build mini versions of the food discounter into several of its stores, enabling shoppers to pick up groceries as they browse the racks. It’s a surefire way to keep shoppers coming back.
Online sales will continue to grow, but e- tailers would be wise to view the recent brick- and- mortar experience as a cautionary tale. Just as stores initially tried to compete with the internet through discounts, today’s online retailers are trying to mimic brick- andmortar’s potential for instant gratification through ever faster shipping. But e- tailers are disregarding the associated ballooning costs. Case in point: Amazon’s introduction of one- day shipping for Prime members has cost the company substantially more than its original $ 800 million estimate.
To be sure, many brick- and- mortar chains are still struggling. This year, companies from Forever 21 to Gymboree to Payless have folded. Since the start of 2017, the retail sector has lost more than 150,000 jobs.
But physical stores will always have a place in this retail landscape. As long as brick- and- mortar retailers play to their strengths by integrating with online, developing creative partnerships, and providing customers with stimulation, meaningful human interactions and unique offerings, there is room for both to thrive.
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