It’s time for the Retail Brick and Mortar Store to stand up and be counted! All of the talk about the demise of Brick and Mortar stores is premature.
In this age of E-Commerce the vast majority of retail sales are still conducted face to face in a physical store. Even Millennials shop in a physical store 50% of the time.
The phenomenal growth of E-Commerce is undeniable. But more importantly we must remember that customers want an OMNICHANNEL experience, NOT a Single Channel experience.
At the intersection of what the Customer wants and what the Retailer wants is the Brick and Mortar store! This is where the Brick and Mortar Store is uniquely positioned to leverage its significant advantages!
Brick and Mortar stores will certainly need to transform to meet the new and emerging market place realities. Shopping behaviours and expectations are changing. Competition is intensifying. Profit pressure is enormous. And the Internet of Things (IoT), Artificial Intelligence (AI) and E-Commerce all enable a set of new capabilities that must inform the way retailers go to market.
But even if a Brick and Mortar store changes to meet these dynamics, and fewer stores are required to support a franchise, the physical presence that a Brick and Mortar store offers, in some format, is an incredibly valuable asset for both customers and retailers alike!
What Do Customers Want?
As the saying goes, “Customers want what they want when they want it and how they want it”. In net they want to be able to order product from anywhere, from any device, at any time. Further they want it delivered in any manner of their choosing.
Sometimes they want to pick up the goods and sometimes they want the goods delivered to a certain location. On some occasions they want to physically see the goods before they buy and on other occasions they are happy to order from their screen. And sometimes they are happy to chat with someone online yet at other times they are more comfortable talking with someone face to face.
As shown in this chart from Marketing Research firm SmarterHQ, even Millennials still choose to shop within a physical store 50% of the time.
Customers also want a no-hassle return capability. They may be happy to put the item in a box, address it and take it to the post office for mailing. Or they may want to be able to take the item to a store and let them handle all of the shipping particulars. If an item is to be exchanged they may want to pick it up at a store right away or they may be happy to wait for a replacement item to be shipped to them.
Again, Customers want unlimited flexibility and choice at all stages of their omni-channel buying process.
What Do Retailers Want?
First of all Retailers do want happy customers. For an unhappy customer will either walk out of the store or just go to another website without a second glance or thought.
Retailers want to grow and promote their Brand so as to drive customer traffic and sales either in store or online. They want to compete aggressively for their share of the consumer wallet.
And Retailers want to enjoy profitable revenue growth. They need to lower infrastructure, freight, distribution, and handling costs and increase margins.
Retailers also need to increase capacity throughout their networks to enable them to handle growth and the crazy periods of Black Friday and Cyber Monday. This includes the capacity of their stores, distribution channels and suppliers. Conversely Retailers may need to ratify their store networks through closures or store reductions, and they need to be able to do that while mitigating the impact of lost margin.
Retailers want to provide customers with the delivery and returns solutions that they demand. But they need to manage this in a cost effective manner.
In short Retailers want the same things that Customers want: they want the ability to effectively allow customers to have what they want when they want it and how they want it. But they also want to show profitable revenue growth for their efforts.
Leveraging the Brick and Mortar Store!
At the intersection of what the Customer wants and what the Retailers want is the Brick and Mortar store.
Again there is no question that the current structure and format of the Brick and Mortar store must change to reflect the latest technologies, customers demands, financial pressures and competitive dynamics.
But within that there is a role for the Brick and Mortar store.
Customers still want a face to face experience in addition to their screen ordering experience. The ability to up-sell a customer can be high in a physical environment. And a positive personal touch can leave a great impression which the Customer will communicate rapidly both verbally and electronically.
Stores have the ability to act as Fulfillment centres and hubs dramatically closer to customers than Distribution Centres can ever be. This enables stores to offer more shipping/pick-up options and increase network capacity, support growth and even lower shipping costs. Stores can allow customers to have their goods picked up or shipped locally in whatever fashion they choose.
Customers can return and exchange goods quickly and hassle-free. And when they take, or ship, these returns to a store the store personnel can very quickly get those goods back on the store shelves ready to resell.
Further leveraging inventory in and across stores allows Retailers to make more goods available to customers even faster. This visibility to Customers increases the Retailer’s ability to save sales. And Retailers can mitigate markdowns and discounts by moving this inventory fluidly to where customer demand is in their network of stores.
Brick and Mortar!
Customers want an Omni-channel experience, not a single channel experience. The Brick and Mortar store can be a competitively differentiated asset in the chase for Customers.
Not everyone can be Amazon and have billions of dollars worth of Distribution Centres located everywhere. So one way to compete is to re-imagine how to leverage the oft maligned Brick and Mortar Store.
The nature of the design of the retail store will certainly change. The customer interface, technology, automation, the Internet of Things, transactions and systems will all change in the future.
But the physical space which is a Brick and Mortar store will be the envelope within which that new buying experience can still take place!
The intersection of what the customer wants and what the retailer wants … the Brick and Mortar store!