While pundits have been announcing the end of brick-and-mortar for years, I couldn’t be more excited about the future. It’s part of the reason why I’m so passionate about the idea behind Aisleside – the opportunities are endless for retail brands that are smart about how they leverage digital technology.
Brick-and-mortar isn’t dying
Yes, it’s true that retail has changed. Ecommerce spending has experienced 15 consecutive quarters of positive year-over-year growth and nearly $5 billion was spent via smartphones and tablets in 2013. But there’s one statistic I came across recently that put everything in perspective for me.
Eighty-one percent of Millennials’ retail spending occurred in brick-and-mortar stores, compared to only 19 percent online.
The NPD Group’s Winning the Fight For Millennial Shoppers report
Even though it’s easy to flick through pages of products on a tablet and have something shipped direct to your doorstep – and especially so for the tech-savvy Millennial generation – when most consumers want something they’ll find themselves shopping a brick-and-mortar store.
Physical retail is everywhere
Think about your typical day. How many things are you paying for in person versus orders placed online? You fill up your car at the gas station and swipe your card. You stop at Starbucks for coffee and swipe your card again. While you’re out for lunch you stop by the office supply store to pick up more of your favorite pens – you’re not quite sure where they always drift off to. And finally, on your way back home for the day, you realize you forgot something during your weekly grocery trip and end up swinging through Target to grab it.
You just shopped your way through four different retail experiences. Could all of that be replaced with ecommerce? Some of it, sure, if you’re a rigorous planner and can anticipate real-life’s daily surprises, but by and large you’ll still find yourself thankful for the store down the street.
Retail is all about the experience
Ecommerce companies have found new ways to do things. They’re able to offer customers more choices. And they can often undercut brick-and-mortar on prices – they simply don’t have the same overhead. But what they can’t do is beat the physical experience.
Warby Parker, an industry darling in the ecommerce world, made waves with their unique business model. They sell sub-$100 eyeglasses direct to the consumer. Their website is loaded with all sorts of features, including a virtual try-on service that’ll help emulate what you’d look like wearing a pair of their glasses. And if you’re not satisfied with that, you can have a box of five frames shipped to your home to try on personally – but even that is not enough for Warby Parker. Since launching their website in 2010, they now have four physical stores and 12 stores-within-a-store across the country, all helping to give customers a chance to experience their brand live.
We can create really special experiences online, but there’s nothing quite like walking into a physical space, a world we’ve created.
Warby Parker co-founder and co-chief executive Neil Blumenthal
Technology is improving the in-store experience, not eroding it
From the first utterance of the word, the idea of showrooming has haunted retailers. For those that aren’t familiar, showrooming is the practice of visiting a physical retail store to examine a particular product, but then ultimately leaving the store and making the purchase online (or in some cases, buying the item from a smartphone while still in the aisle).
Early reports had many retailers worried about the practice. Some might say showrooming is what led the charge for so many to offer online price matching this past holiday season; they simply couldn’t afford to miss out on the sale. But smart retailers like Target are actually embracing showrooming head on, seeing it as an opportunity as opposed to a threat.
[A]t Target we believe our stores must offer exceptional experiences. Fully embracing showrooming means seamlessly integrating the physical and digital worlds to exponentially improve the guest experience.
Casey Carl, Target’s president of multichannel
And still, more recent studies say showrooming isn’t the top threat to brick-and-mortar. In fact, some reports would actually show that the opposite of showrooming – called reverse showrooming – may be more true of the way consumers shop.
Whether you believe in showrooming or not, the fact of the matter remains: technology is changing the way people shop and the way retail sells. This is your chance to change with it.
How will you adapt?
Our relationships with technology and digital devices aren’t going away – it’s likely they’re actually growing stronger. Will you look at the future and see possibilites, or will you be plagued by complacency?
What do you see as the biggest opportunities at the intersection of digital and physical? I’d love to see your comments below.