The time hasn’t come to close your retail store. If you work in a brick-and-mortar establishment though, it's understandable to wonder if it's just a matter of time before your store closes and moves to online only. But with major online players such as Amazon, eBay and China’s Alibaba moving from online to offline presences, the trend shows that retail is far from dead – indeed, it may well be facing a rebirth.
Shopping patterns are changing
Without a doubt, shopping patterns around the world are changing. The internet has become a huge retail space, but it still only accounts for 10% of the retail industry. While the way we personally communicate has changed, and snail mail is doomed in most analysts' eyes, brick and mortar isn’t dead. Amazon, eBay and Alibaba make huge profits every year, something that would have been impossible without the internet, but they can’t continue to grow forever just online.
The online business schooling website Investopedia suggests: “Nearly 70% of shoppers use the internet at some stage of the shopping process to research, compare or purchase.” This means that while a balanced online and offline presence will be necessary for many retailers, you won’t go bust if you have a retail presence.
Three major online players with a retail presence
Amazon, eBay and the Chinese giant Alibaba all have some form of Main Street marketplace. All three could afford to trade online only and continue making huge profits every year, but their top thinkers have changed direction, and it's toward brick and mortar.
eBay has been working with Sainsbury’s, a supermarket retail chain, and its new acquisition, Argos, in the UK. Online sellers can have their goods delivered to one of 800 Argos stores in the UK. Argos, itself a homewares retailer, has a major online presence, and other than amping up its same-day home delivery service, has shown no signs of retreating from its brick-and-mortar stores.
Alibaba bought up the Chinese department store chain Intime late 2016 for $2.6 billion. That’s not small change for any retailer, even one that captured $1 of every $10 spent on retail in China last year. Speaking at Davos in January, Daniel Zhang, Alibaba’s CEO, said: “Today we cannot just separate online and offline.”
Amazon has moved to brick and mortar too. The online giant has opened four bookstores across the US, a new grocery click-and-collect store in Seattle, and is also testing the checkout-less Amazon Go store for its employees in that city as well. Many Amazon watchers believe the firm plans to launch a chain of these stores globally.
Click and mortar
For three multibillion dollar companies to make deliberate moves into brick and mortar, they must be onto something. Research has shown that in the UK, “almost two-fifths (39%) of consumers make an additional purchase when collecting an online order from a store.” This means that those who don’t have a physical presence on the Main Street could very well lose out.
Online business portal Investopedia explains: “Companies with brick-and-mortar stores will still have customers that visit physical stores in order to see how an item fits or looks, only to ultimately make the purchase online (referred to as ‘showrooming’).”
Convenience is a major factor in maintaining a brick-and-mortar presence – rather than rely on a courier to deliver goods at some point tomorrow or, in the case of major urban areas, within a couple hours, people can have the things they need right when they want them. This is why having a store locator service may prove useful on your corporate website.
A retailer can have an online presence through having a store locator service, store locator app or other store locator software that encourages the shopper to use your store today over one that can only deliver goods to the customer tomorrow at the very earliest. This can significantly improve sales, even if your site does not offer a shopping service complete with expensive and cumbersome checkout software.
Omni-channel – the way forward?
“Omni-channel retailing” is a big phrase to indicate that retail shopping will always be a necessary part of the shopping experience. Your company may not even need an online e-commerce store in future, just as long as your customers are aware of your presence and know where your nearest outlet is (perhaps through an online store locator app) so they can choose you over your competitors. Brick and mortar may never die!
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