More Signs that Bricks and Mortar, Online Retailing Can Coexist and Complement One Another

As I wrote previously in my newsletter article about paper versus digital, there is still room for the older way of doing things as long as the older way continues to offer advantages.  And, we see more and more indications that bricks and mortar stores–essentially the older way of retailing often thought to be in decline–still play an important role despite
tremendous growth in online shopping.  In fact, the older bricks and mortar approach to retailing and the newer online approach can complement one another well.

For awhile, bricks and mortar retailers seemed like a dying breed, with only pockets of success, such as Ikea, T.J. Maxx, and Apple’s retail stores. And, still facing marketplace challenges today, many traditionally bricks and mortar retailers have been closing stores. But, there are signs that the pessimistic view of physical locations is fading. Now, even online powerhouse Amazon has a bricks and mortar store and was said to be planning 400 more. Furthermore, the article “Online Stores Embrace Bricks” by Greg Bensinger and Suzanne Kapner in the February 6-7, 2016 issue of the Wall Street Journal, reported that several smaller internet retailers such as “eyeglasses seller Warby Parker, jewelry outlet Blue Nile Inc. and clothing boutique Bonobos Inc.” have physical locations.

I’ll reiterate what I’ve said before that as long as there are advantages to the old way of doing things, the old way can live on. Retailing’s old way, bricks and mortar locations, still has advantages. The Wall Street Journal article talks about various advantages of bricks and mortar locations:

  • The article mentions the more obvious advantage of letting customers “touch, feel and try on goods before buying them”.
  • It features a quote from Bonobos CEO Andy Dunn saying “Shoppers who visit a physical store tend to buy 50% more than those who shop online” and who also says “return rates are lower” in physical stores.
  • It points out that physical stores can attract customers that might be reluctant to shop on line, such as, according to Blue Nile CEO Harvey Kanter, shoppers buying a $7000 diamond ring.
  • It includes a quote from “Ethan Song, CEO of Montreal based men’s clothier Frank & Oak” saying “And, there’s a level of service and personalization that just isn’t possible on the desktop.”

There is also an important advantage that was not mentioned in this particular article:

Bricks and mortar locations are often a convenient place for   shoppers to pick up what they buy online. And, several traditional bricks and mortar retailers offer this option for their online shoppers.

As long as the advantages exist, and as long as physical stores remains economical, bricks and mortar retailing has room to coexist with online shopping. This is the case even though several retailers are closing stores and bricks and mortar may be viewed by some as an outdated way of doing business. It is the case even though several traditional retailers recently reported weak results.

Yet, as I’ve said before, although physical locations continue to live on, retailers cannot completely ignore the tremendous changes that have been taking place. How much and in what ways to adapt to the changes depends upon a retailer’s strategy. But, we do see physical stores adopting methods associated with online retailing.

For example, as I explained not long ago in my newsletter, the Amazon store brings an online flavor to its bricks and mortar location. In Amazon’s physical store, books are displayed with the cover facing outward. This contrasts with traditional bookstores, which shelve most books with the spine facing outward. Displaying covers outward takes up more space, leaving room for fewer books. But, covers outward resembles the way shoppers see books on Amazon’s website, allowing Amazon to more reliably apply its vast quantities of data about online book buying to its bricks and mortar stores.

It’s not just Amazon’s physical stores that are adopting methods associated with online retailing. As the Wall Street Journal article points out, physical stores run by other online retailers also differ from traditional bricks and mortar stores. For example, smaller internet retailers may let shoppers examine and try on merchandise in physical stores, but all purchases may have to be made online.

In my view, what we are essentially seeing is an integration of online with bricks and mortar retailing. In today’s world, online retailing and bricks and mortar can complement one another well. Successful retailers will combine these two approaches in ways that fit their strategy. Success comes from tapping the retailer’s own strengths, whether online or bricks and mortar, then evaluating whether and how there might be room to adopt the advantages of the opposite approach, and integrating the two approaches as might be appropriate.

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