The evolution of brick and mortar retailers in the online age

The revolution is here – and if you're a brick and mortar retailer, you're on the wrong side. That online retailers have been outpacing offline ones is certainly not a new story, but it doesn't have to be the end of the story. There's one thing B&M retailers can offer shoppers that online ones can't: The wisdom, reassurance and guidance of their sales staff. 

Wait – aren't pushy sales people the reason (or one of them) that people shop online? Turns out that's not necessarily so. Among the flood of statistics chronicling the fall of B&M stores, there's this: Two thirds of customers for major items – appliances, power tools, automobiles – buy those items in stores, even if they have done prior research online. One of the reasons they do so is because when it comes to major purchases, people need reassurance – in the form human contact – that they are making the right choice. Even if that reassurance comes from a salesperson – and even if it costs them a few extra dollars. 

Unfortunately the news hasn't reached the retailers yet. B&M retailers are not taking advantage of their “human factor” secret weapon; if they were, it would show up in the sales numbers. May was another down month for B&M retailers, the worst in nearly a year and half, with sales slipping 0.3% compared with April's numbers. But that figure, according to Marketwatch economists, only tells half the story. Online sales were actually up nearly 1% while sales at large brick and mortar retailers were down by that same figure. 

And that's far from the worst of it. So far this year, no fewer than nine retail chains have filed for bankruptcy, while online sales continue to grow at a fast clip; this year alone, online could grow by 16%. Department stores, electronic stores, shoe stores, and many others have been decimated by online in the past few years – and now, according to a new FMI-Nielsen report, supermarkets are the next at-risk field, with online grocery shopping set to grow as much as 500% in the next decade. 

Seems like an open and shut case, doesn't it? The B&M king is dead; long live the online retail. Except that there's more to the story. “Online” is not a monolith – and it's becoming a story of Amazon vs. everyone else. Amazon already accounts for more than 40% of all online sales, and by the beginning of next decade that figure will rise to 50% - and beyond. Seen from that perspective, the struggle is no longer about B&M vs. online; it's about B&M and online vs. Amazon. 

It turns out that what consumers really want is an easy buying experience – exactly what Amazon offers. Two-day shipping, easy comparison price shopping, reviews (at least some of them have to be real), and a host of tools designed to get a product off a computer or device screen and into the hands of a consumer quickly, efficiently, and usually cheaply (relative to other sites). Some sites offer some of those advantages and assets – but none match Amazon's ability to deliver the whole package. Thus, Amazon's domination of online retail. 

How can B&M take advantage of this? By taking advantage of Amazon's achilles' heel – its lack of a “human touch.” Amazon does what it does very well, but there are plenty of customers who are looking for a more in-depth experience – and it's those customers B&M stores can and must pursue to remain viable. If Amazon has assets that it has used to turn itself into the king of the retail hill, B&M stores have assets that they can utilize as well to keep and even grow their market share. 

What assets do B&M store have? An experienced sales staff that can help guide shoppers to the products they want or need. Salespeople don't have to fall into the stereotype of the pushy, over-your-shoulder personality with a loud red-checked sports jacket; they must also be helpful, making initial contact with the customer and then stepping away, available for customers who have questions; no pressure or pushiness required. Video can bring this service into the home – giving B&M retailers, especially local stores, an opportunity to reach out to customers all over the world, just like Amazon does. 

With video, B&M stores can leverage their most important asset – experience and customer care – and bring customers the best of both worlds – the benefits they would have from shopping in a real store, together with the convenience of shopping at home. And because the Internet is international, retailers could move beyond the local.  No one thinks it strange when a customer in India buys something from an American e-tail site; why can't a local store in suburban Chicago get some of that action as well? 

Done right, video has the potential to save B&M – or at least the retailers who give the customer what they are looking for in terms of a personalized shopping experience. Tech applied in this way – enhancing the advantages that retail stores have, like a knowledgeable sales staff and someone to talk to – can help stores at least retain their sales level, and maybe expand them. Online – and especially Amazon – are facts of life, and they aren't going anywhere. But they don't have to mean the end of retail. With an Internet robust enough to support advanced video applications, there's no reason for B&M retailers not to try this – and every reason in the world for them to do so. 

Once, movie theater owners were scared to death of cable, coining the term “pay TV” to emphasize that customers were going to be asked to pay for something they were getting for free. If movie patrons were going to have to pay to watch television, the theater owners reasoned, then they would probably spend their entertainment dollars on TV – leaving the movies behind. And initially that is indeed what happened – until theater owners, and Hollywood, applied technology (stereo sound, giant screens, CGI, etc.) to provide TV viewers with an experience they couldn't get at home. The technology exists for B&M stores to provide customers with an experience they can't get at Amazon; it's up to them to implement it.  

Louis Ziskin, CEO of DropIn

Image Credit: WNDJ / Pixabay