Several years ago, as ecommerce exploded and more retailers started selling online, it seemed as though the days ofbrick-and-mortar businesseswere numbered. Major online retailers like Amazon were a viable threat to offline retailers, and many large, national chains including Macy’s and Walmart began closing physical store locations.
What seemed like an inevitable fate for brick-and-mortar businesses, however, hasn’t in fact been true. When it comes to the number of sales made overall, only a small percentage are completed online. According to theHarvard Business Review, sales made at brick-and-mortar stores accounted for 92.3% of retail sales in the first quarter of 2016. Even more telling, there was only a 0.8% shift from offline to online sales between 2015 and 2016.
So, despite all the doom and gloom around the industry, the stats actually point to a bright future for brick-and-mortar retailers — at least for those that are smart and adaptable. The truth is, while shoppers will continue to visit stores to make purchases for many years to come, what they expect from stores will be different. Not only will offline businesses be competing for attention against those that are online, but brick-and-mortar stores will need to offer more than just “stuff” in order to thrive.
Here, we’ll discuss what the future of brick-and-mortar stores will look like and how to adapt and make changes in order to keep your business growing.
Image Credit:Ripen Ecommerce
Create Experience-Rich Stores
Gone are the days when the sole purpose of brick-and-mortar retailers was to carry inventory. Of course, that’s still essential, and converting browsers into buyers should always be the main goal, but how retailers get to the end result is changing.
Brick-and-mortar retailers need to offer so much more than “stuff.” Shoppers want engaging andpersonalized in-store experiences, ones that go beyond the traditional retail space. A growing number of major retailers have started offering complimentary workshops and classes to clientele. For example, Lululemon and Nike offer running, yoga, and fitness classes at select locations as a way to build brand awareness and loyalty.
According to a Marketing Landarticle, Urban Outfitters recently began adding bars and restaurants to a number of stores to give Millennial customers another way to engage with their brands. At Williams-Sonoma, customers can sign up for in-store cooking classes, and bookstores regularly attract clientele to shops by offering author readings and book signings.
Pop-up shops are another way to attract customers to your store for an experience they wouldn’t find online or at any other retailer. These temporary, short-term retail events have been a growing industry, accounting for approximately $10 billion in sales, according toPopUp Republic. Major companies including Nordstrom, Amazon, and Best Buy have all started hosting pop-ups as a way to increase brand awareness and draw customers in store.
When it comes to brick-and-mortar retailers, hosting a pop-up shop at your store not only creates a unique and limited experience for clientele, allowing you to potentially attract new customers, but helps you test out new revenue streams and develop relationships with other retailers in your community. Consider partnering with another business selling complementary products or items with a similar aesthetic. For tips on how to set up your own pop-up shop, check out our video series “How to Create a Successful Pop-up Shop.”
In order to keep customers coming back and attract new ones, it’s time to start thinking beyond the typical sale and start offering your customers immersive, memorable experiences.
Offer Personalized Shopping
The future of customer retention for brick-and-mortar stores lies in personalized experiences. One way is to offer tailored shopping experiences or personal shopping services. Another method is to truly home in on who you’re trying to target as clientele and build a shop curated specifically to them.
One brand that has succeeded in this area is Bonobos, a company that started selling men’s apparel online only in 2007. To increase business and attract new customers, the company launched Guide Shop, a brick-and-mortar shopping experience in select cities across the U.S. The catch, however, was that at these Guide Shops, customers could try on clothing, but wouldn’t actually leave the store with anything in hand. Rather, once clothing was fitted and chosen, orders were placed online for home delivery.
According to anarticlein the Guardian, this supported the brand’s research that men wanted to shop in stores but didn’t actually want to leave carrying shopping bags. In return, store staff didn’t have to worry so much about inventory and could instead focus on customer experience, according to Bonobos CEO Erin Ersenkal.
Image Credit:The Store Starters
Utilize Tech as a Tool
Customers are more tech-savvy than ever, and so much of the reason why ecommerce businesses are crushing it is because shoppers are increasingly comfortable in a digital world. In order to survive, brick-and-mortar retailers must start incorporating digital elements into the in-person shopping experience.
According to an Engadgetarticle, some of these elements might include the following:
- Creating kiosks with digital screens that display personalized content to shoppers
- Offering digital concierges that greet customers and offer recommendations and information about special offers
- Sending coupons and other sales information directly to customers’ smartphones
- Having amobile point-of-sale (mPOS) systemthat enables staff to process transactions anywhere in store as opposed to traditional stationary cash registers
According to that same article, a number of other tech tools are expected to grow in popularity with offline retailers. These include beacons, which are set up at entrances of stores and send customers coupons, customized messages, and product recommendations via Bluetooth. Shoppers can also opt to have their data collected by stores, allowing businesses to further understand their customers.
Radio frequency identification, or RFID, is also useful to retailers and shoppers alike as an easy way to track inventory digitally. According toEngadget, some Ralph Lauren stores have the technology enabled in fitting rooms so that customers can instantly check for other sizes and colors of like items.
Augmented and virtual reality as well as wearable tech are already popular in the gaming and entertainment industries. It’s only a matter of time before shoppers expect to see their retail experience transformed with this technology. Augmented reality may assist customers in navigating through larger stores or provide additional product information, while virtual reality can allow shoppers to seamlessly experience and “test” products before purchasing them.
Technology enables a smoother, more personalized experience for shoppers in store, and in return, helps retailers understand their customers and provide a better experience.
Prioritize Sales Staff
Humans are social creatures by nature. We like to talk to others, receive personalized recommendations, and enjoy excellent customer service. There’s one thing that ecommerce businesses will never be able to compete with brick-and-mortar stores: putting a face on your brand and the human touch.
Therefore, it’s worth investing in your sales staff — the people who are there to greet your customers, provide information, and make suggestions while delivering seamless, top-notch service. It’s something not even artificial intelligence can ever truly replace.
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According toMarketingmagazine, Millennial shoppers are reshaping how the retail industry engages with young shoppers. Millennials are interested in learning about a company, the stories behind products, and are far more likely to make a purchase when this information is readily available. Empowering your sales associates with information not only about your company and product history, but of its values as well, is key to future-proofing your brick-and-mortar retail space.
Image Credit:OneReach
Be Accessible Everywhere
Gone are the days when brick-and-mortar stores can exists solely offline. In order to be truly competitive, retailers must embracemulti-channel selling— from online to mobile to retail — and the businesses that are most successful ensure they’re available to their customers on whatever channels they choose.
Setting up an online shop is easier than ever, allowing shoppers to search and compare what products you offer against your competitor. A recentMerchant Warehousepoll stated 85% of Millennial shoppers reported researching products online before making a purchase in store. By running an ecommerce component to your business, you’re catering to web-savvy shoppers. By having a brick-and-mortar store, customers can pick up the item they want immediately without having to wait for shipping and delivery.
Being mobile-friendly is just as important nowadays. Arecent presentationby Willy Kruh, global chairman for markets at KPMG, at the retail Council of Canada’s Store conference indicated that over 50% of Millennial shoppers would rather use a smartphone to make purchases than any other method. Kruh also stated that by 2020, 80% of the global population will own smartphones, which means companies should be seriously investing in mobile and omni-channel strategies.
A Final Word
As far as the retail industry is concerned, brick-and-mortar businesses are here to stay. The caveat is that only those retailers that are open to adapting and investing significantly into future-proofing their businesses will survive. Now that we’ve provided some tips, it’s time to start taking the steps to ensuring the longevity of your brick-and-mortar store.
