If the recent global pandemic has shown us anything, it’s that physical brick and mortar stores face much greater risks than online ecommerce stores. But just because digital commerce is thriving, doesn’t mean you have to close up shop.
4 Strategies for Surviving and Thriving
When you look at the incredible size and growth of Amazon and other ecommerce giants, it’s easy to see what the future has in store. However, just because billions of dollars in purchasing power have moved away from physical stores and toward online storefronts, doesn’t mean brick and mortar is dead. No – far from it.
While American consumers spend more than $600 billion online per year, ecommerce currently only accounts for approximately 16 percent of all retail purchases. That means 84 percent of all retail transactions are still happening in a physical store.
On the surface, that sounds encouraging and overwhelmingly positive. But consider this little factoid: By 2040, experts anticipate 95 percent of all purchases will be facilitated by ecommerce. That means the next two decades will be particularly brutal to retail business owners. The only survivors will be the ones who are willing to evolve with the times.
If you want your retail business to not only survive the next few years, but actually thrive, you have to shift your approach to satisfy the changing needs and demands of your customers.
Here are several ways you can accomplish this in a digital-first world:
1. Location Intelligence
Despite the growth of ecommerce, traditional brick and mortar retail still plays a key role in the consumer marketplace. Business owners with commercial property interests now rely on something known as “location intelligence” to enjoy sustained success.
“Location intelligence empowers retail business owners and managers to understand which types of customers are shopping at their stores, if customers are spending time shopping with competitors and how retail store performances compare to the overarching performance of similar retail stores at the national or regional level,” Crown Commercial Property Management explains.
In other words, location intelligence is real world analytics at play. It looks at foot traffic volume, consumer data, customer purchase behaviors, and transaction data to help businesses optimize inventory, store placement, and even store layouts.
2. Hybrid Sales Channels
Many retailers are adopting what those in the industry are calling “click and mortar” models. As the name suggests, this is a hybrid model between selling in physical stores and selling online. So rather than choosing between one or the other, these retailers do both.
Walmart is a great example of a retailer that went from 100 percent brick and mortar to also adding one of the industry’s largest ecommerce sites outside of Amazon. But you don’t need a billion-dollar balance sheet to do this. Small businesses can go hybrid, too.
3. Immersive In-Store Experiences
Everyone wants to talk about the advantages that e-commerce has over brick and mortar. And in many cases, they’re right. Ecommerce offers customers benefits and conveniences that physical retailers never can. But that street goes both ways. If brick and mortar businesses are smart, they can leverage some of the innate advantages that they have baked into their models.
To understand where physical stores stand apart, look no further than the shopping experience. Because no matter how much you enjoy the ease and convenience of Amazon, there’s something powerful about walking into a store, breathing in the aroma of the store, touching products, hearing the soft music in the background, and interacting with the shop owner. There’s an immersive and experiential element to shopping in a store. Business owners who embrace this will win in the long run.
4. Local Partnerships
Unlike ecommerce companies that have a generic, locationless presence, brick and mortar businesses are viewed as being a part of the community. This creates some intrinsic value for these physical stores. One way to amplify this natural benefit is by partnering with other local businesses. A partnership between two local businesses creates even more goodwill with local customers and allows each retailer to bring unique strengths to the proverbial table.
Adding it All Up
The pandemic showed us that people are much faster to embrace a fully digital marketplace than we ever realized. As the years pass and digital natives become the ones with most of the buying power in this country, ecommerce will surpass brick and mortar retail and leave it in the dust. However, there will be survivors. If you pay attention to forward-thinking techniques like the ones highlighted in this article, you’ll put your business in a position to be counted among this select group.