Brick-and-mortar stores are still crucial in an omni-channel world
E-commerce has seen dramatic gains in traffic and revenue during the last five years. And considering eMarketer data indicates that by 2017 the U.S. will spend $434.2 billion dollars through web and mobile sales, it seems ecommerce is showing no signs of slowing down,. Another set of data from eMarketer shows that worldwide, $1.2 trillion was spent via e-commerce. That’s an astronomical amount of money, even more unbelievable is the fact that online sales only accounted for five percent of total retail sales in 2012.
Obviously, brick-and-mortar stores still hold the power of generating sales. However, it seems that retailers are losing sight of this to make advancements in their e-commerce realms. Marks and Spencer (M&S) — a British retailer specializing in clothing, and luxury home and food products — released an earnings report in May. In that report, CEO Marc Bolland stated “online has replaced Marble Arch (a monument situated on a traffic island in London) as our flagship store.” This is quite a bold claim for a company whose web sales only totaled 13 percent of all sales. Bolland added, “In a small store in Bristol you can have Marble Arch in your hand.” This holds true if you look at a brand strictly through sales. Sure, online, you can buy anything a company has to offer, but Bolland is failing to see the bigger picture.
The bigger picture is this: a brick-and-mortar store is much more than a sales channel. The physical, walk-in store is the culmination of every aspect of that company. From the products available to the cleanliness of the store, to the friendliness of the staff, everything within a store’s walls manifests what that brand represents.
It also presents the only opportunity for a retailer to interact with customers at every sensory level. Simply by existing, physical stores express how a brand looks, sounds, smells, feels, and when necessary, how it tastes. Online only engages consumers with sights and sounds of a brand. Effectively engaging all five senses in shoppers can maximize profits for retailers. For instance, Nike introduced scents in sneakers, increasing the desire to purchase by 80 percent. Also, a Harvard Business study concluded that people who negotiated car prices sitting in a hard chair offered almost 30 percent less than those people sitting in soft chairs. Countless other results regarding environment and intent to purchase can be found with a simple Internet search.
Another aspect of the brick-and-mortar shopping experience that e-commerce cannot (or has not yet been able to) replicate, is social. Zappos is currently undergoing efforts for online shopping to mimic a trip to the mall or department store. A lot of their efforts have been met with success, but ultimately, the social aspect — asking a friend if something looks nice, or sharing favor or disdain for brands — has not yet been replicated. It is hard to imagine that experience can be replicated by a unified e-commerce experience, as it is just easier to venture into another channel of technology and send an instant message or text while browsing the web.
There seems to be a constant struggle for retailers to merge the online and offline worlds into consistency. The reconciliation of both channels provides the same opportunities for all shoppers, across all channels. However, shouldn’t each unique channel come equipped with its own unique deviations for those opportunities? Retailers should be using brick-and-mortar stores to provide shoppers with opportunities they couldn’t possibly have online. But despite what a retailer plans, or doesn’t plan, shoppers will always have opinions about it. To paraphrase Nietzsche, if you choose not to decide, you still have made a choice.
Retailers should be making every effort possible to create a multisensory experience that shoppers have to have. Even though online shopping is a cost effective and easy option, companies should be giving their customers reasons to walk into the brick-and-mortar destinations. Abercrombie and Fitch (AF) and Hollister stores are examples of this theory. Their target audience is tweens and teens, and to accommodate them, the stores provide them with the superficial desires so many teenagers seek: loud music, a dimly lit showroom filled with the scent of an overgenerous splashing of cologne, and attractive staff members (you can sometimes find the male staff shirtless at AF). Even though the environment is a complete turnoff to almost everyone, AF has created the perfect place for its target audience to shop, and it gives them a sensory experience that cannot be found through mobile or web shopping. Take notice of environmental factors in your next shopping trip, it’s surprising how many environmental factors go unnoticed, but are aimed to please the senses and open up shoppers’ wallets.
A lot of emphasis has been placed on technology to improve sales and the customer experience. The numbers clearly show that the trend is not going to slow down. Despite the growth of e-commerce and the omni-channel experience, online shopping very rarely can fully provide shoppers with the same experience and influence as its brick-and-mortar predecessor. It might be a good idea for retailers to continue to develop and implement new technology for shoppers, while never failing to stop, observe, and make improvements to the basis of their brand — the physical store.