Why Go To The Store?
From The Buxton Co
There are some who think that most brick & mortar stores are eventually going away and that e-commerce can have a compound annual growth rate of 15% until the end of time. To which I answer, “don’t be silly” and “of course not.”
There are many powerful reasons for physical retail locations to exist. In fact, we are already witnessing the limits of pure-play models as online only players are opening more traditional storefronts (Warby Parker, Bonobos, Amazon and many others). Well-established direct-to-consumer brands like LL Bean are doubling down on a commitment to retail store expansion. And even with the explosion of online shopping, close to 95% of transactions still take place in a traditional store.
When you take out products that can be delivered digitally (books, movies, games and the like) in most cases, for most consumers, there is value in being able to go see, try on, or touch the actual product. Having a live conversation with a well-trained sales associate can be extremely helpful. Physical stores offer a social experience that can’t be readily duplicated via the web or smart phone. And, typically, you can take the product with you, rather than having to wait.
Having said this, digitally enabled business models ARE disrupting every category and chipping away at many historical advantages of bricks & mortar. Websites often have better information than in-store sales people. Assortments can be much wider and prices are often sharper. Next day delivery may be either good enough or simply more convenient than having to drive to a mall and deal with the crowds. And we can be certain that future innovation will further eat away at traditional store advantages.
The fact is, in most instances, the future winners will be retailers that blend digital and physical offerings. They will deeply understand customer wants and desires and build a tightly integrated, highly flexible hybrid model rooted in treating different customers differently. To gain share of attention and promote deeper engagement, segmentation and customer analytics will need to be taken to a whole new level. That means a transformation of most brands business model, but certainly not the elimination of brick & mortar locations.
By contrast, the losers will be those that blindly adopt all things omni-channel.
The losers will be those traditional retailers that continue to run a bolted on and siloed e-commerce channel.
The losers will be those who fail to see the interplay between digital and physical stores and close too many doors–and turn the remaining ones into boring museums of best-sellers and “me too” products.
The losers will be those who hold on to one-size-fits-all customer and marketing strategies and fail to amplify the truly relevant and remarkable.
Consumers will continue going to stores for many, many years to come. Whether they will come to your store is a different question.
Buxton is the leading customer analytics firm that helps organizations identify who their customers are, where those customers are located, and the value those customers have to the organization.
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