retail news in context, analysis with attitude

Good piece on TheStreet.com suggesting that while “the Internet killed the music business, ruined the newspaper industry and has effectively brought the publishing world to its knees, and for years there has been speculation it would do the same to bricks-and-mortar retail stores, as consumers began to flock online for their shopping needs ... rumors of the death of the bricks-and-mortar store may be vastly overstated.”

The story concedes that more people than ever are shopping online, but that “doesn't mean they'll stop shopping at stores completely. Indeed, for most retail sectors, a physical store can serve a fundamentally different function, giving consumers the ability to see, taste and touch the products in a way that is impossible online. The challenge for retailers in the future, industry analysts say, will be to figure out a way to play up the strengths of the bricks-and-mortar store while incorporating new technology into the experience.”

According to TheStreet, that means creating a more customer-specific experience in the store that is designed “to tailor products to the demands of individual customers in the same way popular e-commerce sites such as Amazon target customers based on purchase history.” And, the story goes on, “As stores get better at matching the products they offer to the products their consumers actually want, it will eventually allow many retailers to reduce the size of their stores while remaining equally or even more productive and profitable than with a larger space ... At first blush, the idea of shrinking stores may seem like the ultimate sign they are in a weaker position, but experts say bigger isn't always better. A smaller store may not only function more efficiently, but be more attractive to customers.”

And, TheStreet writes, “Ultimately, even if retailers make their bricks-and-mortar stores into exciting destinations and provide quality customer service, all this guarantees is that customers will choose to stop by the store to waste a few minutes before going elsewhere. To get customers to buy in the store rather than look for the same product elsewhere online, stores may need to begin offering items unique to the physical store.”
KC's View:
They’re preaching to the choir here.

It is foolish for people to think that online shopping will ever replace the physical experience, but it strikes me as a no-brainer to begin thinking about the two as an integrated opportunity to speak to the customer, listen to the customer, and provide goods and services to the customer in fundamentally different ways. Some products will work better online, and others will work better in the store; the customer of the future will want options, and the retailer that can provide a variety of them around a central theme and world view - whatever it happens to be - will have the differential advantage.

And yes, the physical experience will have to be more customized, more unique, more differentiated if retailers are going to make their footprints stand out in the communities they serve.