The Solution for a dying Brick and Mortar Retail Industry
The brick and mortar industry is DYING!
Macy’s just announced more store closings and soon many more.
Economics have been changing since man has bartered or exchanged goods.
The spice trade routes have allowed the world to connect. Muslim businessmen would travel long distances on camels to caravan across the middle east to the Asian continent in search of spices and silk clothing. (Kind of like how the internet brought the world closer)
Then humans started evolving from an agricultural economy to more industrial. People had to change. They didn’t have to work on a farm anymore. They could work in a factory to create goods and then needed to purchase food and clothing because they didn’t have time to make it on their own.
Nowadays, thanks to the internet and rapid growth of technology according to Moore’s Law, our economy is moving into light speed. This has officially transformed us to more of a DIGITAL Revolution.
Now I’m reading stories that soon people will stop owning cars because Transportation As A Service (TaaS) will be normal with self-driving cars that will pick you up and drop off anywhere you want. Soon even for FREE.
Think about how Netflix business model has evolved in the last 10 years and outlasted companies such as Blockbuster.
Our economic history has evolved and there is no turning back.
You can’t just bring back those jobs and stop evolving the economic revolutions.
So What is the Solution for these retail Companies?
Well let’s look into why online shopping is successful today. How the heck is Amazon the largest retailer but doesn’t have any large market share of brick and mortar retail stores across the world?
People like to shop online because of the convenience. You don’t have to go to the whole process of driving to the store, and mindlessly wonder around until you find what you’re looking for. Then go into the process of deciding whether you should really purchase the item or not.
This is the traditional buying process. Retailers then try to strategically position products on end caps or move all staple products in the back of the stores to force you to pass all the things you don’t want.
Now if it’s a high end item than more likely online research and reading reviews were done well in advance. Then hopefully your buying decision is made up and now you’re just going to the store to purchase.
Shoppers actually prefer to buy it online is because you don’t want the hassle of going to the retail store and find out it was out of stock or never even available. Worse yet find out that the price was even higher than what you seen online.
Large ticket items such as Appliances, Electronics, or Vehicles can be very exhausting to research online. They just want to ensure they are getting the best value for their money. If that means doing all the heavy lifting of research online then they will do it!
The solution is to find a way to merge these two technologies.
- Online — How can I ensure I’m getting the best product for my money by research reviews and convenience
- Offline — I want to be able to touch, feel, play, and take it home right away.
Merging the Best of both worlds
Understanding your target market is very important to decide how to effectively make the buying process easier for your customer.
I am a Generation X and love the internet but didn’t grow up with it. When I was born the coolest technology was the Sony Walkman Cassette player and the VHS tapes. Basically I grew up going to the store to purchase whatever I wanted.
The internet has allowed me to be a better consumer in real-time. I don’t need to trust the reviews from experts at “Consumer Reports.” I can just go to Youtube and watch a review from an everyday normal person just like me.
That is what I like and it’s an important tool in my buying process.
Now what I don’t like about buying things online is
1. Shipping times and 2. The return process.
This is why I believe Walmart is getting it right. They basically eliminate the negative aspects of shipping times and return process. This gives them the competitive advantage.
Walmart is positioned to be much bigger than Amazon. Walmart’s infrastructure is already in place and they have a vast amount of reach for people.
I even have about 5 Walmarts within a 5 mile radius that I can shop too. Now people will still goto the brick and mortar stores to buy their perishables, food, and health/beauty products. These items have a high utility that requires people to shop.
They both playing catch up.
Walmart is trying to catch up to connect their Online and retail store
Amazon is trying to expand to their own idea of a Brick and Mortar store and speed up delivery times.
Like I said the competitive advantage goes to Walmart because having the footprint and reach of brick and mortar stores is critical.
Here is my break down of the solutions to ensure brick and mortar business stay relevant.
In summary the basic premise is rather simple. The business models has to continue to change and all the major retail companies need to stay on the cutting edge technologies. The buying process has completely changed and it’s important to be in front of it to stay in business.
- Offline Business needs to focus on how to integrate their Business Online. Their inventory system needs to be highly accurate for both their online/offline inventory.
- Cut down checkout times
- Focus on Buy online and Pick up at the store. Make the transaction faster and accurate.
- Provide good FREE WIFI in the stores and track shoppers habits (Gather Analytics) Find out where shoppers are going to more. What products are they scanning?
- Create a fun shopping experience (Social shopping by creating high engagement)
In the future, I will go into more details on my solutions. Let me know what you think by posting a comment.
Originally published at Thomas Wooldridge.