3 reasons why e-commerce sites are opening brick and mortar stores

NYU Professor Scott Galloway proclaims, “stores are the new black in the world of e-commerce.”

For retailers, as for any company today, a strong digital presence is a mandate.

Millennials interact via social media, email, and mobile devices. To reach that demographic, brands need a robust digital marketing strategy. However, there is a limit to the strength of a digital relationship. For one, building trust is hard. Then, there is the is the lack of a tactile relational experience with the product or service. The entire experience, while convenient, is transactional.

By design e-commerce experiences limit the level of trust that can be established with a shopper. However, in-person experiences offer greater depth, and much greater opportunity to build trust. Brands that have a personal, physical relationship with shoppers have an opportunity to build a social connection.

Anthropologist Robin Dunbar’s research helps explain why. On average, Dunbar’s Number suggests, humans can have only 150 meaningful social connections. Part of the reasoning behind this is that the sensation of touch triggers endorphin release in the brain. The evidence is clear — it shows that humans are not yet able to develop robust social relationships via digital channels alone. To enter customers’ 150-connection circle, retailers must develop authentic relationships through offline channels.

Some companies have already begun rolling out their Dunbar’s Number strategy to relationship-building. These strategies are geared toward providing an authentic customer experience by building face-to-face conversations, enabling a complete sensory experience and meeting customers where they live.

1. Face-to-face interactions matter, a lot

In March, Apple updated its Genius Bar service. In the past, customers had to sign up for appointments online, or head to Apple stores for a walk-in appointment. But the walk-in process required customers to wait in the store and watch a scrolling display of names, lest they miss their time slot.

Customers now describe their issue to a store representative, who adds that information to the database of waiting customers. An algorithm determines wait time and queue priority. In the meantime, customers are free to go about their business. Apple’s new system alerts customers via text when it’s time to return to the store. The Genius bar experience has solidified Apple’s gold standard in delivering customer service.

The defining reason why the Genius bar is remarkable is because it facilitates trust, interaction and service between Apple and its customers. For its efforts, consumers voted the electronics giant as the number one company in Brand Keys’ 2015 Customer Loyalty Engagement Index.

Robert Passikoff, Brand Keys’ founder and president, writes:

“In a marketplace where brands struggle to create meaningful differentiation and engagement, those who [are] able to identify customers’ expectations and address them via authentic emotional values, will see tangible bottom-line results.”

Apple isn’t the only company to take the idea of authentic customer relationships to heart. Bonobos, the online clothing retailer, operates Guideshops, pop-ups that allow customers to try on items and speak with salespeople. E-commerce platform Shopify is in the midst of opening week-long pop-ups in a number of North American cities. The stores don’t sell anything; they house workshops where Shopify clients can learn about the platform and how it can help their businesses.

The goal of the Genius Bar, of Guideshops, of Shopify workshops, is the same. Provide customers an authentic, in person experience with the brand. This connection helps fuel trust — the second-most important factor behind Millennials’ brand loyalty, according to this NewsCred report. Trust breeds loyalty, and brand loyalty pays off, a BIAKelsey and Manta report finds. Repeat customers, it says, spend 67% more than new customers. Create trust-building authentic relationships, engender brand loyalty, realize stronger bottom line.

2. Brick and mortar enables a complete sensory experience

On Psychology Today, Kit Yarrow writes about sociocultural shifts that affect shoppers’ psychology. She references Edelman’s Trust Barometer, and notes that what people trust most are other people. It’s why, she writes, “‘crowd cred’ is more important than ever.” This crowd cred, she explains, is how “retailers that showcase the opinions of other shoppers — through things like ‘most pinned’ tags in stores or product ratings online — simply look more trustworthy.”

Part of what advances the perception of trustworthiness in shoppers’ minds is their sensory experience. “Sensory components of shopping are more influential than ever,” says Yarrow. “Today’s shopper… form[s] opinions through visual and symbolic information such as colors, assortments, and organization much more readily than words.” Customers want information. Information helps people develop opinions and, eventually, trust. Online product information helps, but nothing can replace the emotional connection shoppers feel when they can walk into a store, and compare and contrast physical items.

3. Meet customers where they live

Another company leveraging tactile experiences with consumers is Tesla. Tesla is showcasing their cars in pop-up on the back of a flatbed truck. And by doing this they are fundamentally shifting the paradigm. They’ll bring the dealership to you. Customers then have a chance to touch and examine the cars in person. As a result, Tesla will likely widen its potential customer base. Most importantly, these interactions will help Tesla develop authentic relationships with customers they wouldn’t otherwise reach.

Authenticity, trust, and loyalty

Results from a 2006 Innovative Marketing study suggest, “brand trust is an important antecedent of both attitudinal and purchase loyalty as two different types of brand loyalty.” And if repeat — loyal — customers spend 67% more than new customers, well, you get the picture. Building trust to develop brand loyalty isn’t a new idea.

They key is to building trust is through authentic customer experiences. A strong digital presence is necessary, but robust in-person relationships are critical. As a brand, you are competing with hundreds of other social connections for a customer’s attention, trust and loyalty. And the the only way forward is through authentic, tactile experiences.