E-commerce. Online shopping. Web purchases. We hear a lot about consumers purchasing items from the Internet.
However, Forrester, a Massachusetts-based business technology research firm, estimates that more than 85 percent of all U.S. retail sales happen not online, but instead in traditional brick-and-mortar stores. Still, the data speaks for itself: more than 40 percent of American internet users report making online purchases several times per month and 14 percent say they actually prefer buying products through e-commerce instead of actually visiting a store.
With numbers like that, the question becomes, “Is there a future for brick-and-mortar retailers?”
Many analysts and even some local retailers answer with a resounding, “Yes!”
“Absolutely, there is a future for brick-and-mortar stores,” says Keith Fosse, a 29-year veteran of Lowe’s, for who he served in a variety of positions including district manager and regional sales director. He retired from the national home improvement retailer as store manager of the Carbondale store in 2016. “As a matter of fact, I think traditional stores maybe even more compelling now than before.”
Fosse says he believes that there are a variety of reasons he is optimistic about traditional retail, including a change in tax law.
“Online retailers have lost some of their advantages,” he explains. “When Amazon and some of the others cam to scale, they were taking advantage of tax loopholes so everybody was getting an instant discount because they weren’t paying sales tax.”
Fosse and others admit that competition with online sites has forced brick-and-mortar stores to become nimbler, but he feels that is good.
“There is no question that the retail community is going through tremendous change, but let’s not ignore the historical perspective,” points out Rob Karr, president and CEO of the Illinois Retail Merchants Association. “Retail has always been and I think will always be the most revolutionary of sectors.”
Karr says he thinks we are entering a period of hybrid shopping – a time when buying patterns merge.
“We used to think of online and brick-and-mortar as polar opposites; opposite ends of a straight line, but I don’t think that is the case anymore. I think technology and the demands of the consumer have turned that line into a circle and the ends are touching, even overlapping,” he says.
Data supports Karr’s thinking. The same report from Forrester shows that 53 percent of purchases are digitally-influenced. Consumers are “shopping” online before making their purchases – armed with detailed product information gleaned online, pervious buyers’ ratings and reviews and price research – in traditional stores.
Even though buyers know a lot about individual items or about trends in general thanks to online research, many consumers still yearn for something that internet stores cannot provide: interaction with the product.
“With a brick and mortar store, you are able to actually see the product, try the product on and simply experience the product before you make a purchasing decision,” explains Meredith Ashe, owner of M boutique in Marion. “Often people will order online and they have to send it back because the really didn’t know what they were getting. As easy as one-click shopping is, it definitely has disadvantages.”
Karr adds, “It’s not just a matter of putting a jacket or dress on a website and saying, ‘Here it is for 20 percent off.’ It’s about figuring out how to make an experience with the customer. There is a significant segment of the population who wants interaction.
That is where traditional storefront operations thrive, Ashe explains.
“Customers actually get to interact with the product, plus there is a level of customer service not offered online,” she says.
Fosse agrees, using automobiles as an example.
“Sometimes you just want or need to see the product physically,” he explains. “You want to test drive that car, you want to see the color of paint, you want to feel the leather. Sometimes I think that trumps any perceived convenience.
While some say that online shopping is more convenient, Fosse disagrees.
“When we think of online be convenient, it’s convenient only from the perspective that you can order it anytime and it will come to you, but when you need it now, brick-and-mortar is actually more convenient,” he says.
That brings Karr back to his straight line vs. circle analogy.
“We’re seeing it come together, he says. You are seeing remote sellers getting into brick-and-mortar,” he says. “It’s becoming a marriage of the two systems, all fighting for what the consumer wants. It goes back to what the consumer is demanding. It used to be that advertising drove the consumer to a certain extent and now the consumer is driving everything.”
“Look at what Amazon is trying to do now,” Fosse adds. “They’re trying to figure out how to get more local; they are trying, in fact, to create a brick-and-mortar infrastructure; they are investing in operations like Whole Foods, trying to figure out how to operate with more of a community presence.”
Developments including automated customer pick-up kiosks at some Walmart locations and grocery stores which offer clients the options of ordering products online and picking them up locally are examples of the blending of online and brick-and-mortar operations.
“Brick-and mortar shops have what people actually are looking for — that is the ability to actually see the product, try it on and get customer service,” Ashe says.
For that reason, many online entrepreneurs are looking to expand their businesses with retail space. Katie Fowler Hawkins, owner of the Lavish Bath Box online subscription service, is one example. She is adding a Marion storefront to her business.
“You’ll be able to buy our boxes in the store, but you’ll also be able to get one-off products that don’t fit in the subscription model, per se,” she explains. “It’s a good way to build on what we already have established.”
Regardless of industry, Fosse says that brick-and-mortars have to focus on being competitive with competitors both online and down the street.
“Even though you may not be the cheapest, you might not be the biggest or you may not have an online presence, you can continue to provide a great quality product at a valuable prize with great levels of customer service. That always wins.”