Don’t count physical retail destinations out just yet

In recent years, UK retailers have worked hard to offer consumers a broader variety of channels and touchpoints to accommodate their shopping needs. But what impact has this had on bricks-and-mortar shops? Are they still relevant in the age of ecommerce?

It would be easy to discount them but, according to Webloyalty’s report, The Unfaithful Consumer, physical destinations might still offer the biggest rewards of all with just the right mix of “investment, research and clever design.”

The reports of their deaths have been greatly exaggerated

Not so long ago, retailers without an online presence seemed doomed to fail, so they multiplied their efforts to create online shopping channels. At the same time, a multitude of online retailers were born to answer the needs of consumers and fill niches without the costly burden of a physical address on the high street.

The sudden explosion of products available online put enormous pressure on bricks-and-mortar shops, as a large portion of commerce moved from physical to online destinations, prompting gloomy predictions for traditional stores. But ironically, the success of ecommerce seems to have ensured the future of physical destinations.

That’s because “online real estate has become crowded and expensive” with “more than 800,000 online stores, all vying to attract customers through the gateway of Google,” explains retail analyst Sucharita Mulpuru from Forrester Research. So how can retailers distinguish themselves in such a competitive environment? The answer, it seems, lies in the physical realm.

The lure of “touch and feel”

In November 2015, Amazon surprised everyone when it opened its first physical location in Seattle. But the giant online retailer didn’t just open a regular bookstore; it created a new customer experience seamlessly intertwined with their successful online environment.

At the Amazon store, all the books face outward exposing their covers, giving them more exposure. The retailer offers a curated collection, which is based on customer ratings. Labels, placed under each book, display positive reviews from the website and overall star rating.

This creates a seamless customer experience as shoppers can navigate a space that’s very familiar to them but also get their hands on physical products, something missing from even the very best online experiences.

And that’s the key, says Guy Chiswick of Webloyalty. Both online and physical destinations “should be about experience, excitement and inspiration.” The Amazon store doesn’t offer all the books available online. Instead, it guides consumers in their search for a good book whilst offering them the “touch and feel” experience they crave.

This need for a more hands-on experience is also what prompted men’s fashion retailer Bonobos to open what it calls “guideshops” in key locations across the US. These are places where customers can try on clothes but orders are still made online and delivered at home.

The advantages are obvious. No need for a large shop or inventory but a great chance to interact with customers and get their feedback. And it works. “The average order size in Bonobos’ stores has proven to be twice that of online, with a higher proportion of new customers also coming through the guideshops,” according to Erin Ersenkal, the company’s chief revenue officer.

It seems many online retailers are now aiming to put their foot down in the physical world. Will this create even more pressure on existing destinations? Most probably but the report argues that existing retailers already have “access to the cream of the consumer market” that is people who already enjoy shopping so much, they’re willing to come to the store.

The challenge is to create a space they can’t resist and perhaps take inspiration from the online retailers’ innovative ideas.

Attracting the “cream of the crop”

According to The Unfaithful Consumer report, today’s “consumers are slightly jaded with their everyday retail experiences and actively seek new products, brands or experiences to keep them satisfied and engaged.”

This is where physical destinations can have an impact. When he opened his first shop in 2016, UK designer and successful online retailer Tom Cridland, argued that a physical location was an extension of his brand. “It is an invaluable opportunity for me to interact with our customers and to showcase some of our personality,” he says.

But the designer didn’t simply open a store, he created a unique experience. “We’ve got a record player and a vinyl collection in the shop, with LP covers lining the walls,” he adds. “We offer anyone who comes in Italian coffee, Earl Grey tea or even a Scotch.”

The types of experiences offered by Amazon, Bonobos and Tom Cridland are great examples of what can be accomplished in physical destinations. In their quest to gain a foothold on the high street, these retailers are applying fresh ideas to old problems.

Far from being obsolete, bricks-and-mortar shops are the only place where all the advantages of online and physical environments can meet to create truly unique shopping experiences. In the end, meeting the demands of customers who actually enjoy shopping “may be a big one” as it requires ingenuity, concludes Guy Chiswick of Webloyalty, “but the rewards could be even bigger.”

2016-08-09T11:14:51+00:00 9th August 2016|Unfaithful Consumer|