Survival of the Fittest – Why Physical Retail is Here to Stay
For the last few years, there has been constant chatter about the decline of brick and mortar caused by the rise of e-commerce. The story is that department stores and malls are seeing rapidly declining sales as consumers virtually flock to online stores. Thanks to the various startups that have developed convenient online platforms that help us get everything done with a few clicks—whether it’s ordering groceries on Instacart, satisfying a food craving on UberEATS, or utilizing 2-day shipping on Amazon to buy a picnic blanket for an upcoming beach day—we are able to make most purchases on our preferred devices.
However, the not so surprising truth is that most consumers actually prefer to shop in physical stores. Humans are inherently social creatures, and like to interact and engage with others—in person. We also enjoy using our five senses. We like to touch, smell, feel, see, and hear. Though entrepreneurs with an engineering background are working hard everyday to advance AR and VR technology, we are nowhere near a point where such experiences can—if ever—will replace actual reality.
But are all stores and categories of products created equal? The answer is an unequivocal no, which is why we see the widening gap in foot traffic between retail with antiquated, stale concepts and newer ones that incorporate elements that resonate with today’s consumers. Over the years, consumers have developed into more sophisticated shoppers who are savvy about retail, brands, and the companies that offer them. They are able to quickly and comprehensively conduct information search online, and educate themselves about the hottest new brands as well as about the organic ice cream shop that opened up halfway across the world. Armed with information about brands and stores that excite them, consumers can easily choose to avoid the rest.
Simply put, retail businesses that are winning consumers’ hearts are the ones that understand that in the world we live in today, the consumer herself is the most important channel. The reason is precisely that visiting brick and mortar has now become a choice that we make. When consumers choose to shop in brick and mortar, they do so because they are looking for an enjoyable, elevating experience. They expect to walk into a store that looks, feels, and smells pleasant and exciting. They expect to be able to browse an elegantly curated selection of items that pique their interest, and receive thoughtful recommendations and advice from employees should they want it.
Therefore, savvy retail businesses—regardless of whether it is an apparel store or a mall—know that the experience they provide must be differentiated, relevant, and authentic. Bluemercury, a beauty retail chain recently acquired by Macy’s, is an example of a retail business that is successfully expanding and opening new stores weekly. The company prides itself on having highly trained employees who are extremely knowledgeable about beauty and skincare, and are genuinely interested in helping their customers. They are trained to provide detailed expert advice and to never push products. They understand that selling their products is only part of the reason to have physical stores. When consumers step foot in a Bluemercury store, It is because they choose to.
Similarly, shopping complexes that are vibrant and buzzing with activity are the ones with dynamic, experiential elements that includes brand pop-up shops, live entertainment, upscale eateries, and wine tasting events. Eateries where customers can eat and shop are becoming increasingly popular. More than ever, the ability to seamlessly execute carefully thought out retail concepts is becoming a critical success factor. Physical retail businesses that resonate with consumers and adds value to their lives are not dying—they are here to stay.