Tag: brick and mortar

Why E-tail Is Beating Retail

Lots of folks are lamenting the loss of brick and mortar businesses. Losses primarily attributed to web-based purchasing, particularly from Amazon.

In part the change is simply cyclical, the big, new guys beat up on the old guys. Think back to when malls first came to your town. Who suffered? The downtown shopping districts wilted as huge indoor malls with plenty of free parking and a bright shiny newness sprouted. In smaller towns it was K-Mart, then Walmart, that sucked the life out of the small local retailers. In communities large and small the old-time retailers often had just let things go. The stores had gotten worn, lighting wasn’t great, aisles were jammed, floor coverings were tawdry. The new places were a lot nicer to shop.

Some of used to joke that K-Mart never opened another checkout lane until there were at least 20 in line at each of those that were open. That’s a business killer. Look where K-Mart is today.

Then you saw what had been grocery stores pick off other businesses by making dry cleaning, banking, mailing and florists available at the grocery store. Many even added coffee shops, grills and buffets that hammered the local cafes.

And finally Amazon became more than a bookseller – much more. Amazon became the place for virtually anything you wanted to buy. Quick, free shipping, sometimes within hours, cemented the deal. But low prices and availability made it too good to pass up.

Here are a few examples of experiences folks I know have had over the past year.

One person was looking for an unusual light bulb for a bathroom light fixture. He went to the local electrical goods store where he had bought bulbs and electrical parts for years. They quoted him a price of about $260 for the bulb and said it would take a couple of weeks to arrive. Then the clerk made a surprising suggestion – “Why don’t you see what you can find online?” My friend did. Same bulb, 2 for about $60, delivered in two days from Amazon. Hugely convenient, massive savings.

Another was looking for American Ginseng, a heath product recommended by her doctor. She tried local grocers and drug stores to no avail. A few clicks on Amazon found the item, reasonably priced and it was in her hands in two days.

Another was looking for a watch battery. Tried Walmart with no luck three times in three weeks, tried a couple of big box stores where he found it for $3.99. Looked at Amazon, found a 20 pack for $4.99. Huge savings. Arrived in two days.

What comes next? Who knows, but price and service will continue to be important to many shoppers.

‘Click-and-Collect’ Boosts Retailers

The assumed demise of bricks-and-mortar retail stores in the age of e-commerce doesn’t appear to be playing out the way the real estate industry thought it would. In fact, a melding of in-store and online services – even for some brands that started out as digital-only – seems to be a winning strategy aiding a retail resurgence, says Todd Caruso, a senior managing director at commercial real estate brokerage CBRE.

“We are really seeing an upstart renaissance” within the retail sector, adds Garrick Brown, vice president of retail research at Cushman & Wakefield. Still, plenty of challenges remain for retailers, including oversaturation of physical stores and not enough investment in online platforms or in-store shopping experiences, Brown says. “You can’t compete with the likes of Amazon when it comes to convenience. You have to give consumers a reason to come into your store.”

Some bricks-and-mortar operations are tapping into consumers’ desire for instant gratification by offering online shoppers a faster in-store pick-up option and online returns. Such a tactic appears to be boosting traffic at physical stores: More than 53% of Americans say they use “click-and-collect” options which enable the online purchase of a product and an in-person pick-up at the store, according to the International Council of Shopping Centers. Of consumers who use click-and-collect shopping options, 61% report using them at least once per month. Further, 67% say that when they go to a store to collect their online purchase, they end up buying additional items from the retailer.

“The use of click-and-collect demonstrates the ongoing convergence of physical and digital,” says ICSC President and CEO Tom McGree. “Consumers want options when making their purchases, and the retailers who are offering the most channels are seeing more purchases being made.”

That may help explain why foot traffic at physical stores is climbing. Nearly 80% of consumers report visiting physical stores as much or more than they did two years ago, according to ICSC, with entertainment and dining venues seeing the most traffic.