Tag Archives: Brick and Mortar

How Real-World Retailers Can Better Compete With Ecommerce

With an influx of consumer purchasing decisions driving ecommerce today, retail stores are struggling to find innovative ways to keep consumers walking through their doors. Small businesses must take action in order to survive the digital evolution. Fortunately, by targeting the right consumers there are optimal ways brick-and-mortar retailers can thrive.

The Power of Touch

Stores definitely have the upper hand when it comes to physical interaction with a product. No matter how advanced ecommerce sites become with 360 degree visualization and high resolutions images, nothing compares to a consumer’s ability to touch, feel, and have a full hands-on experience with the products they are interested in buying. A majority of average shoppers, approximately 78 percent worldwide, prefer the initial engagement with the product rather than a virtual one (Retail Customer Experience, 2017).

But Retailer, I Want It Now!

We all have those Veruca Salt tendencies where we want things NOW! Brick-and-mortar stores definitely excel in that aspect. Take the Hema Supermarkets owned by Alibaba, for example. They’ve redefined the shopper’s experience by integrating online and offline shopping, deeming it “New Retail” (Alizila, 2017).

As part of the shopping experience, everything is powered by their mobile app. They can seamlessly order their groceries, check to see if it’s available in store, find detailed product content by scanning a barcode, and get everything they need within seconds. If retailers continue to incorporate consumer efficiency into their path of purchase, they will continue to have buyers walking through their doors.

The Comeback

As ecommerce businesses like Amazon continue to set the bar high in terms of availability, delivery, and speed, that doesn’t mean all other shopping experiences like in-store are doomed. In fact, many predict a comeback with 54 percent of shoppers confirming they still prefer it (Future of Retail, 2017).

Amazon may impress consumers with drone and same-day grocery delivery. However, the new generation of shoppers who grew up as millennials crave authentic experiences. A more personalized shopping experience is achievable in traditional brick-and-mortar stores in a similar analytical fashion as online retailers. Retailers that feature both in-store and online shopping experiences are now tracking behavioral purchasing patterns from online all the way to the door.

For example, Sephora, a major cosmetics company inhibits both aspects. The consumer is tracked via a Beauty Insider card that the consumer provides each time they make a purchase whether it’s in-store or online. If they are purchasing online, once they log into their Beauty Insider and begin buying makeup, it automatically tracks the type of makeup they like to buy. Once you arrive at the store, it pulls that buying history from your account and begins offering recommendations via Sephora’s Visual Artist, which is an in-store augmented reality 3D facial recognition program.

The Future of Retail

In the not-so-distant future, we may even be able to expect same-day drone delivery, robot customer service and more. One thing is for certain…Companies will only continue to develop ways to intrigue consumers via a connected commerce approach.

 

References

 

Retail + Boxing: When Worlds Collide (Part 2)

The build up and preparation to a fight, for a fighter is the hardest, the fight being the fun part. Not sure if a retailer would agree, their fight can go much longer that 12 rounds.

In part 1, we discussed the link between boxing and retail. Let’s get back on track!

The preparation for stores to hook a customer is preparing a consumer’s mind to think of their service first, no matter online or at a store. These stats speak for themselves (IC Real Estate 2017).

  • The probability of selling to a new customer is between 5 and 20%.
  • The probability of selling to an existing customer is between 60 and 70%.
  • 96% US adults shop online yet…
  • 94% of total retail sales are still generated in brick & mortar stores.

Those numbers calculated with the speculated number of eyes for this PPV, early estimates speculate the fight almost double what Mayweather vs Pacquiao did. With fans from both sides tuning in, the probability of getting new customers and keeping existing fans hooked, the potential revenue will be well worth it. Customers from every end of the spectrum will tune in to not just cheer on one side, but continue the view of their own path to purchase.

Tale of the Tape

Everyone digests the newest technology to make their personal shopping experience more convenient. Technology has started blurring the lines of every industry from retail, healthcare and food service and forever changed the path a consumer takes on their path to purchase.

The bout will be UFC star McGregor’s first boxing match – and against a legend who retired with a 49-0 record.

Technology takes the ease of online pay to stores with simpler ways to pay.  71% of shoppers believe they will get a better deal online than in stores (Digiday 2013). This leads everyone from restaurants to retail stores to rely on new tech trends to entice consumers from their phone and tablets using things like Groupon to bring consumers in by capturing them online. Instead of going and waiting at a doctor’s office, you can now facetime a doctor from your phone. Thus making it easier for a busy mom with a sick kid, to taking pressure off of doctors offices in need of dealing with more extreme situations. Food service now makes delivery easier, Uber first transformed the way we moved, now they are transforming the way we order food with Uber Eats. Amazon is continuing to tease their new technology that will bring grocery shopping to once that of as “something from the future”.  

In response, many brick-and-mortar retailers have started to use omni-channel fulfillment methods that leverage their store locations and in-store inventory in order to better compete in e-commerce. These omnichannel services, including ship-from-store and click-and-collect, can help retailers manage the transition to digital by: Increasing online sales by offering cheaper, more convenient delivery options for online shoppers.

No one channel is the clear answer, but companies that stay competitive will need to more tightly integrate all of their approaches, both physical and digital. Embracing the meeting of the two worlds seems like a much easier decision that the head to head collision, but come Aug. 26 everyone will be watching the two worlds collide. No matter your side, your interest level, sit back and watch history unfold before your eyes, because this truly is history in the making!

References

“13 Alarming Stats About Retail In Digital – DigiDay” 19 May, 2013.  https://digiday.com/marketing/13-alarming-stats-about-retail-in-digital/

“Online -vs- Brick and Mortar Retail Shopping: The Statistics – IC Real Estate” 15 March, 2017. https://icrealestate.com/2017/03/online-vs-brick-mortar-retail-shopping-statistics/ 

“Floyd Mayweather Jr. Vs. Conor McGregor Total Revenue Should Surpass Pacquiao Fight – Forbes” 28 June, 2017.https://www.forbes.com/sites/brianmazique/2017/06/28/floyd-mayweather-jr-vs-conor-mcgregor-total-revenue-should-surpass-mayweather-vs-manny-pacquiao/#42cb85615c21

Amazon: Prime-Time For The Grocery Industry

The grocery industry is the most pedestrian of retail endeavors – customers drive to stores, pick and pack their shopping, pay and then drive home. Many have tried to e-commercialize the grocery industry, but the business model never really seemed to work. The consumers desire to touch and feel grocery products before purchasing has been a barrier to widespread adoption of online grocery.

The food industry has traditionally been based around trust and price, not technology – and Whole Foods is known for providing a high level of trust and product transparency to its consumers through detailed product information. After a short dip into e-commerce, Whole Foods has refocused on brick-and-mortar retail growing 35 fold over the last 15 years (Fortune 2017)

And now, with the acquisition of Whole Foods Amazon sends a clear message to grocers that it is ready to play and, at least partly e-commercialize the grocery game. They’ve already dipped their toes in food and grocery in the past through Amazon Fresh and Amazon Pantry, but this gives them more robust access to high-quality food and more power to delivery grocery products more immediately to customers. It is also a bold statement that Amazon is serious about brick-and-mortar and at the same time this step finally fully validates cross-channel commerce as the future of grocery.

As the lines between online and in store have blurred, Amazon has realized that location will be a key driver for commerce success. Having access to Whole Foods’ 431 existing stores, gives them valuable distribution centers to bring fresh, localized products directly to customers. Amazon was also likely motivated to reach Whole Foods’ millennial audience and develop loyalty with the younger, more quality-conscious consumer.

This generation is more particular about where they buy their food and the ingredients in it, so Amazon will be able to earn the trust of these buyers through Whole Foods’ reputation and its strong identity as a trustworthy source for organic, GMO-free, high-quality food – that consumer trust will now be transferred to Amazon.  

Consumers need to be met wherever they are, whether in store or on their smartphones, but the importance here is an integrated approach. No one channel is the clear answer, but companies that stay competitive will need to more tightly integrate all of their approaches, both physical and digital.

Consumers are the key winners here, as the bar for success in the grocery industry is going to be much higher in the future. Competitive pricing, upgraded digital experiences, and more innovation will directly benefit customers.

Companies that aren’t paying attention to larger trends will lose as consumers demand for more product content; the value of an omni-channel approach to grocery; and the importance of consistent experiences across every channel.

To summarize, consumers aren’t tolerant of brands that look different online than in-store, and this is more important in the grocery market, as missing or misleading product information has the potential for serious harm.

Essential 2017 Omni-Channel Tips: How to Beat The Competition In The Digital Era

There is no denying it…2016 was a rough year for various brick and mortar retailers. The 2016 holiday season  wasn’t as merry as industry pundits anticipated, resulting in the following store closures:

  • Hancock Fabrics:  Filed chapter 11; all 255 stores    
  • The Limited: Filed chapter 11; all 250 stores
  • Office Depot/Office Max – Merged; closed 400 stores
  • Sears / Kmart:  Closed 142 stores (10% of its store base)
  • Sports Authority: Filed chapter 11; all 140 stores
  • Macys: Closed 100 stores
  • American Eagle: Closed 150 stores   

The ‘Amazon’ Effect Takes a Bite Out of Brick & Mortar

The root of their problems may lie with a company that isn’t even competing with them for customers at the mall: Amazon.com. Amazon has been poised for success in its pursuit of relentless innovation and a seamless blend of the warehouse processing efficiencies with the e-commerce shopping experience.  

It is estimated that Amazon makes up about 7% of the U.S. apparel market, and that figure is predicted to increase to 19% by 2020 (Barrons 2016). Moreover, the 2016 “State of Amazon” study revealed that Amazon is often involved in almost all online shopping activities (Consumer Goods Technology 2016). Approximately 9 in 10 consumers will check Amazon even if they find a product they want on another retailer’s website.

Blurred Lines & Blended Commerce – The Changing Face of Retail

Today’s consumers float freely from physical shopping to virtual experiences as traditional and modern shopping models unify  into blended commerce. Pure e-commerce retailers are evaluating retail store fronts, while traditional brick and mortar retailers are rapidly pursuing online and mobile commerce channels.

“The shift in retail to the Internet is a huge change… every retail company is trying to manage the transition. It’s not well defined or understood and there’s no road map” said Simeon Gutman, a retailing analyst for Morgan Stanley (New York Times 2015).

Given the consumer’s lofty expectations for an integrated cross-channel shopping experience, there is a steady race to remain relevant in a hyper-competitive retail environment.

While Amazon is expanding its physical presence, Walmart is strengthening its ecommerce strides (eMarketer 2017).

At the beginning of 2017, Amazon announced that it will open its newest brick-and-mortar bookstore in New York City. At the same time, Jet.com – a Walmart subsidiary – announced that they purchased online footwear retailer ShoeBuy.

Achieving Operational Excellence Between Brick And Click

Clearly, today’s world of commerce requires a multi-pronged approach. Trying to match the convenience of Amazon with an integrated supply chain with personalized and trusted product content is no easy feat.

A connected commerce approach supports a harmonious model in which transactional and product data work together to optimize the supply chain process.

1WorldSync and DiCentral have set out to explore how brick & mortar retailers can develop the operational backbone that supports e-commerce investments.

Download their joint whitepaper now  and discover how to:

  • Equip your organizations with strategies that set leading digital commerce business apart
  • Connect cloud-based B2B integration with product content aggregation and syndication;
  • Achieve streamlined end-to-end digital commerce in a cost-effective and scalable manner.

References

  1. “Amazon Could Be Largest U.S. Company by 2020.” Barrons. 2 June 2016, http://www.barrons.com/articles/amazon-could-be-largest-u-s-company-by-2020-1464866783
  2. “Amazon Set to Dominate 2016 Holiday Shopping”. Consumer Goods Technology. 27 September 2016. https://consumergoods.com/amazon-set-dominate-2016-holiday-shopping
  3. “Walmart Plays Catch-Up with Amazon.” New York Times, October 22, 2015. https://www.nytimes.com/2015/10/23/business/walmart-plays-catch-up-with-amazon.html?_r=0
  4. “Omnichannel 2017: Amazon and Walmart Make Moves”. EMarketer. 9 Jan 2017. https://www.emarketer.com/Article/Omnichannel-2017-Amazon-Walmart-Make-Moves/1015000