Thriving in the Digital Age: The Role of Brick and Mortar Stores in E-commerce

The shift towards online shopping is undeniable, and the traditional brick and mortar stores face a competitive landscape. However, research conducted in the INFORMS journal and Information Systems Research sheds light on the critical role that physical stores still play. This article delves into how these stores can adapt and succeed in the era of e-commerce, highlighting successful strategies and the interplay between online and offline channels.

Understanding the Consumer Journey

According to the research, brick and mortar stores significantly influence consumer decisions and can even boost online sales. Studies show that the opening of a new store can increase online sales in the surrounding area by an impressive 29 percent. This suggests that physical stores are more than just a complement to online channels; they are integral in driving online sales. Retailers recognize that today's consumers are omnichannel, meaning they complete their purchase journeys using both physical and digital channels.

Adapting to Omnichannel Trends

Retailers can leverage their physical stores to offer a seamless shopping experience. For instance, customers might search products online, place orders, and then pick them up at the store. Alternatively, they may visit the store to evaluate products before purchasing them online. By integrating physical and digital channels, retailers can enhance customer satisfaction and drive sales.

Redesigning and Marketing Physical Stores

To stand out, retailers need to redesign and market their physical stores effectively. This involves exposing and promoting the strengths of these stores, such as the ability to touch, feel, and evaluate products. By focusing on specific products that benefit from this hands-on experience, such as clothing, shoes, perfumes, and high-value items like jewelry, retailers can attract and retain customers.

Strategies for Success

Retailers can think of their physical stores as showrooms, showcasing items both in the store and online. By carefully rationalizing store sizes and inventory, retailers can reduce costs while still offering the best customer experience. Associates can engage customers with immersive shopping experiences, introducing them to a wide range of products available across different channels. Tools like mobile devices can help illustrate the full product range, enhancing the shopping experience.

Successful companies like Warby Parker and Bonobos have embraced this strategy. Warby Parker’s inventory showrooms keep a limited quantity of each type of eyeglasses, allowing customers to evaluate and purchase directly from the store, while receiving orders from the online channel. Bonobos offers an appointment-based system, where customers can get fitted and choose items at their preferred color and size, which are then shipped to them.

Convenience and Customer Service

To further enhance customer satisfaction, retailers can experiment with tiered pricing. This allows customers to pay more for immediate take-home convenience or less for later delivery. Additionally, allowing store returns for online purchases can boost sales and provide customers the option to seek replacements while returning the product.

Conclusion

In a digital age, brick and mortar stores and e-commerce are not in opposition but rather in a symbiotic relationship. Companies that adapt and integrate these channels effectively will thrive. Online retailers need physical stores to offer a hands-on experience, while physical stores need e-commerce to increase their reach and sales.