Ecommerce and Brick-and-Mortar

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We know that the average shopper has needs that are met in-person, as well as ones that are met through digital channels. How can companies balance their efforts between online and offline for the best possible results?

 

Stats that prove the transition to online shopping

 

When we think of a store, the first thing that might come to mind is a physical one. We walk through the door and can browse through the aisles, picking products up and trying things on before making our decisions. Virtual reality may offer “full immersion,” but the real “full immersion” is reality itself: the product in your hand.

 

However, that value of in-person inspection comes at the cost of relative convenience, as more options have emerged online and people have grown increasingly comfortable shopping for and paying for items through their computers and mobile devices. While the landscape is changing, the position of storefront retail is changing; and yes, it is clearly on the decline. Fourth-quarter industry statistics from Investor’s Business Daily show poor numbers for all the retail groups the publication monitors; in fact, the Department Stores category is last out of all industries – ranked 197 out of 197. The good news is that this devastation to the world of B&M is aligned with an expansion of e-commerce sales – a 29% overall rise during the 2016 holidays.

 

Another way to see this trend is in comparing the Q4 2016 results to determine the “online growth edge” for a couple of major box stores (IBD):

 

Brand E-commerce Storefront Online growth edge
Target +34% -1.5% +33%
Walmart +29% +1.8% +27%

 

As e-commerce continues to become more sophisticated and better able to address consumer expectations, what is the value of a physical storefront? We know it’s not the heavy-hitter it once was. It’s not just clear from the above megabrands that are straddling the fence but from those that have gone bankrupt or are closing their stores nationwide, such as American Apparel, The Limited, Wet Seal, Aeropostale and Pacific Sunwear.

 

Is B&M sinking into oblivion?

 

There is sufficient evidence to suggest that the physical store can be viewed as similar to snail mail: it is useful to many now but will only become increasingly irrelevant, says this perspective. That’s not quite right though. In essence, the rise of digital does not signal the demise of brick-and-mortar so much as an evolution of the way that people shop and a shift in the role of stores to serving a more functional, mundane purpose as a distribution point.

 

Boston Retail Partners principal Ken Morris uses the example of Restoration Hardware to make this case. The showrooms of the brand are settings for inspiration, notes Morris. “[T]hey’re not really selling anything there,” he says. “It’s like a giant 3D real-time catalog.”

 

BRP’s vice president and practice lead, Perry Kramer, adds that the service experience needs to be treated as paramount in order to win at storefront retail in the new age. The example he gives is the Apple Store, where you can try products and get advice from salespeople who are generally considered well-trained and helpful.

 

How omnichannel goes beyond multichannel as an integrator

 

You may have heard the word omnichannel a bunch of times and perceive it as one of those annoying marketing buzzwords; but actually, omnichannel is an important business concept.

 

You can think of omnichannel as a type of multichannel or even the newer, savvier evolution of multichannel. “[A] multichannel approach to sales that seeks to provide the customer with a seamless shopping experience,” TechTarget defines omnichannel, “whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.”

 

What differentiates omnichannel from multichannel? In a nutshell, it’s integration. Omnichannel involves backend integration rather than just diversification of channels. Compare the above description of omnichannel to a definition of multichannel provided by Jay Acunzo in the HubSpot Blog. Acunzo defines the simpler multichannel concept as communication across various channels, both digital and otherwise. Multichannel is about marketing in many different places at the same time; omnichannel is about bringing together the insight from each approach.

 

There is another aspect of omnichannel that is evident in its name. While multichannel is about many avenues you can go (see its prefix multi-), omnichannel is about addressing every possible channel (see omni-). Omnichannel is a more thorough approach based on the idea that people now expect to be able to shop, experience your brand, and engage with you as a customer through a full range of possible means (for example, within all the various social media sites, brick-and-mortar stores, your websites, and your mobile apps).

 

To better understand how an omnichannel strategy can be leveraged by a brand, just look at what customers think should be available to them. An expectation of nearly three-quarters of shoppers (71%) is that brands will have in-store inventory data available online. Similarly, an expectation held by half of customers (50%) is that they be able to buy on the Internet and pick up items in-person (“Customer Desires vs. Retailer Capabilities: Minding the Omni-Channel Commerce Gap,” Aberdeen).

 

The final, fundamental reason why omnichannel is such a key concept for your company’s growth is that these consumers are big spenders. “Omnichannel shoppers are typically a retailer’s most valuable customers—spending over five times as much as those who only shop online,” notes a Bain & Company report. “Creating a great experience for those customers is critical, and not doing so is very risky.”

 

Forgetting the money and simply looking at omnichannel in terms of user experience, your users should be able to shop more efficiently and without having to stop and start along the way. Customer service should be as sophisticated as possible; and brands often neglect that concern, so integration of different touchpoints via omnichannel is a powerful differentiator.

 

3 brands with omnichannel to emulate

 

Here are three household-name brands with omnichannel user experiences that are noteworthy and worthy of mimicry:

 

  1. Disney – This incredibly popular family brand has embraced omnichannel with its My Disney Experience tool, which allows consumers to comprehensively plan their trips, from getting Fast Passes to the park to pre-determining dining locations. Within any Disney park, you can find attractions and wait times via the mobile app. The Magic Band program, which offers Fast Pass integration, adds further capabilities and complexities: hotel room key functionality, storage of photos with Disney characters, and food ordering.
  2. Bank of America – This brand is considered a bellwether in finance related to omnichannel. The company’s tools include the ability to deposit checks and schedule appointments both via mobile and on desktop. Additionally, customers are able to pay their monthly bills seamlessly through any device.
  3. REI – This company provides clear product data throughout its customer ecosystem, says Aaron Agius in the HubSpot Blog. “[T]hat kind of internal communication will keep customers happy, satisfied and returning back to their store again and again,” he adds.

 

*****

 

Hopefully, the above advice can help you address the need for balance between online and offline shopping at your company. Do you need help getting your e-commerce site up and running, or improving the performance of your current site? At Total Server Solutions, we support all of the top shopping cart applications and also offer merchant accounts so you can sell and accept payments quickly and easily. See our secure e-commerce solutions.