The Web’s Influence on Brick & Mortar Stores

Seems like the 21st century is a bad time to be a brick and mortar retailer. Americans have long been accustomed to mail-order shopping, a tradition that started in the late 1800′s with settlers in the west. Considering how many commercials you see trying to get you to buy something right then over a toll-free number, someone must actually order random things over the phone, too.

Then came the internet. With promises of unlimited selection and the convenience of shopping in your pajamas, eCommerce was poised to take over traditional catalog orders. Promises of free shipping, then, started luring customers away from traditional stores, too. Today’s onslaught of downloadable eBooks, music, movies, and apps from iTunes, Amazon, and more changes it yet again, replacing both the stores and the very things they used to sell.

Where does traditional retail fit in today? Can it adapt to the changes, or remake itself into retail 2.0 by leveraging the internet along with their physical locations?

Retail Meets the Internet

In the late 1990′s, everyone and their dog suddenly had a website. Stores of all sizes, from car lots to small grocery stores, had banners up with their new .com address for everyone to see. While the early 2000′s made it look like the golden age of online retail had passed as soon as it started, many companies such as Amazon.com and Apple’s new iTunes music store kept innovating and bringing more and more commerce online. Today, many of us order online by default, and retail stores have had to innovate to keep up.

Most traditional stores have struggled to be competitive online, and usually take one of two approaches: use the website as a separate retail center, or use the site as a catalog to browse what they sell in-store. Some stores have taken their sites even further, though. Walmart hasn’t attempted to match Amazon’s free shipping directly, but they do offer unlimited free shipping to any Walmart store with Site-to-Store. This lets them add more selection online while still getting customers into their stores.

Keeping Location Important

Then, the past couple years have brought an explosion in smartphones and social networks. Location sharing networks, such as Foursquare and Gowalla, have encouraged stores to offer special prices to users that check-in with their apps. The trend has grown enough for heavyweights such as Facebook to jump in, with their own Facebook Places check-in system. Many stores have jumped on this trend that puts more emphasis on local businesses, though some have been overwhelmed with demand for the deals, leaving customers frustrated instead of excited over their local businesses.

Then, coupons have suddenly become the most popular thing again, with Groupon and LivingSocial, among others, competing to be the most popular deals network. Some stores have gone along with the trend, though others have been frustrated by the lost revenue from the offers. These both show that traditional stores still need to tred carefully with the latest internet fads. While bringing the web into your store experience can get you new customers, you can also end up being essentially DDoSed in person by the huge influx of customers.

Pervasive Free WiFi

More and more stores and restaurants seem to have free WiFi nowadays, and many of us compulsively check for public WiFi wherever we are. Stores can use this to their advantage to improve customers’ experience in the stores. Barnes & Nobel has done a great job with this by offering free WiFi access to anyone with a Nook eBook reader. They additionally let Nook owners browse though the full contents of any Nook eBooks on their devices in the store, much like you can flip thorough a paper book in the store. It’s meshing the digital and real world, and seems like a great strategy for B&N. After all, anything you can do to get more people in should improve sells overall.

Even without WiFi, shoppers are using internet in stores. I’ve cross-checked prices using EDGE connections, and some stores that match competitor prices have even matched Amazon prices I’ve found online in the store. Most customers would simply leave the store and order online otherwise, but matching the price makes them much more likely to buy something else in-store and come back later for other purchases. I’m always pleased to find stores that are willing to compete with websites, and it makes me much more likely to pop back in for something else I need later.

The Future

Going forward, I hope to see physical stores increasingly embrace the mobile internet to enhance their in-store experience. There are plenty of times that holding something before buying it can be nice, and Apple’s stores have shown that a high quality retail experience that attracts people away from their Amazon shopping cart can still be achieved today. They’ve done this by creating an attractive experience that’s more fun than buying a computer or iPod from their website.

First, stores should take design cues from the best online retailers. Sure, Amazon offers millions of books, but they also excel at curating the best of their products, making them appealing to the customers who are most likely to buy them. With limited shelf space, brick and mortar retailers need to see their job as a curator that presents a showcase of goods that offer value to their customers. A well organized and designed store can still be fun to visit, but no one likes searching through random items to find that obscure thing you’re looking for at a superstore.

Then, stores should take advantage of customers love of eCommerce and smartphones to make in-store shopping nicer. For example, stores could include a store directory on the local free WiFi network that was designed for mobile devices. Shoppers could then find their way around the store from their phone, or search for that hard-to-find item and discover it quicker than ever.

What are your thoughts on the future of eCommerce and local retail? How can retail reinvent itself in the 21st century? We’d love to hear your ideas in the comments below!