Breaking Down Walls: Four Trends Reshaping the Future of Brick-and-Mortar

Digital’s transformative influence in retail is a theme that my colleagues and I have written about extensively, and it’s real. But despite all the headlines surrounding the growth of e-commerce and mobile sales, there’s a glaring figure that’s often overlooked: With only five percent of total U.S. retail sales being made through exclusive online retailers, such as Amazon, and another five percent via the online channels of traditional brick-and-mortar stores, the remaining 90 percent of retail sales still occur in-store. In other words, brick-and-mortar is—and will continue to be—a vital fixture in the industry moving forward at least for the near future. In fact, even some of the most successful brands that began online—including Birch Box, Warby Parker and Rent the Runway—have experimented with or permanently set up shop in a physical location. 

Still, while brick-and-mortar is here to stay, traditional in-store offerings no longer suffice. If they hope to compete, retailers need to respond to shifts in consumer behavior, develop innovative and integrated technologies and adapt their physical stores accordingly. With that in mind, here are four of the tactics and offerings that are blending the lines between in-store and digital sales, and reshaping the future of brick-and-mortar retail: 

BOPIS (Buy Online Pick Up in Store): Also known as “click-to-brick,” this cross-channel offering caters to customers’ desire for quick and easy access to products, providing them with the ability to almost immediately retrieve their online purchases at a nearby store. Similar to reverse showrooming, BOPIS encourages customers to end their journey in the store, but not before researching and purchasing the product online. Not only does it boost convenience for shoppers, it also drives in-store traffic.  As I’ve previously discussed, if this offering continues to grow, some stores may even evolve into pick-up locations for shoppers, meaning retailers may have to consider supply chain shifts to keep up with demand. 

Alternative store formats: As Ted Vaughan noted earlier this year, successful brick-and-mortar retailers will be those that embrace the advantages of showrooming and integrate them into their customers’ journey. To see this in action, look no further than some of the latest trimmed-down store formats, as highlighted in this article from The Future of Commerce.  Using these models, retailers feature less inventory on the floor, and the store serves more as a product showroom that offers shoppers the ability to evaluate and interact with merchandise before making a purchase either in-store or online. In turn, retailers can minimize the cost of carrying inventory, improve online sales and create a more cohesive customer experience.

Seamless checkout: Since customers have grown accustomed to the convenience of one-click purchasing via online and mobile platforms, physical stores have responded with similarly streamlined in-store checkout experiences. Nordstrom, for example, has implemented a seamless approach in which associates carry around a tablet and have the ability to checkout customers from anywhere on the floor. Not only do customers appreciate the time they save waiting in line, but stores can also boost their sales per square foot through featuring products on floor space that would have otherwise been occupied with cash registers.

Geo-targeting: Location-based technologies could be one of the keys to bridging the data gap between e-commerce and brick-and-mortar. By employing geo-targeted tactics in-store, retailers can make sure that customers are constantly engaged through customized, direct and seamless channels, reaching shoppers in real-time with geo-targeted in-store promotions and the opportunities to  interact with their favorite products. Apple’s iBeacon, for example, tracks foot traffic by communicating with shoppers’ iPhones, and can allow retailers to ping customers with discounts for items that are directly in front of them. The information gathered from iBeacon sensors can also help retailers in tailoring ad campaigns and optimizing store layouts to maximize sales. Such strategies not only boost engagement and interactivity, but also steer shoppers to their point of purchases in a coordinated and helpful fashion.

Which new brick-and-mortar strategies is your brand employing to keep pace with the constantly evolving retail landscape?