Galvanizing Retail: Digital Strategies Can Save Brick-and-Mortar Stores
March 21, 2018 | Contributed by: Cameron V. Peebles
On Wednesday, March 28, inMarket and the LSA will be hosting a free webinar about using big location data to predict retail closures, trends and opportunities. Register here.
Here’s a not-so-fun fact: 2017 set the all-time record for retail store closures, according to Fung Global Retail & Technology.
Some have been tempted to predict it as a sign of the retail apocalypse. The age that was foretold in the late 90’s when logical thinking was that brick-and-mortar stores would immediately crumble in favor of the soft VGA glow of e-commerce. Now we’re on the horizon of automated, autonomous delivery by land and air, so things must be even more dire, right?
What then, would e-commerce goliath Amazon want with brick and mortar Whole Foods?
Maybe Jeff Bezos loves bulk quinoa. Perhaps he’s willing to take a $13-plus billion dollar gamble to corner the market on free range poultry. We may never be able to see his full thought process, but we do know that he’s not the only e-commerce platform extending into the physical world. Web retail startups like Casper and Warby Parker are expanding from digital into brick and mortar, turning to the real world to grow their businesses to the next level.
There is precedent that retail might weather the current digital storm – for example, the music industry. The first thing that comes to most people’s minds when they think of digital’s impact on the music industry is total and complete devastation. But did you know that recorded music revenue grew by over 5% in 2016, led by a 50% increase in music streaming subscriptions? According to the IFPI, this is the fastest growth they’ve ever recorded. The success of this growth is so pronounced that one of the largest players, Spotify, is planning an IPO in April of 2018.
The music industry survived by embracing digital and streaming, and it saved itself. What if the secret to avoiding complete retail devastation is by embracing the digital strategies that made e-commerce so dominant?
Flipping the E-commerce Advantage
Consumers are always-on in today’s shopping environment. At a whim, consumers can pull out a phone and instantly buy almost anything with the push of a button, or even a verbal cue to one of several digital assistants. All friction has been eliminated. I’m logged in so no password needed; my credit card information is stored so I don’t have to find my wallet; my shipping preferences are saved so I don’t have to type in my address; and I know exactly how much my basket costs. No driving needed and the shipping is free.
These e-commerce advantages might already feel insurmountable to traditional retail — and they become even more significant when you look at the customer relationship. When I log onto an e-commerce site, it knows my preferences and shopping history. It knows I just bought detergent or bulk Pampers. It makes suggestions right up front about what I might need based my individual shopping habits. And when I’m not shopping, big data helps the e-tailer and brands retarget me across multiple devices — driving incremental visits and sales.
What if a retail store knew you, your preferences, your billing info, your purchase history? What if the walls played an active role in recommending products? What if all friction was removed, and the experience could become more pleasurable than going online? Tomorrow’s successful brick-and-mortar retailers are figuring out ways to remove the friction points from the shopping experience the same way that e-commerce has in the web experience — all while adapting the best digital marketing tactics to the real world. They’re creating a convergent model that balances the discovery of offline shopping with frictionless digital experiences and the vital data layer for success.
One of the biggest points of convergence relating to in-store experience is shopper marketing. E-commerce has shown us what we can do with big data from customer shopping habits — and yet, brick and mortar is still slow to adapt. A CMO client once told me that although “no one actually touches the inky circulars stacked by the entrance door,” she was powerless to change her company’s muscle memory tactics.
In e-commerce, advertising products doesn’t end at the walls of the website. What if consumers leaving a store were identified and retargeted with offers and incentives to return, similar to their digital only competitors? The good news is that this isn’t simply possible, but a proven and effective strategy with multiple vendors to select from, including inMarket.
Survival of the Fittest
Despite the store closures, the retail apocalypse is not an end — it’s a beginning. All the evidence points to a galvanization point for retail, a sorting happening between those that are evolving and those that are too slow, too stagnant or simply too averse to change. Retailers need to adapt, and adapt fast — because they’re no longer just racing against their terrestrial, offline-first counterparts in the real world. The e-commerce giants are here, and they’re forcing a cohesive convergence for retail.
We’re just now entering a period of unprecedented opportunity to delight customers as we mold the future of the shopping experience. It’s happening right before our eyes, and it’s an awesome time to be part of the retail ecosystem.