A recent news about the opening of a second Amazon bookstore has thrown media and major e-tail and retail players into a frenzy of opinions, analysis and market forecasts based on the apparently counterintuitive decision of the eCommerce giant to enter a space it has made a purpose to shadow in the past two decades. At a closer look, however, a brick-and-mortar approach may be exactly what the Internet-based retailer, with a 2015 revenue that’s worth 60% of Romania’s GDP in the same year, needs to keep growing.
It is not the first online business to take the offline, traditional road, but Amazon’s move is today symbolic for a change of retail heart that will most likely be embraced by many in the following years. Meanwhile, brick-and-mortar businesses, some of whom are still trying to enter the online battleground, continue to find ways to grasp its full potential.
In the past few years, traditional retail – swept away by an online counter-offensive – has been considered on its way to extinction, due to a growing possibility of the brick-and-mortar shops being replaced by the more convenient virtual stores. Data supported expert forecasts, showing an increasing number of people choosing to make their shopping online.
However, convenience, loyalty programs, price comparison opportunities or immediately available reviews that online shops provide cannot trump the unique advantage that a physical store can offer: a social experience, which is practically what shopping is all about. It’s a perfect excuse to meet your friends and have a drink after; it’s a great opportunity to feel good about yourself (remember when you bought that slightly expensive, but gotta have jacket?) Most importantly, it provides instant gratification: See. Buy. Enjoy. Thus, retail stores can offer shopping experiences that cannot be replicated online. The result? Even today, the majority of all retail sales happen in physical shops.
In conclusion, online shopping is growing massively, and brick-and mortar stores are not only not on the verge of extinction – they are being embraced by eCommerce icons. Why?
The answer to this question lies in the bottom-up revolution in retail brought by technology and Internet, which reshaped its very core: Consumer Behaviour.
Today there are no longer behaviour patterns that can shape predictable purchase paths. The classic 5-step journey has been enhanced to a more longer, modular version, which makes the transition online/offline possible: we stopped speaking of purchase paths because we discovered the more complex consumer decision journeys – now controlled not by the brand, but by consumers themselves.
With three billion (and counting) Internet users worldwide, the figures of the global eCommerce market will only continue to grow. On the other hand, the brick-and mortar commerce, while facing an entirely different dynamic from anything experienced before, will continue to evolve positively. The best bet for retailers is, then, to combine the two worlds, following their customers in doing so.
First, there was retail. Then came e-tail. Now, according to Nielsen, an omni-channel approach is the new retail reality.
Slowly but surely, physical stores become the competitive advantage of e-stores. And vice versa. – Cristi MIHAI, Managing Partner, STRATEGAD.