BrainTrust Query: Is Retail Quietly Trending Away From Bricks and Mortar?

Discussion
Apr 23, 2012
Ken Lonyai

Through a special arrangement, presented here for discussion is a summary of a current article from ScreenPlay InterActive’s blog.

Back in the late ’90s when e-commerce was coming to the fore, a fear pervaded among many retailers that they might be torpedoed by the new phenomenon of online shopping.

Over time, retailers relaxed and joined the fray in developing their own true web presences. They stood up to competition from mom and pops and Amazon and other big discounters, so it seemed that the panic was over and that they didn’t have to worry about closing stores due to internet competition.

Now, retail is at another inflection point. Amazon is head and shoulders above all other internet-only competitors, producing its own line of products and services, buying Kiva Systems, and reportedly on track to have nearly 70 warehouse locations in the near future. In addition, the early volleys of tablet wars have begun with an immediate hammer blow to traditional print publishing/advertising and a new era of rich media enabled "catalog shopping" on the horizon.

Add to that the ceaseless growth of smartphones and a youth culture that has an always-on wireless connectivity psyche embedded deep in its soul and, once again, bricks and mortar retail is under pressure. This time though, there’s more than perception behind the changing merchandising topography. This time, there’s less novelty and more early adoption and perceived demand from consumers that are now comfortable with technology as both a lifestyle and beneficial shopping tool.

There’s no immediate threat, but over time — possibly a fair amount of time — traditional retail shopping will be permanently affected. It may be largely innocuous, like a more intelligent store environment enabled by digital signage, electronic wallets, and retail or brand based apps. Or, it may be the first, real, wholesale change to shopping habits since the emergence of the department store or suburban mall. It’s quite possible that retail stores will more and more become, in effect, catalog showrooms, customer pick-up windows, and return desks — scenarios they cannot financially sustain.

Clearly there’s an experience to in-store shopping that can never be replicated by digital shopping. Retail shops are a destination, an escape, a place to touch and feel, a place to be seen by and interact with others, and they offer an immediacy that even young shoppers enjoy. But it’s quite possible that, in time, store footprints will decrease, thin staffs and self-service becomes rampant, and that a number of retailers that are very sound businesses today, will vanish.

Change doesn’t always come quickly or painlessly, but in our society, it comes.

Discussion Questions: Do you agree that retail is quietly trending away from bricks & mortar? How do you see mobile and technologically enabled shoppers affecting retailers in unexpected ways?

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43 Comments on "BrainTrust Query: Is Retail Quietly Trending Away From Bricks and Mortar?"


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Richard Dodd
Guest
Richard Dodd
8 years 6 months ago
The smart retailers are looking at how their customers want to shop and ensuring that they meet those needs cost effectively. In the UK, in many cases this has resulted in greater investment in online channels and a reduction in store estates, however, still ensuring they have enough stores to give good coverage within a reasonable traveling distance. However, at the the same time, retailers need to look at investing more in the remaining stores to raise the levels of service they provide. The staff in the stores need to be well trained and equipped with the tools to enable them to offer greater levels of service to customers who come into the stores. Pop-up stores will also become a more strategic part of a flexible retailers portfolio rather than a novelty, potentially providing a way of dealing with seasonal peaks when the fixed store estate has been downsized, and meeting the needs of customers in sparsely populated areas. In short, there shouldn’t be a trend away from bricks and mortar, but a re-evaluation of… Read more »
Gene Hoffman
Guest
Gene Hoffman
8 years 6 months ago

Yes, the trending is away from bricks and mortar. People are grabbing at change. Right now, most of us don’t know exactly how technological shoppers will affect retailing in the future. But no trend is finite without alterations and change.

Prediction is hard. But we know that innovation is constant. Looking farther out, by 2100 technology and science will have allowed many of us to still be alive. The sobering news is that you will have many more people on the Earth to serve at retail as well as to care for. The better news is that technology should allow us to better serve what we call retailing today. We will see unbelievable things continuing to occur. And that process is already is progress. So if any of you have a clear crystal ball, please share what you see in it.

David Biernbaum
Guest
8 years 6 months ago

Online shopping has not reached its peak and it will continue to spread out and grow, even beyond where it is today. However, the notion that brick and mortar shopping will trend away to the dark ages is unrealistic and foolish. Smart retailers completely understand that the two need to work dynamically integrated together and they are investing in the right technologies to make it easy for the consumer to shop one and the same.

Adrian Weidmann
Guest
8 years 6 months ago
It is not a question of quietly trending away from bricks & mortar but rather it is imperative for retailers to completely reject their understanding of traditional retail. The question is about designing and implementing an innovative approach to retail in a world of the connected consumer. How do I as a retailer combine the reality of ‘being digital’ and the inherent shopper need to touch and feel as well be surprised and delighted about the shopping experience? The speed at which these changes are occurring are dictating that retailers MUST begin to develop a holistic and cross-channel strategy today! Simply having a website and a mobile application doesn’t cut it. How do these channels work together from a shopper and customer perspective? That is truly what matters. Your customer doesn’t care about who gets credit for a sale — they just expect their purchase to be smooth, efficient and rewarded on THEIR terms. All too often, retailers avoid the difficult decisions because there are too many political layers and agendas in the enterprise environment.… Read more »
Tony Orlando
Guest
8 years 6 months ago

On many products today, online shopping will continue to grow, but food, and other daily need commodities will still be very viable at B & M locations. Buying a nice t-bone or fresh tomatoes is something consumers will do for themselves, but a new LED TV will be purchased more and more online, which does not bode well for the electronic stores in the future.

Shoe stores are also becoming dinosaurs, as Zappos and other online shoe outlets have made major inroads into the shoe business.

My load of mulch will still be delivered from my landscaping guy, and hopefully the main street merchants will reach out to their selling base with creative ways to connect with customers blending high tech with old-fashioned service.

Steve Montgomery
Guest
8 years 6 months ago

Retailing is all about adapting to change. We went from mainstreet to the mall; from small local stores, to mega marts; and now from brick and mortar to internet. Main street and small retailers still exist, but not in the numbers that they once did. Brick and mortar will not go away but its place in retailing will continue to change. I don’t have a crystal ball that says what form it will take, but I do believe it will survive.

Bill Emerson
Guest
Bill Emerson
8 years 6 months ago

“Quietly”?

Retailing is continuing to evolve, as it has through the ages (only 40 years ago, there were more than 130 independent department stores in this country). The difference is that this evolution is happening at a geometric pace, described in Moore’s Law. There is simply no reason to expect that the assault on the old 4-wall model will slow down.

That said, the 4-wall model will always have a place for those who seek immediate gratification, those who enjoy the social and escapist aspects of shopping, and those who want a broader visual experience than the current technology allows.

The answer to surviving/doing well in 4-wall is pretty straightforward. Offer an experience and/or product that is not available through the technology. Says easy, does hard.

Gordon Arnold
Guest
8 years 6 months ago
Internet retail business is trending to capture between 35-50% of all domestic retail sales. The real growth will come from sales into foreign markets wishing to buy American goods in America. This is something the WEB will bring to the world in a big way as software scope and design improve with platform power and performance. These changes are happening as we speak. There is still and will be a necessity for the big-box stores long into the future. What the inventory will be, where the inventory is from, and how the big boxes are managed will also evolve into something unlike what we have today. Unlike the author, I am of the impression that the distribution industry and the transportation industry are under far more pressure to survive than anything we are seeing in retail. Fuel prices and slow sales from a weak world economy are crushing these industries and forcing Fortune 1,000 companies to bring these necessities in house. These same factors combined with less-than-capacity shipments will make shipping charges a pay-by-the-pounds-per-mile formula… Read more »
Gene Detroyer
Guest
8 years 6 months ago

The article suggests that “Retail shops are a destination, an escape, a place to touch and feel, a place to be seen by and interact with others, and they offer an immediacy that even young shoppers enjoy.”

That is exactly on target. And this is what the retailer should be thinking about in terms of looking at the future. Note, the comment did not emphasize buying products at the store.

Make the retail store a showroom that is “a destination, an escape, a place to touch and feel, a place to be seen by and interact with others, and [offers] an immediacy that even young shoppers enjoy.” And give the shopper the tools to close the purchase now, no matter if they walk out with the product or have it sent the next day to their home.

Focus on closing the sale while you have the shopper. Don’t let them go to the next store.

Dr. Emmanuel Probst
Guest
Dr. Emmanuel Probst
8 years 6 months ago

Brick and mortar stores that will survive and prosper are the ones that will offer an experience that is unique and valuable enough for shoppers. Shoppers will, however, shop online for everything that does not require or benefit from a real experience and human interaction.

Ed Dunn
Guest
8 years 6 months ago

Retail is going through a transformation and correction due to information technology and connected consumers. Traditional brick and mortar retailing models are definitely being phased out while pop-up shops, main street boutiques and m-commerce are the new emerging models.

The flash mob from the Target/Missoni campaign, as well as the flash mob regarding the limited release of Air Jordans last holiday season is proof positive that customers are very connected using social networks and will generate foot traffic to retailers if the marketing campaign is aligned to current mobile and social networking technology.

In my opinion, the biggest pain points are where commercial leasing agreements will have to be more liberal and flexible, states are going to have to tax e-commerce operations to level the playing field, and retailers are going to have to incorporate mobile offerings to prevent showrooming. If consumers are showrooming, that indicates consumers are currently using a mobile strategy better than what the retailer is offering.

W. Frank Dell II
Guest
8 years 6 months ago

In the ’90s we had no clear direction as to what product categories consumers would buy online. The consumers were mostly early adopters and 90% would leave the web site during checkout. Today there are more consumers experienced with online purchasing, better web sites, and a recession causing consumers to search for lower prices. Additionally, the average consumer is aging and retired baby boomers have more time to research and search online.

Brick & mortar retailing is not dead. Product categories the consumer wants or needs now like a pain killer will always be purchased in a store. Retailers will compete on unique products and superior customer service. Target market will shift to include the technology challenged segment.

Doug Garnett
Guest
Doug Garnett
8 years 6 months ago

The best projections show online retail volume remaining tiny compared with brick and mortar. So while there’s a bunch of hype on this issue today, it’s not happening in reality … except a lot of consultants are making superb money being paid to tell this to everyone and recommend shuffling the deck chairs as a result.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
8 years 6 months ago

Quietly?!?!?

It is not a question of IF today’s version of physical retailing will be replaced by digital, but rather WHAT and WHEN.

Physical stores are not going away, but our definition and expectation of a “store” and its role in the shopping journey will be radically transformed over the next decade. Although the speed and degree of change will vary across segments, in general, this trend is about as quiet as a sonic boom.

James Tenser
Guest
8 years 6 months ago

Media sage Marshall McLuhan famously observed that newer media displace (not replace) older media.

The same may be said of newer retail techniques — especially online, and now mobile. Digital retailing is an adjunct, an expansion, an added choice that has been layered on to traditional analog retailing. I don’t see it as alternative, but I do see it as transformative.

So I suppose I take issue with the question as posed here. It’s not that retailing is moving away from bricks and mortar; it’s that digital methods are displacing and altering the role of bricks and mortar.

With the exception of purely digital goods (content and software) retailing is about stuff and stuff (so far) is physical and must be made and moved through time and space.

Kevin Clark
Guest
Kevin Clark
8 years 6 months ago

Good comments here. It probably does depend on how you define “retail.” If retail means a twentieth century store, the change will be huge. If instead it is performing those functions we’re familiar with but using whatever tools best fit the job — it doesn’t seem like such a radical change.

It does seem obvious that technology will present a more and more compelling experience every year. The advantages of a physical store will continue to diminish for some time yet.

Andy Casey
Guest
Andy Casey
8 years 6 months ago

No question about the trend as online retail becomes a viable purchase channel for more and more consumers. But seems to me the real question for brick and mortar is, how are they going to change to stay relevant?

Ron Whittington
Guest
Ron Whittington
8 years 6 months ago

Yes, although there will always be a need for consumers to ‘touch and feel’ some items before they purchase — dresses, pants, shoes — any number of things, given the consumer’s personal preference.

It’s very similar to what’s happening to downtown areas with the advent of the internet. At one time, all major companies concentrated in central business districts. Now, with the ability to work online in virtual offices, we’re seeing a slow deterioration in downtown cores throughout the country. While there will always be a place for brick & mortar stores, just as there will always been a downtown core, their dominance is waning.

Liz Crawford
Guest
8 years 6 months ago

The new world order will be morphed and shape-shifted, but still a definite reincarnation of traditional shopping.

Rather than having digital “replace” bricks and mortar stores, I believe we will have new seamless experiences that integrate the two in ways that we have yet to understand. The shopper will be king or queen, and will dictate the type of experience that he or she would like to have. The variety of shopping experiences will multiply profusely. These integrated experiences will be on webTV, with Google Glasses in environments, using scanners on smartphones, and any number of other blended, real-time, real-touch experiential buying opportunities.

It’ll get interesting. Much more interesting than either digital or bricks-n-mortar.