Industry experts have been forecasting the "End of Retail" since the earliest days of online shopping. Within the last two years alone, this demise has been framed as an inevitability as experts highlight shopping mall closures and the failure of legacy retailers.
Despite how certain some seem to feel, however, the reality on the ground looks quite a bit different. Consumers still buy the majority of their goods in store, and some retail outlets are thriving. Retail may be changing, but the end of the brick-and-mortar store is nowhere in sight.
Why brick-and-mortar stores are still relevant
If there is any doubt that shoppers are still able, willing, and even eager to visit stores, the holiday shopping season provides a powerful rebuke. The Commerce Department estimates that in-store sales rose 0.5% in October and another 0.8% in November, while sales in electronics stores alone rose by 2.1%. The growth of the brick-and-mortar retail industry in 2017 was 4.0%, compared to only 0.1% growth in 2016.
Online sales are still surging, but online sellers are also moving into physical stores. When Amazon bought Whole Foods in the summer of 2017, it was not an attempt to sell more groceries online. Rather, it was an admission on the part of the e-commerce giant that physical stores have an important and exciting role to play in the future of sales. Amazon realized that people want to buy peaches in person. The company also realized that having a physical store made last-mile delivery easier for all and facilitated more sales. Just looking at Warby Parker is proof that physical retail locations are important. The retailer started with an online-only strategy and now makes more than half of its revenue from physical locations.
There are also compelling reasons to believe that forecasts for the "End of Retail" are based on bad data and analysis. For instance, big box stores are closing quickly, but this has more to do with the fact that big department stores no longer appeal to consumers wanting unique, focused retail experiences. Some brands, like JCPenney, are also closing huge numbers of stores, but that is because of issues with management, in addition to performance in physical stores.
The truth is that some brands and stores are thriving right now. Dollar General plans to open 900 new stores in 2018, Target plans to open 35 new stores, and T-Mobile opened over 1,000 new stores in 2017. For every article about a store closing its doors, it seems there is another about a brick-and-mortar triumph.
Why retail is fundamentally different
The "End of Retail" is better understood as the evolution of retail. As much as consumers still like shopping in-store, their expectations for the experience are fundamentally different than they were 20 years ago.
Consumers who are used to the convenience and customization of online shopping increasingly expect physical retailers to make the same accommodations. Technologies like dropship expand the available inventory exponentially, modern cell phone store POS systems like RQ make checkout seamless, and customer data enables personalized messaging. All of these efforts demonstrate to consumers that shopping in-store is as easy and accommodating as any other option.
The other aspect of retail that is now fundamentally different relates to what is unique about physical stores. Occupying a space that is engaging and exciting is an experience that no e-commerce outlet can offer. The quality of the customer experience is a new priority for retailers, which is why technology like augmented reality and tools like iQmetrix’s Endless Aisle are being increasingly integrated into retail. A store has the ability to be a destination in a way that a website never will never have.
Retailers should not conclude that the sky is falling, or that the "End of Retail" is truly here. But they should also not assume that business can remain the same as it always has been. Retail is in a time of flux, and what worked in the past is quickly becoming inadequate and irrelevant. The retailers who will survive into the future are those who have an optimistic outlook and—most importantly—are willing and eager to evolve.
Wireless retailers who want to remain relevant use technology to stay ahead of the curve. Learn about the integrated, omnichannel solutions available from iQmetrix.
Photo Credits: Shutterstock / catastrophe_OL, Shutterstock / J. Louis Bryson, Shutterstock / Hadrian