From Clicks to Bricks: How Online Retailers Are Making the Move to Physical Stores

Consumers like to touch, feel, try and be able to buy products when they want something. According to A.T. Kearney’s latest report on Omni-channel Retailing, that’s why up to 80 percent of shoppers across different demographics & age groups prefer to shop at brick-and-mortar stores

Given the finding from A.T. Kearney’s survey, it’s no surprise that 90 percent of retail sales in the US are from physical stores and only 5 percent come from purely online stores. The remaining 5 percent of retail sales come from multiple channels. In a separate report, McKinsey & Co. predicted that online sales would only account for 10 percent more of retail sales by 2025. Brick-and-mortar stores will always be at the core of retail.

However, while brick-and-mortar stores will always be at the core of retail, it’s important to keep in mind that many parts of the shopping journey don’t happen in stores.  55 percent of customers have multichannel shopping journeys where they use both stores and online channels. While the in-store experience provides the sensory satisfaction and immediacy, the online experience provides an unparalleled depth of information about brands and products

As the shopping process for consumers starts to combine both online and offline processes it’s critical for retailers to also integrate their digital and in-store resources.  While brick-and-mortar stores like Barnes & Nobles or Best Buy have started to become click-and-mortar, online-only retailers like Warby Parker and Birchbox have gone from clicks to bricks.

This week we’ll take a look at how online retailers are adapting to the reality of their customers preferring physical stores. Next week, we’ll take a look at how brick-and-mortar stores are becoming click-and-mortar. Subscribe to our newsletter to receive an alert when that article is published.

Here are a few ways online retailers are bridging that gap between themselves and their customers.

1. Pop-up shops

Pop-up shops are temporary spaces that are leased out for very short times, sometimes for as little as a day, where retailers can test out a market.

Before large established brick-and-mortar brands were expanding into the online world, creating an online presence was not a significant cost for established brands. On the other hand, establishing a brick-and-mortar presence from just an online presence requires significant investment. Unless, you open a pop-up shop. Leases are short term so brands can move around to find their customers and then become something permanent.

2. Better product demos on screen

In the past, there was no way the internet could replace the experience off going to the store. But now, we have so many different types of mediums to display products – 360 views, gesture controlled images, video reviews, and even virtual try-ons.

Warby Parker is a great example of an online retailer who uses all the mediums mentioned above to showcase their products.

3. Try-at-Home model.

You can shop online, and still get to try things out before you buy them. That’s how many innovative online retailers are providing the sensory experience that customers crave.

Retailers like Warby Parker, StitchFix, BirchBox, Bombfell, and Trunk Club deliver a few of their customers choices and let them choose what they want to buy after they have actually tried them on. This model has been tremendously effective.

4. Delivering Recommendations

It used to be that only store clerks or sales people could learn their customer’s needs and wants, and then offer relevant suggestions. However, with the number of tools available now on the internet it is possible to learn what a customer’s intent is, and how they got to that point. With that information online retailers can now provide the sort of service that only shopkeepers used to provide.

With predictive data science one-on-one marketing is possible. By bringing customer data from multiple channels and applying self-learning, predictive algorithms marketers can now send hyper-personalized messages with the right sized offers to each one of their customers. To learn more about how to calculate the right size offer, and the right message download our Retail Marketing ebook .

This is how online retailers are starting to provide the services that only physical stores could provide. Next week we’ll look at how brick-and-mortar retailers use technology to extend their storefront.

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