Two Ways Brick-and-Mortar Retailers Have Fought Back against Their Online Competitors
Start a management degree at American Public University.
By George Case
Faculty Member, School of Business, American Public University
Technology has been a great disrupter to many industries, including retail. Although there have been many well-known casualties swept up as consumers turn to online shopping, not all retailers have succumbed.
Many offline retailers are fighting back against online businesses and there’s been some good news recently. This past July, retailers added 66,000 jobs to the economy, according to the National Retail Foundation (NRF). Of these, some 14,000 jobs were for general merchandisers, while clothing and accessories added some 10,000.
Traditional retailers are using two different strategies to address their online competition. One is to provide expert, on-the-spot advice and the other is providing an omnichannel shopping experience for customers.
Customers Appreciate Expert Advice in Retail Stores
Consumers commonly go to a retailer for expert advice. For example, there are some products consumers prefer to see, touch, smell or try on before buying.
Some products also require customer training or education, which necessitates an interaction with a real person, something the Internet is unable to provide. Retail stores need to ensure that sales associates, who have now become the central point in the shopping experience, are well trained.
Many retail stores are following this policy. In a recent report by Applied Predictive Technologies (APT), 70% of respondents have invested in training their employees to be more knowledgeable about their products. In retail stores, customers expect to be dealing with an expert on that product.
Deep product knowledge is not the only area that requires training. Fifty-eight percent of retailers are investing in teaching employees to be more focused on customer service.
Learning how to listen to consumers to understand not just their current needs – but future ones as well – has led Best Buy to launch free in-home consultations. This personalized service invites the Best Buy consultant into the consumer’s home, where they can address a multitude of issues which the consumer may not have considered.
Suddenly, installing a new 55” TV can turn into an additional cross-selling opportunity. It’s not too hard to imagine the new TV leads to a new sound bar, which in turn leads to a TV/Internet/phone provider and a “smart” home.
More Retailers Provide an Omnichannel Shopping Experience for Customers
Retailers are aggressively responding to the need to offer their products or services in the manner preferred by their customers. This means having a viable Internet experience. For instance, 75% of “traditional” retailers have increased their investment in an online presence.
The customer expects the retailer to be as mobile as they are, so only having a physical presence is not an option for most retailers. Retailers have also found that only having a website is not enough, nor is having a single channel of distribution.
Consumers are shopping on their phones, laptop computers, desktop computers and tablets, while they are at home or on the go. Customers now expect multiple services such as in-store pickup, home delivery, overnight shipping or one-time-only delivery.
According to the NRF, omnichannel commerce is one of the 5 top technological investments retailers are making. The customer must be able to effortlessly move between platforms in an effortless manner. Beauty company Sephora takes this a step further, striving to personalize the customer experience across all platforms.
Customers Still Prefer to Pick Up or Return Products at Physical Stores
Brick-and-mortar stores still have one advantage over purely online retailers: when shopping online, consumers prefer to pick up or return a product in a physical store. Research shows that 63.2% of consumers rated this ability as “important” or “very important” when they purchased a product.
This competitive advantage has not gone unnoticed by Internet retailers. The market has seen an influx of Internet-only retailers such as Apple and Warby Parker opening physical stores. Other companies, like Amazon and Whole Foods, have purchased current retailers with a substantial physical presence.
Traditional retailers have made it clear they aren’t going to go away quietly. The astute retailers have implemented these two strategies as part of an overall effort to confront online competition head-on and retain their customers.
About the Author
George Case has spent 20 years in the retail management industry and 12 years as a business owner. Joining a small business in the early 1990s, he was instrumental in the company’s growth and expansion into multiple states. George earned his MBA from Case Western Reserve School of Management in Cleveland, Ohio and his B.A. from Macalester College in St. Paul, Minnesota.