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If Physical Retail Stores Want to Stick Around, They’ll Still Have to Go Digital

By Michael Schnapf

It’s no secret that the foundation has been crumbling out from beneath traditional retailers. According to statistics published by Coresight Research, a whopping 5,864 stores shuttered their doors in 2018; by spring of 2019, number of closures for 2019 had already exceeded the total number of store closings of the preceding year.

Even the giants haven’t been spared; traffic at once-bustling department stores has all but evaporated, and Toys “R” Us and Payless ShoeSource have both closed entirely. Kmart and Sears have given up on hundreds of locations. The barrage of closings has hollowed out shopping centers, leaving them shadows of their former lively selves. Ghost malls—centers with 50% or less occupancy—are becoming more common.

Dan Bell, a filmmaker who has made a name for himself documenting the proliferation of such spaces, reports that in some cases, malls have become near-wild abandoned spaces. “[Frogs] were actually living in the pool underneath the elevator, the center court elevator,” he shared with Business Insider of a mall in Ohio. “The water had pooled up in the well of the elevator, and there were frogs living in the pool, and … there was a bank of fog in the food court just hanging mid-air.”

Future of brick-and-mortar?

No retailer wants to imagine that their prized store is going to be given up as a home for frogs someday. And yet, the decline of traditional brick-and-mortar sales is as well-established as the cause of its fall: online shopping. Online commerce is just too convenient to pass up.

Rather than spending an hour or more driving and walking around a shopping center, a consumer can click through a purchase in the space of seconds from the comfort of their couch. With same- or two-day shipping, shopping online doesn’t require buyers to sacrifice much immediate satisfaction, either.

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Now, this isn’t to say that brick and mortar shopping is outmoded quite yet — but e-commerce is certainly on-track to outpace it. Figures circulated by the U.S. Department of Commerce reveal e-commerce sales saw a 16.9% increase from the third quarter of 2018 to the same period in 2019, and accounted for 11.2% of total sales. Brick-and-mortar sales, in contrast, rose just 2.9% in 2019 from the previous year. The shift away from traditional retail further appears to be proceeding along generational lines: according to Statista, 67% of millennials, 56% of Gen Xers, 41% of baby boomers, and only 28% of seniors prefer online shopping to making purchases in-store.

And yet, hope isn’t out of reach for brick-and-mortar stores. If traditional retail stores can manage to hybridize into digital offerings, bolster convenience, and once again spark consumer interest in the shopping experience, they may be able to weather the closings storm.

Here are some tactics they may take:

Embrace online shopping

The most successful surviving retailers meld online and offline shopping. Retail giant Target, for example, has been notably exempt from the closing epidemic in part because it has successfully built an online ecosystem. Smaller businesses should follow its example and create a presence in the digital market as well—even if they don’t have Target’s admittedly enormous budget to do so.

Today’s SMBs have access to on-demand services that make it remarkably easy to build a mobile market stall. Merchants can choose to combine platform offerings from services such as Shopify, Squarespace, and Vend to create a point-of-sale system that matches or even exceeds the capabilities of a large-scale retailer like Target.

SMBs now have the ability to market their goods internationally via far-reaching platforms such as Amazon Marketplace. As ironic as it may seem, traditional retailers’ best weapons against the encroachment of digital platforms may just be to go digital themselves.

However, a digital stall alone won’t be enough to save brick-and-mortar stores. To stay afloat, traditional retailers will need to revitalize the shopping experience to convince shoppers to spend their time—and money—at physical stores.

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Use AR to cast shopping as an experience, not a chore

The ability of AR (augmented reality) to provide entertainment and novel experiences empowers retailers to recast going to a brick-and-mortar store from a frustrating inconvenience into a diversion during a shopper’s day.

Consider teen surf and sports retailer Tilly’s work with AR as an example. In 2018, the retailer attracted headlines—and foot traffic—by offering an AR-powered back-to-school “experience” for its shoppers. Using the store’s app, customers embarked on a scavenger hunt through the store, encouraged by the virtual avatar of popular social media personality Shaun McBride (a.k.a. Shonduras). When shoppers managed to find all three prize “coins” hidden throughout the store, they received a 20% discount coupon. As unconventional as it might seem, Tilly’s strategy bore returns: the retailer’s in-store foot traffic saw an increase of 30% after it implemented its AR offerings.

Shoppers see traditional in-person shopping as a chore. However, if retailers can recast the experience of visiting a brick-and-mortar store as an engaging activity, they may be able to revitalize in-store traffic and bolster consumer interest in in-store shopping.

Use cutting-edge technology to improve convenience

Visiting a brick-and-mortar store doesn’t have to be time-consuming or inconvenient. With modern innovative offerings, consumers can enjoy a host of convenience-forward offerings, including cashier-less shopping and reduced checkout times.

Some retailers are already applying tech-forward strategies to increase consumer convenience. The grocery app Swiftly, for example, empowers customers to scan items as they go, and then use a dedicated Swiftly lane to bypass in-store lines and make checkout a process of moments. With the app, consumers can quite literally sidestep the wait. The convenience and speed that apps like Swiftly offer can help brick-and-mortar stores gain a competitive edge over online merchants, and reorient traditional merchants as the most convenient shopping option.

The foundation is crumbling out from beneath traditional retailers—it’s true, but with innovative technology and digital-forward growth strategies, brick-and-mortar stores may just be able to hold steady through the online shopping revolution.

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About the Author

Post by: Michael Schnapf

Michael Schnapf is the CEO of MoreCommerce, a wholly-owned subsidiary of Alibaba Group. He has worked in the e-commerce space for over 20 years and has been a part of three multi-billion-dollar e-commerce focused businesses, with leadership roles at Digital River, GSI Commerce, eBay, and OpenSky. Michael’s primary focus with MoreCommerce is to provide SMBs the opportunity to grow their online sales by providing services and solutions to promote online sales growth. MoreCommerce offers B2B platforms, distribution partnerships, data-centric marketplaces, world-class marketing services, and powerful technology to help SMBs expand their online footprint and make the most out of their endeavors.

Company: MoreCommerce
Website: www.michaelschnapf.com
Connect with me on Twitter and LinkedIn.

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