I’m sure you have heard it time and time again over the past few years: “Retail is dead!” It seems like every other week there is another former retail giant declaring bankruptcy. The classic example is Sears, but there is a whole laundry list of others who have been closing stores in the wake of this ‘retail apocalypse’ (RadioShack, Toys ‘R Us, J.C. Penney, to name a few). As retail stores are closing and malls becoming ghost-towns, it is easy to blame Amazon for this. After all, if you can buy anything and everything online these days, why would anyone actually go to a mall?
Days before Christmas, I found myself in a mall in my hometown. Wandering around trying to find gifts for my family, I went into a shop that I had never heard of before to check it out. Once I stepped inside, I could tell it was just a temporary pop-up shop. There were tables set up with different gadgets on them, probably 50 total products in the entire space. One of each, no extra stock. I asked one of the employees what this was all about and he explained that the store was basically a showroom for products that had successfully launched on crowdfunding sites like GoFundMe. This concept was really cool to me, as I have always browsed the products on these crowdfunding websites, but had never actually bought one. After spending some time in the store but not finding anything that my family members would want, I walked out. I took the escalator upstairs and walked curiously into a store called Peloton with just a few workout machines in it. Later, I purchased a few shirts at UNTUCKit, tried on some pants in Bonobos, browsed glasses at Warby Parker, and that is when it hit me: retail isn’t dead, it’s just changing.
Each of these stores had started online and eventually expanded into the brick-and-mortar retail space years later. Not only do these storefronts allow brands to create a more personal shopping experience for the customer, but can serve as an introduction point to someone who isn’t as internet savvy. In addition, physical locations allow customers to actually touch, try on, and inspect the products before clicking the ‘buy’ button. All of this adds up to a potentially profitable sales channel for online retailers.
Traditional shopping malls may be a thing of the past, but the idea that physical stores will disappear altogether is a stretch. Recently, Amazon has made significant moves into the brick-and-mortar space with the purchase of WholeFoods and the opening of the first Amazon Go store in Seattle. These two events did not go unnoticed, and at the time demanded nearly wall-to-wall media coverage. Why would this e-commerce giant move into the exact retail space it was crushing for years? The answer: it isn’t. Amazon and other ‘e-commerce first’ companies are not buying up 100,000 square foot warehouse-like storefronts in a bid to recreate the retail models of the 20th Century. Their shelves aren’t chalk full of product, and they aren’t offering deep discounts. Instead, they are essentially bringing their online stores to life.
A unique culture and design that you identify with? Check. Informative customer service that isn’t overbearing? Check. Easy to browse offerings? Check. A quick and easy checkout process? Check. These are all features of e-commerce that attract customers, and these are the same features that are at the forefront when these e-commerce brands move into brick-and-mortar storefronts. Successfully bringing a great online presence into the real world is tough, but can benefit a brand well beyond profits. By exploiting an omni-channel sales strategy like this, the customer is allowed to immerse themselves in a comprehensive brand experience, which creates meaningful customer relationships and strengthens brand loyalty.
On the flip-side, the largest retailer in the world, Walmart, has been aggressively moving into the e-commerce space. In 2016, Walmart acquired Jet.com for over $3 Billion, the first of many acquisitions of e-commerce powerhouses. Following this billion dollar purchase, Walmart continued to move into e-commerce by adding ModCloth, Bonobos, and Moosejaw to its portfolio. These additions have allowed Walmart to gain expertise from some of the most successful e-commerce companies.
Much like we have seen with the introduction of tech into other industries, success will be found through a balance of technology and humans, in a mutually beneficial relationship. It will be difficult for any company to expand without some sort of physical presence, just as it is unthinkable for a retailer to not have a digital presence in this day and age. I am in no way predicting that the malls of the future will be filled with Amazon, Etsy, Zappos, and Wayfair, but that these stores will begin to pop up, filling empty commercial storefronts and potentially revitalizing traditional retail as we know it.