Big brands aren't immune to the rising force of ecommerce—even established companies like Radio Shack, Sears and Target are feeling the crunch and closing their physical doors.
\r\nAccording to recent reports, the growth of the number of store counts has declined by less than three percent. Not much as for now, but you definitely cannot disagree with the fact that the old traditional shopping model no longer reigns.
\r\nForrester Research estimates that online sales will rise by 9.1% by 2019, compared to 6.1% sales in the 2014. This shows a growth rate of approximately around three percent—a clear sign of proof of the e-commerce expansion.
\r\nFactors like distance from home or ease of click and buy options determine the real cause behind influencing a buyer's decision to prefer online shopping. However upon asking someone more specialized, you might discover the existence of other additional factors that play a major role behind this change.
\r\nSylvia Tolbert, an assistant professor at the John Hopkins Carey Business School, specializes in marketing trends, brand management and consumer research and shares her insight below.
\r\nRelated Article: 6 Tools to Help You Better Understand Your Ecommerce Customers
\r\nAccording to Tolbert, successful online stores provide customers with a price comparison platform. This leaves no doubt for one to digest the fact reported by Forbes, that in the last six months, approximately 50% of the Americans have prioritized their needs more than wants, and 42% now make a more practical purchase while 36% have become budget conscious.
\r\nEasy access to the Web, especially on mobile devices, has led shoppers to do price comparison research before they head to a retail store to check out a particular product. However, many still prefer to purchase it online.
\r\nSylvia Tolbert points this out as the reason behind the eroding profit earning possibility of the traditional brick and mortar stores. This makes it hard for the physical stores to compete with ecommerce in the retail market when customers compare prices.
\r\nApart from this, what are the other factors affecting the business of a traditional brick and mortar storefront?
\r\nYou can find a product faster online. Even if you can't determine the exact product name and brand of what you're looking for, there are typically related products served via the online store. This makes some online purchases cost effective and comparatively easier than traditional purchases.
\r\nNo wonder Facebook, Twitter and most recently, Pinterest, decided to integrate \"purchase\" or 'buy now' buttons into their platforms. Online shopping gets your business in front of more of your target audience.
\r\nNow, consider Pinterest. You search for ideas based on the term \"birthday\" and thousands of pins pop up. A lot of these socially shared pictures link back to the retail store online. Users who have shared one of these Pinterest pictures in the first place might likely convert into possible prospects in the future ahead.
\r\nOne of the main reasons a shopper might prefer to visit a store in person is the customer service. Hence why many e-retailers have tapped live chats for their online stores, where representatives are online to interact with customers to answer their questions about a particular product or other concerns. Similarly, sites are creating FAQ pages for customers to easily access to get their general questions answered.
\r\nRelated Article: Tips to Improve Customer Service on Your E-commerce Site
\r\nSome experts have differing opinions. David Wenigh, the President of eBay Marketplaces, describes the idea of the demise of physical stores as exaggerated and explains that both e-commerce and traditional commerce will merge seamlessly to present an omnichannel platform in the coming years.
\r\nTolbert believes that the future of retail will displace traditional shopping. Even se, she foresees that soon, online shoppers will have to pay additional sales tax for every purchase made and that this will level down the tough competition between the traditional and the online retailers. She shared that in five states, e-commerce sales have dropped approximately five to 11 percent after the introduction of sales tax for every online purchase. Nevertheless, e-commerce seems to win out at the end with too many advantages that make it impossible to ignore.
\r\nMobile and social e-commerce coupled with compatible customer experience have created a need amongst traditional retailers to think of innovative ways to survive this sudden crisis. Opening an e-store to compliment your brick and mortar brings you to the first step to building a proper marketing strategy platform.
\r\nSome retailers have reinvented to create a 360-degree shopping experience to prevent from becoming a complete no sale zone.
\r\nBrands now need to focus on turning their physical retail store into a place for more interaction and engagement. To quote Paul Roth, President of AT&T's retail sales, “The future of retail is all about personalized service and education.”
\r\nWhile some online retail tycoons like Amazon, Ebay and Etsy have tried their hands at opening physical stores, other e-retailers have gone the pop-up route to broadcast the latest stock arrivals.
\r\nTake a look at Google Winter Wonderlab, an event based pop-up store that sets up in different locations on a rotational basis to showcase its latest gadgets. A great concept, the store can continue to maintain a fresh look no matter where or when it appears.
\r\nBusiness goals now need to focus more on brand loyalty than anything else. Retailers need to immerse their customers completely into the brand, in order to make their interaction more engaging. The concept follows the strategy of e-commerce web design; to keep every element engaging for users throughout one's site.
\r\nBrands like Adidas Runbase have ventured out with this strategy by opening a store with a completely new concept. Runners or sports enthusiasts can drop in to take a shower or rent a locker at the Tokyo based Adidas Runbase store after a good workout or run.
\r\nIn the e-commerce world, a good SEO strategy not only helps your business to rise on the SERP but also makes it engaging and educational. Your focus therefore, is to make it educational and engaging enough to interest customers. Now bring it to the real world.
\r\nStores need to provide something more that will make shopping experience fun and educational. People need a reason as to why they should visit a store in the first place, instead of directly purchasing it online. For this, stores need to come up with a different customer approach. The AT&T retail store stands as a perfect example.
\r\nBased on the concept of \"exploration, education and interactivity,\" AT&T stores have circular shaped learning tables set up in their showrooms. Customers visiting the shop to purchase a technology gadget (an iPhone for example), can sit down at these circular tables to learn more about the features and function of the new iPhone. They can also seek the help of the staff authorities in case they need any help with their new gadget.
\r\nMany stores now try to give their physical stores a more personalized look by merging digitalized and physical commerce, and Hointer seems to have revolutionized this entire concept. Smart and digitized, this Seattle based apparel store banks on the old 'men don't like to shop' theory. The store relies on robots and mobile apps to attend customers. Customers can get to shop from their iPhone and Android app and get it delivered within seconds to their trial room. Right from delivering apparels to trial rooms up to making payment transactions, Hointer presents its shoppers with a different shopping experience through its innovative store format.
\r\nThe message stands clear by now I hope. Your common brick and mortar shop would lose the race unless you can integrate it with a digitalized strategy , creative enough to set its own pace in the challenge ahead.
\n","docType":"article","guid":"articles_00355a6630c58be3d2ee388a4e5e7226","lastModified":"2015-06-03T22:00:00.000Z","published":"2015-06-03T22:00:00.000Z","structuredData":null,"subtitle":null,"template":"legacy","title":"From Mall Madness to Sadness: Why Shopping Centers Will Soon Be Obsolete","type":"article","author":{"avatar":null,"bio":"Sudeep Banerjee is the Founder and President of B3NET Inc., one of the leading Orange County Web Design & Development Company in California, now serving clients nationwide. He brings to work over 26 years of expertise and quality in the various dimensions of Website design, Internet marketing trends and specializes to provide agile mobile apps development strategy. Over the years, he has helped more than 200 clients, which include small startups and large Fortune 500 companies.","name":"Sudeep Banerjee","image":null,"slug":null,"social":{"facebook":"https://www.facebook.com/sudeep.banerjee.b3net","linkedin":"https://www.linkedin.com/pub/sudeep-banerjee/6/87a/924","twitter":"sudeep_banerjee","website":"https://www.b3net.com"},"status":"disabled","title":null,"type":"Old BDC Member","user":{"imagePath":"https://staging.business.com/images/undefined","profile":{"company":"","jobTitle":"Senior Consultant","website":""}}},"breadcrumbs":null,"channels":{"primary":{"name":"Business Basics","slug":"business-basics"},"sub":{"name":"Entrepreneurship","slug":"entrepreneurship"}},"meta":{"robots":"index, follow","description":"Retail shops need to act fast. Ecommerce is on the rise, while brick-and-mortar shops around the country are closing their doors.","title":"Shopping Centers Will Soon Be Obsolete - business.com"},"parsedContent":{"toc":[],"json":[{"component":"p","children":["Big brands aren't immune to the rising force of ecommerce—even established companies like ",{"component":"a","props":{"href":"http://retailindustry.about.com/od/USRetailStoreClosingInfoFAQs/fl/All-2015-Store-Closings-Stores-Closed-by-US-Retail-Industry-Chains_2.htm","target":"_blank","rel":"nofollow"},"children":["Radio Shack, Sears and Target"]}," are feeling the crunch and closing their physical doors. "]},{"component":"p","children":["According to recent reports, the growth of the number of store counts has declined by less than three percent. Not much as for now, but you definitely cannot disagree with the fact that the old traditional shopping model no longer reigns. "]},{"component":"p","children":["Forrester Research ",{"component":"a","props":{"href":"https://www.forrester.com/Online+Retail+Sales+To+Top+480+Billion+By+2019/-/E-PRE7825","target":"_blank","rel":"nofollow"},"children":["estimates that online sales"]}," will rise by 9.1% by 2019, compared to 6.1% sales in the 2014. This shows a growth rate of approximately around three percent—a clear sign of proof of the e-commerce expansion."]},{"component":"p","children":["Factors like distance from home or ease of click and buy options determine the real cause behind influencing a buyer's decision to prefer online shopping. However upon asking someone more specialized, you might discover the existence of other additional factors that play a major role behind this change. "]},{"component":"p","children":["Sylvia Tolbert, an assistant professor at the John Hopkins Carey Business School, specializes in marketing trends, brand management and consumer research and shares her insight below."]},{"component":"p","children":[{"component":"em","children":["Related Article:"]}," ",{"component":"Link","props":{"href":"http://www.business.com/ecommerce/leverage-these-6-tools-to-understand-your-ecommerce-users-better/"},"children":["6 Tools to Help You Better Understand Your Ecommerce Customers"]}]},{"component":"h3","children":[{"component":"em","children":["Price Comparison Tops The List Of Factors Killing Traditional Commerce "]}]},{"component":"p","children":["According to Tolbert, successful online stores provide customers with a price comparison platform. This leaves no doubt for one to digest the fact reported by Forbes, that in the last six months, approximately 50% of the Americans have prioritized their needs more than wants, and ",{"component":"a","props":{"href":"http://www.forbes.com/sites/prospernow/2014/02/03/year-of-reckoning-for-brick-and-mortar-retailers/","target":"_blank","rel":"nofollow"},"children":["42% now make a more practical purchase"]}," while 36% have become budget conscious."]},{"component":"p","children":["Easy access to the Web, especially on mobile devices, has led shoppers to do price comparison research before they head to a retail store to check out a particular product. However, many still prefer to purchase it online."]},{"component":"p","children":["Sylvia Tolbert points this out as the reason behind the eroding profit earning possibility of the traditional brick and mortar stores. This makes it hard for the physical stores to compete with ecommerce in the retail market when customers compare prices. "]},{"component":"p","children":["Apart from this, what are the other factors affecting the business of a traditional brick and mortar storefront?"]},{"component":"h4","children":[{"component":"em","children":["1. Online Purchases Are Easier "]}]},{"component":"p","children":["You can find a product faster online. Even if you can't determine the exact product name and brand of what you're looking for, there are typically related products served via the online store. This makes some online purchases cost effective and comparatively easier than traditional purchases. "]},{"component":"h4","children":[{"component":"em","children":["2. Online Shopping Is More Social"]}]},{"component":"p","children":["No wonder Facebook, Twitter and most recently, Pinterest, decided to integrate \"purchase\" or 'buy now' buttons into their platforms. Online shopping gets your business in front of more of your target audience. "]},{"component":"p","children":["Now, consider Pinterest. You search for ideas based on the term \"birthday\" and thousands of pins pop up. A lot of these socially shared pictures link back to the retail store online. Users who have shared one of these Pinterest pictures in the first place might likely convert into possible prospects in the future ahead. "]},{"component":"h4","children":[{"component":"em","children":["3. Online Stores Provide A Better Customer Service"]}]},{"component":"p","children":["One of the main reasons a shopper might prefer to visit a store in person is the customer service. Hence why many e-retailers have tapped live chats for their online stores, where representatives are online to interact with customers to answer their questions about a particular product or other concerns. Similarly, sites are creating FAQ pages for customers to easily access to get their general questions answered."]},{"component":"p","children":[{"component":"em","children":["Related Article:"]}," ",{"component":"Link","props":{"href":"http://www.business.com/ecommerce/tips-to-improve-customer-service-on-your-e-commerce-site/"},"children":["Tips to Improve Customer Service on Your E-commerce Site"]}]},{"component":"h3","children":[{"component":"em","children":["Who's the Expert?"]}]},{"component":"p","children":["Some experts have differing opinions. David Wenigh, the President of eBay Marketplaces, describes the idea of the demise of physical stores as exaggerated and explains that both e-commerce and traditional commerce will merge seamlessly to present an omnichannel platform in the coming years. "]},{"component":"p","children":["Tolbert believes that the future of retail will displace traditional shopping. Even se, she foresees that soon, online shoppers will have to pay additional sales tax for every purchase made and that this will level down the tough competition between the traditional and the online retailers. She shared that in five states, e-commerce sales have dropped approximately five to 11 percent after the introduction of sales tax for every online purchase. Nevertheless, e-commerce seems to win out at the end with too many advantages that make it impossible to ignore."]},{"component":"p","children":["Mobile and social e-commerce coupled with compatible customer experience have created a need amongst traditional retailers to think of innovative ways to survive this sudden crisis. Opening an e-store to compliment your brick and mortar brings you to the first step to building a proper marketing strategy platform."]},{"component":"h3","children":[{"component":"em","children":["Reinventing the Shopping Experience"]}]},{"component":"p","children":["Some retailers have reinvented to create a 360-degree shopping experience to prevent from becoming a complete no sale zone. "]},{"component":"p","children":["Brands now need to focus on turning their physical retail store into a place for more interaction and engagement. To quote Paul Roth, President of AT&T's retail sales, “The future of retail is all about personalized service and education.” "]},{"component":"h3","children":[{"component":"em","children":["A Good Marriage: Ecommerce Trends in Brick & Mortar Locations"]}]},{"component":"h4","children":[{"component":"em","children":["Google's Winter Wonderlabs - For Introducing A New In-Store Experience "]}]},{"component":"p","children":["While some online retail tycoons like Amazon, Ebay and Etsy have tried their hands at opening physical stores, other e-retailers have gone the pop-up route to broadcast the latest stock arrivals."]},{"component":"p","children":["Take a look at ",{"component":"a","props":{"href":"http://winterwonderlab.withgoogle.com/","target":"_blank","rel":"nofollow"},"children":["Google Winter Wonderlab"]},", an event based pop-up store that sets up in different locations on a rotational basis to showcase its latest gadgets. A great concept, the store can continue to maintain a fresh look no matter where or when it appears. "]},{"component":"h4","children":[{"component":"em","children":["Adidas Runbase Store In Tokyo - Converting People Into Brand Loyals"]}]},{"component":"p","children":["Business goals now need to focus more on brand loyalty than anything else. Retailers need to immerse their customers completely into the brand, in order to make their interaction more engaging. The concept follows the strategy of e-commerce web design; to keep every element engaging for users throughout one's site."]},{"component":"p","children":["Brands like ",{"component":"a","props":{"href":"http://running.competitor.com/2015/04/video/video-first-look-inside-the-adidas-runbase-grand-opening_126470","target":"_blank","rel":"nofollow"},"children":["Adidas Runbase"]}," have ventured out with this strategy by opening a store with a completely new concept. Runners or sports enthusiasts can drop in to take a shower or rent a locker at the Tokyo based Adidas Runbase store after a good workout or run."]},{"component":"h4","children":[{"component":"em","children":["AT&T - Making It Educational and Interactive"]}]},{"component":"p","children":["In the e-commerce world, a good SEO strategy not only helps your business to rise on the SERP but also makes it engaging and educational. Your focus therefore, is to make it educational and engaging enough to interest customers. Now bring it to the real world. "]},{"component":"p","children":["Stores need to provide something more that will make shopping experience fun and educational. People need a reason as to why they should visit a store in the first place, instead of directly purchasing it online. For this, stores need to come up with a different customer approach. The AT&T retail store stands as a perfect example."]},{"component":"p","children":["Based on the concept of \"exploration, education and interactivity,\" AT&T stores have circular shaped learning tables set up in their showrooms. Customers visiting the shop to purchase a technology gadget (an iPhone for example), can sit down at these circular tables to learn more about the features and function of the new iPhone. They can also seek the help of the staff authorities in case they need any help with their new gadget. "]},{"component":"h4","children":[{"component":"em","children":["Hointer - Introducing A More Gadget Personalized Showroom "]}]},{"component":"p","children":["Many stores now try to give their physical stores a more personalized look by merging digitalized and physical commerce, and Hointer seems to have revolutionized this entire concept. Smart and digitized, this Seattle based apparel store banks on the old 'men don't like to shop' theory. The store relies on robots and mobile apps to attend customers. Customers can get to shop from their iPhone and Android app and get it delivered within seconds to their trial room. Right from delivering apparels to trial rooms up to making payment transactions, Hointer presents its shoppers with a different shopping experience through its innovative store format."]},{"component":"p","children":["The message stands clear by now I hope. Your common brick and mortar shop would lose the race unless you can integrate it with a digitalized strategy , creative enough to set its own pace in the challenge ahead."]}]},"resource":null,"sponsorship":null,"thumbnail":{"path":null,"caption":"NanoStockk / Getty Images","isBlurred":true},"bestPicks":null},"related":{"relatedArticles":[{"title":"From Mall Madness to Sadness: Why Shopping Centers Will Soon Be Obsolete","canonical":"https://www.business.com/articles/why-shopping-centers-will-soon-be-obsolete/","slug":"why-shopping-centers-will-soon-be-obsolete","thumbnail":"https://www.business.com/images/channel/business-basics.jpg","dek":"Retail shops need to act fast. 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