Physical Stores: Is There Still A Point?
We've all been warned about the death of Main Street stores for a long time, but most of us never dreamed it would happen on such a scale. From small local brands to huge multi-national companies, stores that were once a regular 'must visit' for shoppers and consumers are seeing footfall dropping month on month. Eventually, they reach a point where keeping the store open is no longer viable, and so the inevitable happens; the shutters come down, and the store is dead.
Once upon a time, we were warned that it was the major brands who would end up being the only players left in the game. The 'mom and pop' stores, without the range of products or the ability to offer discount prices that draws consumers to larger outlets, would be crushed by the competition. City centers across the country were doomed to take on a uniform appearance, with every Main Street in every population center offering the same range of stores. That's not how it's played out. Big brands, like everybody else, are counting the cost of changing shopping habits. They, too, are getting out of the game. Gap, Victoria's Secret, and Charlotte Russe are just some of the big brands who have announced closures on a large scale for 2019.
Everybody’s Gone Online
The closure of the stores doesn’t necessarily mean the death of the companies, though. In a lot of cases, brands are finding that they do sufficient business on the internet to survive. They no longer want or need the expensive overheads of running stores - and paying people to work in them - when they can generate the same levels of business from having customers order directly through the internet, and delivering goods to their homes.
On the one hand, this is simply a symptom of the times we live in. Amazon led the way in showing the rest of the world how online shopping could be handled, and everyone else quickly caught on. Many of the kinds of purchases that used to involve leaving the house are now done more easily online. Blockbuster Video was the highest profile casualty of a world that no longer needed DVDs, because streaming was faster and more efficient. Bricks-and-mortar casinos are facing serious strain from their online equivalents. Mobile casino games - and online casinos in general such as Amigo Slots - are capturing the lion’s share of the gambling market. Why would you go to a bar to play a mobile slots game if you can do it in the comfort of your own home? Why would you go into town to place a bet on a sports event when you can do it through the internet, or even through your phone?
On the other hand, there's still something to be said for being able to touch and see something with your own hands and eyes as opposed to staring at an idealized shot of it through a screen. Most of us will have experienced the inconvenience of ordering clothes online, finding out they don't fit as we expected them to, and having to go through a difficult and time-consuming returns process. Had we just gone into the store to buy them, we could have tried out a variety of options before making a purchase, and got it right first time. There are some industries and trades which still benefit from 'the human touch,' and that's why we think there's still a case for establishing a physical presence on Main Street for emerging brands.
Bucking The Trend
In among all the bad news stories - the regular reports on stores which are withdrawing from the physical realm - we often miss reports of the opposite happening. Some brands have started life online, and then decided to open stores as their business expands. That seems to run contrary to the general pattern we see with store closures, so who are they, and why do they do it?
We credited Amazon with popularizing the trend for online shopping, but based on their recent activity, we may also end up crediting them with the resurrection of traditional shopping methods. Many people were left scratching their heads when they opened their first-ever physical 'Amazon Go' store in January 2018, but the move has been successful. By using technology to make the transaction process smoother for customers (the stores allow shoppers to buy items through an app, without the need to go through a checkout procedure), Amazon offered something new, and people came to check it out. Some reports suggest that the retail giant now plans to open as many as 3,000 of the stores across the United States by the end of 2021. Mon Purse, which was the ultimate in chic online-only fashionable bag and purchase stores, now has a physical presence within Selfridges on London's desirable Oxford Street.
Part of the desire to move back to opening physical stores comes from feedback that brands get from their customers. Although people have shown that they're happy to go along with online shopping, it would seem that not enough of the brands who retreated from the high street bothered to ask them whether they preferred to do business this way. A study conducted in the UK showed that as many as four out of five shoppers preferred to do their shopping in person, and missed the shops they used to visit. In their feedback, they cited the ability to physically assess their potential buys before deciding to purchase as being vital to their satisfaction. The general message that came back was that far from stores being closed because customers didn't want them, stores were being closed because brands had simply made the decision on behalf of their customers.
The Power Of Perception
There's also the question of how the public perceives the strength and size of a brand. There's a certain demographic - especially the over 50s - who don't place as much trust in online brands as they do those they're familiar with from seeing them on their local Main Street. Having a wide physical presence tells shoppers that you're a big deal - you can afford to operate in multiple locations, and you can be trusted because shoppers have a place to visit if they have issues. Online-only brands run the risk of being seen as faceless, and therefore, intangible.
A shopper in a store is also less likely to shop elsewhere. Online trading is often a race to the bottom in terms of price - it takes a matter of seconds for a customer to see how much you're selling an item for, and then check your nearest competitors price with a small number of clicks. In a store, a customer is faced with your price only, and then has to decide whether to go to the checkout, or undertake the footwork of going to another store to see if they can beat your offer.
Making It Personal
Based on all of the above, there are still benefits to establishing a physical presence so long as you're clever about how you do it. The stores which are dying tend to be those who do things the same way they did forty years ago; they offer aisles and rails of goods, and then rely on customers bringing those goods to the till. Embracing technology in the way that Amazon Go stores do is one way of offering something different. Ensuring that there are enough store assistants is another. Having someone offer a personal shopper experience to a customer in the flesh can be the key to having a store that converts interest into sales, and a store which is only used for browsing. Staff on the shop floor can answer questions, make recommendations, and close sales. Until technology progresses a little further, online stores can't do that.
There’s still a case to be made for opening physical stores. It just takes a little more than in the past to make a success out of them.