Where Bricks Beat Clicks

Posted on Posted in retail strategy

Suddenly physical is fashionable. Where not so long ago, pundits were predicting the death of bricks and mortar retail (and some still are), now it’s de rigueur to have a physical retail presence.

Many online retailers are talking about setting up shop. Jeff Bezos, CEO of Amazon, said in a C-Net interview late last year that he would “love to” open retail stores, but only if he can find a uniquely Amazon way of doing it. Earlier this year the Wall Street Journal reported that Google too is working on launching its own shops.

There are numerous other examples. US men’s online apparel store Bonobos (www.bonobos.com) has set up a number of “guideshops” that allow customers to try the gear on, but not take it home then and there. The idea is that you book an appointment in store with a personal guide, who helps you select outfits that work for you. If you’re happy with your choices, you order from the website and Bonobos ships free.

In Australia, we’ve seen customised footwear e-tailer Shoes of Prey launch its first physical store inside David Jones in Sydney. As Shoes of Prey CEO Michael Fox said in Inside Retail, “while the brand has experienced strong growth over the last three years online, two key opportunities identified were allowing customers to see, touch and try on our shoes.” How about that? Brilliant! Suddenly the most innovative thing happening in digital is to allow shoppers to experience the goods physically.

One of the reasons for the sudden interest in bricks and mortar stores by online retailers is increased conversion rates. Way back in 2011, I wrote in Inside Retail that physical stores are far more successful at turning traffic into sales. As I noted then, “depending upon the research source, the conversion rate for bricks and mortar stores is a minimum 20% (much, much higher in the grocery category), while online is a maximum 3-5% (and some quote far lower numbers).”

Sure ‘nuff, shoppers like to get their hands on the merchandise. And they love the social experience of shopping. Customers also crave the immediacy of getting the goods now (that “gotta have it” feeling), rather than waiting for delivery.

That last point is a factor behind the growth of “click and collect” – order online and pick up in store. The practice was huge in the UK last Christmas, which is often considered to be the leading online retail nation on earth.

One case in point stood out for me. As gathered from various media sources, about 25% of UK department store John Lewis’ Christmas sales were online. And around 35% of those sales were click & collect. The trend is growing. A leading UK online commentator told me recently that up to half of many British physical retailers’ digital sales are fulfilled in a physical store.

So everything old is new again. That three-dimensional space filled with warm bodies and real product called a “store” is actually not as antiquated as we once figured. Yes that space might change in form and function, and it will be “amplified” by digital technology (to quote Reid Hoffman, founder of LinkedIn), but as our online friends have found, bricks can beat clicks.


One thought on “Where Bricks Beat Clicks

  1. Bricks and mortar is like rock and roll – it will never die. And a lot of online retailing does feed back into physical stores – e.g. “click and collect” as mentioned in this article, or all those Grabone and similar deals which give you discounts off, say, a restaurant meal.

    It’s a really interesting move for online retailers to open up physical stores, even if they’re really just showrooms aimed at driving sales back to the websites. I’m not sure how happy Westfield would be with the idea, for example, of letting some online retailer set up a temporary kiosk in one of their malls. Especially if it was a retailer with the scale of Amazon, Ebay, etc. And I notice that boohoo.com has been advertising on TV recently – apart from Ferrit, which went under obviously, I can’t really think of any other online-only retailers doing this here.

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