We have one question for those who say retail is inexorably headed toward an exclusively online model – why aren’t more online retailers returning sales like Amazon and eBay?
Because the popular wisdom around the question is just that – popular. It’s not rooted in any critical examination of market realities, or grounded in data. It’s merely a reflexive response to an ongoing reality which has become a retail market fixture.
The truth is that brick and mortar stores are still relevant in 2018 and here’s why.
Change – not extinction.
While it’s undeniable that online retail has had a significant impact on traditional retail, rumors of retail’s imminent death are greatly exaggerated.
You may be thinking that the rash of closures across chains like Macy’s are indicative of progressive decline, but these were part of a reaction to large retailers who refused to change their model in response to a market shift.
Instead of adapting to keep abreast of change, going with the original formula was favored. An over-serviced traditional retail sector didn’t scale back to address online retail. Service levels remained inconsistent, also.
Consumer behavior.
Then there’s the shift in consumer behavior. While most shoppers now combine online shopping with brick and mortar, they still want the shopping experience. In fact, they want experience-based purchases more than ever.
Instead of that pair of high end shoes, today’s shopper will be more likely to throw money at a big, splashy night on the town, or a fine dining experience, but they still want the shopping experience.
Walmart reads the bones.
Getting wise to what millennials want, Walmart has recently purchased online retailer ModCloth. The purchase was facilitated through online entity (also purchased by Walmart) Jet.com. Walmart has adapted to changing market conditions by not only going omnichannel, but by insinuating itself into the online mark.
Walmart has also purchased Shoebuy.com and Moosejaw – two online retailers well-known for their quirky offerings and extensive appeal to the increasingly economically powerful millennial market. In purchasing youthful brands like these, Walmart is buying itself a new generation of customers.
Walmart has read the bones, deciphered them and thrown in its lot with the rising purchasing power of young consumers.
Online goes brick and mortar.
While traditional retail gets it online game together, online retailers are reverting to the brick and mortar model. In fact, that’s part of where ModCloth was at, when purchased by Walmart. Amazon has been making sorties into traditional retail since 2011 and continues to put its toe in the water to increase its retail footprint.
As the retail landscape settles, those who adapt and change will be the forces to be reckoned with. It’s now clear that the way forward (regardless of whether you sell online or in a brick and mortar) is to choose both sides.
As the efforts shown above demonstrate, the lines are rapidly blurring, as retailers from both sectors stake their claim to market share in their parallel environments.
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