E-Commerce’s Brick-and-Mortar Revolution

Katie Kochelek September 18, 2018 Original post on Frank Mayer and Associates, Inc. website

Let’s chat about Amazon for a minute. (Apparently, I’m hardly a pioneer when it comes to conversation topics since Amazon is one of the most widely-talked about companies, but humor me for a second).

No other business comes close to being recognized as the face of e-commerce. In fact, I challenge you to find editorial on retail where the Internet giant isn’t mentioned as a major disruptor to brick-and-mortar stores.

Which is why currently it’s surprising to see more articles reporting on Amazon’s latest moves into this very sector. Is the e-commerce king really expanding (or would it be downsizing?) into four brick walls?

It appears so.

Here’s the latest evidence. We now have Amazon-owned Whole Foods representing the physical grocery market. Add to that partnerships with traditional retailers like Kohl’s and Sears to provide convenient return centers and tire installation locations. Don’t forget Amazon lockers at your local 7-Elevens, and of course we can’t overlook Amazon’s own Amazon Go convenience stores, with two already open in Seattle, and many more rumored to hit major cities across the nation.

Hasn’t Amazon picked up a newspaper? Isn’t retail dead?

Not in the slightest, and Amazon is a good example of why. (And let’s remember they know a thing or two about being successful and all.)

When you look at the list of their latest projects above, it’s evident Amazon isn’t entering the brick-and-mortar space to put its more than 12 million products on shelves. They’re seeing opportunities to provide frictionless physical shopping experiences to the same customers who turn to them when they’re looking for frictionless online shopping experiences. Omnichannel jackpot!

But investing across different channels is to be expected of a conglomerate like Amazon, right? Well yes, but if you’ve had your ear to the ground lately, you might have also noticed that many successful e-commerce sites in various verticals have been entering the world of brick-and-mortar, too.

Examples include eyebobs, an eyewear brand that features bold designs, Wayfair, a home furnishings and décor e-retailer, and online mattress retailer Casper. Even digitally-native athleisure wear company Fabletics is being aggressive with a plan to open 75 stores in the near future.

Why are so many online brands developing a physical presence?

“Digitally native pure-play e-commerce brands are finding it strategically essential to open brick-and-mortar locations if they are looking to scale, because customer acquisition and retention is such a difficult task,” says Alison Embrey Medina, Editor in Chief and Associate Publisher of design:retail. “And the brands that are opening stores are finding that their customers who shop across their channels —online, mobile, AND in their stores – are three times as valuable as the online-only shopper.”

Expansion into these physical locations is helping brands to target not only their existing digital customers but also a new demographic to them – the shopper who wants to experience the products and take advantage of the customer service unique to brick-and-mortars.

Ultimately, no matter how frictionless e-commerce can make our lives, nothing can replace the ability to try on a pair of glasses to ensure they complement our face shape or truly experience what a mattress brand means when describing its product as firm or soft.

That being said, these retail spaces will hardly mimic the traditional store format that has suffered under the convenience of e-commerce. Whether it’s providing exceptional customer service, offering ways to test out products, or appealing to the next generations’ comfort with sharing unique experiences on social media, brands are being mindful to implement experiential retail components into their brick-and-mortar game plan – a growing trend that is serving other big-name retailers well as customer expectations shift. So essentially, don’t expect the outdated store model you’re accustomed to.

The days of customers driving to their local home furnishings store or grabbing the new style of high-rise jeans to try on in the dressing room are certainly not dwindling. By putting a twist on the brick-and-mortar experience, e-commerce sites, of all places, are proving there’s still a demand.

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