Haunting images of abandoned shopping malls seem to say something about the unstoppable decline of the analog shopping experience in an increasingly digital and mobile world.
What e-commerce has done to physical shopping in the last decade mirrors what Barnes & Noble and other big-box retailers did to independent stores beginning in the mid-’90s.
Back then, every independent bookseller had the same complaint: people would go to their store to get advice and find the perfect book; then they’d head across the street to Barnes & Noble and buy the book for half the price. How could a small shop survive when it’s just a showroom for a massive competitor?
Of course Amazon has now done the same thing to Barnes & Noble. I feel bad every time I visit my local B&N: it’s big, beautiful, and bustling, with 15 cash registers that are completely empty. The problem is not unique to books: 75% of shoppers use mobile devices while in stores, and they’re not just texting: they’re shopping, researching, and buying online.
In response, businesses are starting to orient themselves around the reality that a store will be less and less of a transactional shopping destination over time. Instead, the store will be the venue for many different activities that will reinforce digital sales (and possibly breathe new life into some of those haunted old malls). Here’s how:
Tesla Motors sells their electric cars direct, without dealers. Instead, they have a network of showrooms around the country where you buy online, through their website. The store is the showroom; once you’ve checked out the car and are ready to buy, it’s an e-commerce transaction.
True, this model has run into regulatory issues, but it points to a future where people want to, and expect to, buy big-ticket purchases online. The store is just where they check it out in person. Everything else is more efficient digitally.
Stores are also becoming communities where people can learn and share their passions. Ideally for brands, this leads to loyalty and ultimately sales.
Williams Sonoma offers cooking classes, Apple has training sessions, iTunes offers sessions featuring famous musicians, and REI has a huge rock-climbing wall. The most successful community builders are the retailers who bring some of the best practices of online content marketing in-store.
eBay Now promises delivery of thousands of goods and services in about an hour. How? They use stores as fulfillment centers.
Order online and their delivery people go to the store, pick the item from the shelf, buy it, and deliver it to you. The store is now just a warehouse of items conveniently located near you.
Think about pizza. Pizza Hut, Domino’s, and Papa John’s all have thousands of locations conveniently located near you. Order online, and one of those “manufacturing” facilities will quickly make you a pizza, just the way you want it, and deliver it to you while it’s still piping hot.
This local, distributed manufacturing model is the future for all sorts of products, especially as robotics gets cheaper and 3-D printing becomes more mainstream. Brands that have manufacturing proximity to customers will have a competitive advantage.
Let’s not forget the great job a well-placed store can do in promoting a brand name. All those cars driving by, seeing your brand name on the front of a store, in neon lights. If you think about the pizza examples, they’re also great examples of stores as billboards. Has anyone ever stepped foot in an actual Domino’s Pizza? But seeing their storefront reminds the world that you can order Domino’s whenever you want.
Does digital mean the end of physical stores as traditional venues for sales? Certainly not. Look no further than Warby Parker, the successful e-commerce-only eyewear company, which is now opening physical stores to boost sales.
But the potential of stores to operate as showrooms, community centers, fulfillment centers, manufacturers, and billboards is strong and will help drive your digital sales.