Ecommerce: The challenges of moving into bricks-and-mortar retailingby
Further to recent news that Amazon is reportedly gearing up to trial its first bricks-and-mortar store in New York, do ‘new to the High Street’ brands like Amazon have what it takes to compete with more experienced bricks-and-mortar retailers?
Whilst online retailing brings with it substantial logistical challenges, once these are mastered, it is a relatively straightforward process in terms of maintaining service levels and customer satisfaction. Brands such as Amazon can certainly wear their online retailing badge proudly, as they continue to lead the way in terms of both attracting and retaining customers across the globe.
That said, transferring that success to the high street is going to be easier said than done. The High Street has become a much tougher trading ground than ever before, as customers not only demand the ‘touch and feel’ experiences so traditionally associated with High Street retailing, but now also crave the immediacy that has been brought about by the boom in ecommerce. Whilst it remains to be seen if Amazon do indeed venture onto the High Street, the very idea of it is worth considering in more detail, as it presents similar challenges for any retailer who is planning a move into bricks-and-mortar for the first time.
These days, many new to market retailers start out life as online outfits and with the power of social media, Facebook fan pages and a potentially global customer following at your fingertips, it can be easy to see why. For many, the natural progression for a successful online store still seems to be the opening of a ‘flagship’ High Street location, almost as if it the final mark that the brand has ‘made it’. So whilst this discussion takes its inspiration from Amazon, it is in fact relevant to any retailer who is considering opening a High Street store.
Why bricks and mortar?
The first fundamental question to tackle is why a retailer wants a bricks-and-mortar store in the first place. Is it to serve a practical sales purpose (such as does the retailer have products that ‘need’ to be touched and felt before purchase) or is it more about brand building, experiential retailing (so creating an atmosphere and an experience that will cement the brand in the minds of its core audience).
To explore this point further, a report by Accenture just prior to Christmas 2013 revealed that 65% of online shoppers planned to browse online before venturing instore to complete their purchase. Reasons for this behavior included avoiding shipping costs and being able to touch and feel the product before purchase. So with this in mind, is the bricks-and-mortar store simply a glorified ‘Click and Collect’ destination where customers who have already decided to buy go on to complete their purchase, collect the goods in person and save on postage costs?
In the majority of cases, retailers will probably be looking for a bit of both, but it is worth exploring this point in some detail before taking too many steps towards the store opening.
The need for technology
Any retailer who has set their roots in technology and ecommerce will need to consider their technology offering within a bricks-and-mortar setting. You can’t master the online world only to go back to basics when it comes to the in-store experience! The retail IT landscape is constantly evolving and customers are increasingly demanding more experiential shopping than ever before.
From ‘till free’ stores like those offered by Apple, to digital signage, in-store WiFi services and even Bluetooth displays that send product info directly to mobiles in the near vicinity, this new array of tools are actually perfectly designed for a bricks-and-mortar store of an established online retailer. The challenge will be to decide which tools to utilise and how to ensure they are maintained so that they continue to work effectively. IT maintenance and support is a huge area often overlooked by even the most seasoned retailer, so should be of top priority to any retailer looking to enter the market for the first time. It’s not a place where you can avoid to get it wrong before you’ve managed to secure a strong foothold!
A seamless experience
Ultimately however, the success of any new to market High Street store remains the same as any retailer currently offering a multichannel retail experience. Regardless of whether the store is a final destination for existing customers, or primed to attract new customers, a seamless shopping experience that can be conducted either online or offline is essential to success.
This covers issues such as having the ability to synchronise the data from online and offline stores, so that customers don’t have to do everything twice, to the ability to order online from inside the store for high value/larger items, electronic receipts, to mobilized staff who can complete purchases from their units whilst on the shop floor. Customers need to feel that they are valued and remembered, regardless of which channel, or combination of channels, they choose to use during their shopping journey.
Time will tell if Amazon do roll out their High Street stores, but if they do, I will be very interested in seeing just how they combine their obvious technical know-how of the online world with the experiential nature of the High Street.
Alan Watson is MD of retail IT at Barron McCann.