Tech Guest Viewpoint: Physical Stores – A Retailer’s Edge

Just a few short years ago, many people predicted that physical stores would all be replaced by pure-play e-commerce sites. By now, they thought, brick-and-mortar would be a thing of the past. Though we’ve seen some physical stores close, we’ve also seen some traditionally online retailers open storefronts. The demise of the physical store was greatly overestimated.



To put things into perspective, e-commerce sales in the first quarter of 2016 increased 15.1% from the first quarter of 2015, but e-commerce sales in that same period only accounted for 7.7% of total retail sales. These stats indicate that many consumers are still doing a majority of their shopping in-store.



If you analyze the way consumers shop, it becomes very obvious that they do not think of shopping in the traditional marketer’s concept of channels. Instead, they expect a seamless experience whether they are in-store or shopping on one of the many different devices they use daily. Forrester Research estimated that mobile devices will influence more than $1 trillion in sales both online and in-store in 2016.



This blend of digital and physical retailing actually gives stores an advantage over an online-only experience. Consumers can touch the product and use optimized digital experiences to make more confident purchase decisions and have richer brand experiences. Brick-and-mortar retailers can deliver that instant gratification, while online retailers continue to compete for faster and free shipping.



Google research indicates that searches based on words such as “near me” have increased 34 times on their platform since 2011, and the vast majority of these (80%) come from mobile devices. Retailers that expose real-time inventory for their store locations with in-store pickup have a competitive advantage over their online-only counterparts. And during the holidays, as shipping cutoffs approach, consumers are turning to in-store pickup for last-minute gifts, An added bonus to retailers is 46% of consumers who pickup in-store will most likely purchase additional items, according to UPS data.



In my own experience, I often check local stores’ inventory to see if an item I need is available to pick up on my way home, rather than wait for it to be delivered. I have even ordered items to be picked up in-store while traveling based on how near the retailer was to the route from my airport and hotel.



This digital convergence is being driven by the proliferation of mobile devices and retailers need to address customers’ needs in these mobile moments. To do this, retailers are required to sync their back-end systems with the web and app experience so that consumers can quickly locate stores, inventory and verify pricing. The process needs to be seamless whether the consumer is browsing while on the commute or shopping from the office desktop and once a purchase is made, the pickup process in-store must be efficient by having a convenient and dedicated pickup counter.



For instance, my local Best Buy store does a great job of this by placing the customer pickup near the entrance and ensuring the counter is properly staffed. Consumers love these types of services for the convenience and the ability to quickly complete the process which will keep consumers coming back. It may only be summer, but it is never too early for retailers to focus on getting the in-store pickup process optimized and have it ready before the upcoming holiday season.



Jason Miller is chief strategist of commerce, Akamai