The following is the final article in a 3-part series called “Attention Shoppers… The Competitive Strategy Approach to Addressing the Elephant in the Room of the Retail Crisis: The Customer Experience”

One of the greatest retail debates of the last decade is over the online vs. brick-and-mortar contest.

Questions that retail analysts, marketing executives and, most importantly, consumers are probably pondering are numerous, including:

Which retail model is more convenient or affordable?

Which model delivers greater value to consumers?

Will the popularity of online retail mean steady decline of brick-and-mortar stores as we know them?

Which retail model is preferred?

To answer the question of preference; brick-and-mortar still reigns supreme over online retail, despite significant gains in e-commerce sales.

Online sales steadily gain

One needn’t be a retail analyst to expect a significant spike in online retail sales as a result of the pandemic shut downs. According to the U.S. Census Bureau Annual Retail Trade Survey, online sales in the U.S. jumped 43 percent in 2020, up from $571.2 billion in 2019 to $815.4 billion.

Fast forward to 2022, and U.S. ecommerce sales passed $1 trillion for the first time.

While e-commerce sales are gaining on brick-and-mortar, U.S. brick-and-mortar retail sales for the same 2022 period still outpaced online sales by 11 percent, with $6.417 trillion in sales.

The benefits of brick-and-mortar stores must obviously outweigh the appeal of online retail, if only evidenced by the gap in sales results. Customer service tops   the reasons why brick-and-mortar is preferred.  In fact, even with improvements in e-commerce, 82 percent of U.S. consumers prefer human interaction. Further, customers are willing to pay a 16 percent price premium for attentive and courteous in-store service.

Brick-and Mortar for the Win-Win

The real question for brick-and-mortar when all factors are considered is: How can brick-and-mortar reap the benefits of both models profitably and in a way that satisfies consumers?

“Omnichannel” has been the buzz word in retail for at least the last decade, and it can be a profitable solution for brick and mortar retailers – who are in a better competitive position to take advantage of the myriad opportunities to reach consumers where they are: in-store, in community (think cross promotions), online, social media to name a few.

Another retail buzz phrase to consider: BOPIS, or “buy online, pick up in-store.” BOPIS is buzz-worthy for sure, as 70 per cent of U.S. consumers prefer the convenience of this hybrid shopping method. Consider never losing a customer because the item he or she wants is not in store, but available online – either ordered by staff or by the customer with directions from staff, and picked up in store (or delivered for another price premium). The other benefit of BOPIS is the traffic generated by customers who order online and travel to the store to pick up purchased items, neatly packaged and ready to go.

Beat Them and Join Them

Brick-and-mortar retail can maintain its built-in competitive advantage over e-commerce and its gains by embracing the good of online sales, and fortifying it with all that consumers already love about in-store shopping. Here are 5 ways for brick-and-mortar to profitably beat and join the e-commerce movement.

  • Offer exclusive omnichannel promotions that reward customers who shop across both channels
  • Employ omnichannel inventory management to track inventory across both channels
  • Track customer behavior across channels to personalize user experience with product recommendations, promotions, and marketing messages
  • Utilize social media, mobile apps and other digital channels to showcase products, share in-store events, and connect with customers on a personal level
  • Train all staff on all existing sales channels (not just the physical store), including the store website, social media platforms and store mobile apps (including 3rd party shopping apps)

Of course, each approach must be applied with logistical and training support to make UX satisfying and stimulate add-on purchases not initially sought by the consumer.

The point remains, options and tactics are practically endless for the brick-and-mortar retail operator who embraces the freedom, multiple sales channels and customer satisfaction that can result from deploying all of the tools that bring customers in the door (and back again).