For brick and mortar stores, it’s easy to think that online shopping will take over consumer retail marketing. According to Statista, “In 2021, over 2.14 billion people worldwide are expected to buy goods and services online, up from 1.66 billion global digital buyers in 2016.”
Despite the challenges brick and mortar businesses have to deal with, people still love to shop in them. Although eCommerce continues to grow, many people still prefer the in-store shopping experience where they can look and feel a product and take it home right away.
And retail shopping is a booming industry, whether a business is a brick and mortar or strictly online. According to the U.S. Census, “Retail sales hit a record of $6 trillion in 2018.”
The numbers are impressive, without a doubt. Retail businesses of all kinds, even brick and mortar stores, can take a piece of the pie.
Success for brick and mortar stores is achievable, but you still need to recognize the problems they risk facing.
Challenge 1: Competition from eCommerce
It’s no doubt that the top problem facing brick and mortar businesses is eCommerce competition. Due to the growing consumer demand for convenience, online shopping is dominating the retail market.
According to Sleeknote, “the number one reason people shop online is because they can shop 24/7.”
eCommerce businesses have the luxury of providing a wider selection of products with deeply-discounted products. They have the advantage of the growth of “showrooming,” where shoppers examine products in showrooms but purchase their products online.
Online shopping isn’t just done on laptops and desktops. Mobile devices are slowly becoming the new normal for consumers to make their purchases.
eCommerce businesses that invest time and money into mobile optimization can offer mobile-first payment options, instant checkout with the touch of a button and optimizing for mobile and desktop separately.
Challenge 2: Shopper Surveillance and Affordable Marketing
Because eCommerce businesses have technology by their sides, they also benefit from collecting data from customer preferences and trends of buying patterns.
When a consumer browses online stores, they leave an electronic trail of the products they see and the sites they visit. This makes it easy to target them with digital marketing, email marketing and social media marketing. Any business can utilize these tactics, but eCommerce businesses have the highest advantage because they have access to the data needed to target more customers.
“Social media has become the most popular content marketing tactic reported by 90% of B2C businesses. The next most used content marketing tactics are illustrations and photos (87%), eNewsletters (83%), videos (82%) and website articles (81%).” (Numbers and statistics provided by the Content Marketing Institute.)
According to Venture Harbour, “94% of B2B marketers use LinkedIn as part of their content strategy. Other popular platforms include Twitter (87%), Facebook (84%), YouTube (74%) and Google+ (62%).” (These numbers were provided by the Content Marketing Institute.)
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eCommerce businesses also have the advantage of scaling their growth with email marketing.
eCommerce businesses can use shopper surveillance to see whether their customers have items left in their cart, deliver exclusive deals and discounts to them, access a mobile audience and encourage customers to leave reviews by asking for them.
Challenge 3: Overhead
Because eCommerce businesses have the luxury of not needing a physical location, they save money on rent and upkeep like utilities and maintenance. They can expand their inventory, have their store stay open 24/7 and cut down on things like employee payroll expenses.
Brick and mortar stores have many upfront operating costs that can look intimidating.
- Business entity information can cost between $150 and $300
- Cash register or payment processing setup starts around $100
- Average U.S. cost for electricity per square foot is $1.47, and the average retail space is around 1,000 square feet
- Storefront rental costs vary wildly depending on location, from $87.55 per square foot in Des Moines, Iowa, to $3,400 per square foot in the heart of New York City
- Workers’ compensation, which is legally required, is about $1,400 annually
Brick and mortar stores have overhead simply because they exist.
Solutions To These Challenges
The limits of your brick and mortar store disappear when you supplement your operations with value-added and customer-connection opportunities.
Add value to the customer.
Brick and mortar stores can offer customers unique experiences that eCommerce businesses can’t: in-store exclusives, invitations to events or perks that offer value to customers. If your business can ship products to your customer, take advantage of that. Better yet, deliver it if you’re able to.
Offer local pickup.
According to N Channel, “The option to pay for a product and pick it up from a local location helps 44% of consumers make a purchasing decision.” Offering local pickup forces customers to walk through your doors and provide another opportunity to sell to them.
Offer better deals in-store.
Price-matching will keep price-conscious customers from shopping elsewhere. It will also drive more traffic to your store and create opportunities to engage with customers in a more meaningful way. Don’t lost out on the opportunity to create a lasting customer relationship.
Sync your online and offline efforts.
If you’re offering a deal online, offer it offline as well. If you’re not willing to do this for your customers, you risk leaving a bad impression a customer will always remember.
Are Brick and Mortar Stores Dying Out?
The challenges listed above seem overwhelming to brick and mortar businesses. But when it comes down to where people end up choosing to shop, other factors come into play that make physical store locations a desirable asset.
Despite the convenience online shopping delivers, most shoppers still choose brick-and-mortar stores over eCommerce. To put it simply, the brick and mortar store is far from extinction.
What Brick and Mortar Stores Have That eCommerce Stores Don’t
Providing instant gratification.
Many customers still prefer visiting brick and mortar stores because of the personal touch and the relationships they get to develop with a retail location. Many customers want to experience the product before making a purchasing decision. eCommerce eliminates that luxury.
Brick and mortar businesses have the advantage of being in a convenient location that consumers can easily get to. According to SEMA, “Studies show that 65% of shoppers actually prefer purchasing at a local retailer if an item is available in both a nearby store and online.”
Physical stores also have the advantage of creating a visually stunning storefront consumers will want to go into. If a store has an appealing design, customers are enticed to go in and see what the store has to offer them.
Knowledge and Trust.
Customers can feel a product and ask detailed questions to a trusted sales rep who can provide them peace of mind.
With eCommerce businesses, security and credit card fraud are huge risks when dealing with online shopping. Consumers run the risk of identity fraud and other hazards as their personal details are captured by eCommerce businesses and run the risk of phishing attacks and other forms of security fraud. It is much more difficult for thieves to commit fraud at a brick-and-mortar store’s POS system.
How Can Petra Help Your Brick and Mortar Business?
As time goes, the retail industry is seeing a major shift with brick and mortar stores. The challenges facing brick and mortar stores should not be a cause of concern. Remember that brick and mortars have longevity because many shoppers prefer the experience of shopping for instant gratification before making a final purchasing decision.
If you’re ready to continue growing your brick and mortar business, contact Petra today to learn more about a partnership!