NEW YORK ( MainStreet) -- The Internet killed the music business, ruined the newspaper industry and has effectively brought the publishing world to its knees, and for years there has been speculation it would do the same to bricks-and-mortar retail stores, as consumers began to flock online for their shopping needs.
These fears reached a fever pitch in recent months as such major retailers as Blockbuster and Borders, once thought to be powerhouses in the industry, have been forced into bankruptcy largely due to competition they faced from online services including Netflix and Amazon. But even with these setbacks, rumors of the death of the bricks-and-mortar store may be vastly overstated.
|Apple is an example of retailer that has made its stores more of a destination and less of an errand -- a model experts say more bricks-and-mortar retailers should copy to compete with online sales.|
"Way back when the Internet first started up, lots of people were calling me asking what we will do with all the empty retail stores," said Mike Gatti, executive director of the Retail Advertising and Marketing Association, a division of the National Retail Federation. More than a decade since the first major retailers set up shop online, bricks-and-mortar stores are still here, and many continue to thrive.That doesn't mean it's business as usual. Each year, more and more consumers venture online to do their shopping, lured by websites and smartphone apps that make it easier than ever before to spot deals, compare prices, research products and ultimately make a purchase while on the go or from the comfort of their own home. Last year online sales increased by nearly 10% from 2009, far outpacing the retail industry's overall growth. Just because more people shop online, though, doesn't mean they'll stop shopping at stores completely. Indeed, for most retail sectors, a physical store can serve a fundamentally different function, giving consumers the ability to see, taste and touch the products in a way that is impossible online. The challenge for retailers in the future, industry analysts say, will be to figure out a way to play up the strengths of the bricks-and-mortar store while incorporating new technology into the experience. "Everyone is saying the store is dead, but I say long live the store," said Lisa Gomez, a senior manager who studies the retail section at Deloitte, a consulting firm. "The physical store is going to remain central to the shopping experience, but the walls are coming down. Customers are going to want an updated, unique experience in stores, and retailers will need to figure out what exactly they want and how to give it to them." Already, big and small retailers in the U.S. and abroad are beginning to adapt to changing consumer demands by adopting new technologies to make their stores stand out in the face of online competition.