This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Bricks-and-Mortar Stores That Beat Online

NEW YORK ( TheStreet) -- For a small-business owner these days, it can be hard to tell whether opening a physical retail store is even worth it.

Store closings can be seen across the retail space, including such big-name chains as Borders (BGP), while large discount stores and chains including Wal-Mart (WMT - Get Report), Target (TGT - Get Report) and Best Buy (BBY - Get Report) shrink the size of some stores.
There are retail stores that still -- and will -- need a physical presence, experts say, especially those where people have an emotional connection with the product they want to buy.

Retailers continue to be affected by the recession of the past years, which slammed right into consumer spending. There is a bigger trend at play, though: Retailers continue to lose ground to e-retailers such as Amazon (AMZN - Get Report).

"So many stores are doomed. Web and pure-play retailers are killing them," Forrester Research analyst Sucharita Mulpuru says.

According to a February report by Forrester Research, U.S. online retail sales rose 12.6% last year, to $176.2 billion. The report, written by Mulpuru, expects U.S. e-commerce sales to reach nearly $280 billion by 2015.

"Every year, e-commerce sales have been growing at the expense of physical brick-and-mortar retailers as consumers increasingly look to the Web for its selection, prices and convenience," the report notes.

New shoppers are indeed a component of the overall growth in online shopping, but "a bigger component of the growth is the increased wallet share among existing Web shoppers who increase their spend in 'traditional' online categories like books and media products and ... categories that are frequently high-touch, high-consideration goods, like furniture or home appliances," the report says.

In addition, several new business model types have emerged to lead consumers into more online transactions, including: flash sale sites such as Gilt Groupe and Groupon; digital downloads of media content; and "made-to-order merchandise," Forrester says.

But before small physically bound retailers accept defeat, consider that online retail sales account for just 8% of total retail sales -- but excluding grocery sales, the penetration is 11% overall, the report says, even with categories that experience significant sales online, such as computers and software.

Over the next four years, Forrester projects 11% of overall sales to be transacted through the web channels.

Experts say retailers, regardless of what they sell, will have to offer a combination of digital, physical and mobile options. It's possible the final sale may not take place in the physical store.

>>>The Retail Store of the Future

"Our perspective is that there is a convergence of business models, not a replacement of business models," says Kasey Lobaugh, a principal with Deloitte Consulting and head of its direct-to-consumer and multichannel retail market group. "You probably ought to be thinking about the business model and not thinking 'I have a store, I'm trying to defend it.'"

Rather, business owners should question, 'What does my customer want to do and ideally what can I offer digitally, what can I offer physically and what would the best of both worlds offer?" Lobaugh says.

That being said, here are 10 examples of retail stores that still -- and will -- need a physical presence:

1 of 11

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
TGT $82.35 -0.77%
WMT $71.90 0.03%
AMZN $435.00 -0.55%
BBY $33.44 -0.09%
FB $86.74 -0.20%

Markets

DOW 17,698.31 -59.60 -0.34%
S&P 500 2,073.08 -4.34 -0.21%
NASDAQ 4,995.7760 -17.3470 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs