Despite the growth of online retail, physical stores remain the king of retail. A 2015 study showed that 85% of consumers of consumers prefer to shop in a physical store instead of online. Even in Amazon's case, 71% of customers would prefer to shop at a physical Amazon store instead of going to Amazon (AMZN - Get Report) .
This is hardly surprising, as brick and mortar stores offer many advantages. Customers can look and hold products, consult a sales professional, and do not need to wait for the product to ship. These are all things which online retailers cannot provide without opening their own brick and mortar store. A number of these online businesses are doing just that.
But transforming from just an online store to one with a physical storefront can be challenging. Here are some key benefits opening a brick and mortar store can give an online business, as well as key ways to build on those advantages.
Importance of Visibility
The Internet is a big place. And a key challenge for any online retailer is distinguishing themselves from the thousands of other online retailers, especially when the customer can just leave by typing in a new address.
Establishing a physical store can go a long ways towards improving visibility. It shows that your store is something more than a quirky niche store. Individuals who normally do not shop online can discover the store, and a physical store can become a presence in the community, ensuring a steady stream of loyal customers in the area.
In order to get that visibility, a retailer needs to work to appeal to the community. Regularly attending community events, getting good sales managers and retail workers, and investing in keeping customers loyal just like you do with online shoppers are key ways to attract a loyal physical consumer base.
Syncing Online and Physical Stores
Customers will often check out a product physically and then buy it online, as well as the reverse. This is particularly prevalent in clothing, eyeglasses, and body products. Highly regarded eyeglass retailer Warby Parker is among the companies that have opened bricks-and-mortar locations.
Retailers that sell physically and online increase the likelihood that a consumer will buy products or services from them. Amazon and other retailers use a "hands-free" strategy to take advantage of this. They let customers sample a book or try out some clothes at the physical store. The customer orders it to be shipped to his home like he had ordered it online, and then he can walk out of the store without needing to lug a heavy bag.
This approach also means that stores with an online element can keep a smaller inventory compared to bricks and mortar operations.
Pop-up vs Permanent?
If you're not ready to establish a bricks and mortar store, then you can opt for a pop-up store. A pop-up store is a temporary location -- often in a mall -- that has a lease of only a few weeks. This can save you on costs related to owning a physical store, such as rental agreements, conveyancing fees and local taxes. An online retailer can set up a pop-up store for a short period of time, engage passersby and then close with a likely benefit in brand recognition. They often set up during heavy shopping periods, including the holiday season.
While pop-ups are not as permanent as a bricks and mortar store and cannot be a community fixture, they offer several advantages. They are easier to set up, as landlords are often willing to give more leniency to a short-term lease than a long-term. And since a pop-up will last for just a few weeks, they give you more flexibility in marketing and sales strategy. If you brainstorm an idea which you are concerned might not work, then you can set up a pop-up store and see what happens.
It should be noted that many successful pop-up stores become successful and end up being permanent, which is a good thing. Ultimately, a pop-up store can be a great way to find out if your online retail business is ready for a physical store.
It's Not Online vs. Physical
E-commerce doesn't represent the death of the retail store, and yet nothing can be further from the truth. What will happen is that physical stores will gain an online element, and some e-commerce retailers will open physical stores.
This synergy represents the future of retail, and so smart online retailers will look into opening a physical store when they are ready. From there, it is a matter of appealing to the community and ensuring that all parts of your business are operating together at maximum efficiency.