Twenty years ago, Amazon sold its very first book--Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought. Since then, the online retailer has grown into a worldwide power that has redefined how consumers access goods.
As a marketplace, Amazon has been culturally transformational. It is ubiquitous, at the same time blazing a trail for innumerable other brands to open up digital retail shops. Today, a brand is more noteworthy if it does not have an online store than if it does.
But while the effect of the digital revolution on brick-and-mortar retail has been considerable, as the dust begins to settle we see that this age-old model is undeniably here to stay.
Book & Music Stores, Revisited
Last week, Sandeep Mathrani, CEO of mall operator General Growth Properties, announced Amazon could potentially open 300 to 400 in-real-life storefronts. Amazon itself walked back the claim, and indications are likely they will enter the space more slowly.
Many of us recall bookstore chains like Borders, B. Dalton and Crown Books with fond memories, but they have largely become obsolete in the modern age. Still, Amazon sees physical space to play in the vacuum they left behind.
It can be easy, while embracing this new digital economy, to shortchange the concept of face-to-face transactions that happen inside of a physical building. From Circuit City to Sam Goody to Virgin Megastore, brick-and-mortar retail has sustained more than its fair share of casualties in recent decades.
Many of those casualties, while ushered along by the new digital age, were actually a market-based winnowing of the herd. In some cases, problems with the specific companies, and not the business model, were to blame. Such was the case with RadioShack, as we've discussed before.
We can also consider the story of Tower Records, recounted in the 2015 documentary All Things Must Pass. The movie tells the tale of a mainstream brand that was short-circuited by digital file sharing and the rise of Napster and, later, iTunes. But, the movie also outlines the brand's failures, including a reluctance to enter the digital space that it could have owned, its misguided growth projections, pricing strategies, generational shifts and bad investments.
The takeaway is that while technology certainly did not help Tower Records, the brand had grown too comfortable and made too many strategic mistakes to survive.
In-Person Still Matters
These cautionary tales are reminders that the brick-and-mortar dynamic should not be discounted. After all, many transactions still must be done in person. Our services at Maaco, CARSTAR and Drive N Style would be difficult--impossible, really--to fulfill online without visiting our centers. The same is true for other automotive maintenance and repair, fast food, beauty salons, and many other channels.
The trick is building an omnichannel retail experience where digital supports your in-person efforts, and vice versa. Developing experiences that enrich the customer experience by saving them time, integrating with existing mobile apps like Yelp and Google Maps to help them find you, serving personalized sales offers that leverage existing customer data, and using review platforms to build a reputation that will drive traffic--these are just a few ways digital can prop up brick-and-mortar.
While the dust is still settling and digital continues to redefine retail, the winnowing is likely not over. In the near future, more brands will probably shutter their physical doors because of their inability to cope with this new reality. But these failings should be indictments of those specific brands and their limitations, not the flesh-and-blood retail model at-large.
When done well, in the right industries, the brick-and-mortar model can still flourish.