Less than two years ago the predictions for Brick and Mortar were dire, with the CEO of Wayfair writing in the Wall Street Journal that retail needed to "Wake up" to the superior ease, options, and transparency afforded by online shopping. However as we enter 2016, it's starting to become clear that these predictions were overblown. After all, at a market capitalization north of $11B, Macy's is still worth more than Bonobos, Gilt, Warby Parker, Jet (and a few others) combined. If 2014 and 2015 were the years of e-commerce, there's a good chance 2016 will be the year we rediscover the things we love about stores.
The race to become "Omnichannel" has been played out. Today everyone uses a combination of online and offline tactics, reducing some of the advantages presented by pure online plays. Though most online shopping still happens on PCs, 95% of smartphone users have used their phones to research local brick & mortar businesses. All retailers have websites, and most have apps. Even small boutiques are on social media, accept payments through Square, and use sites like Squarespace to hack their e-commerce offering. Even artisans who used to make a living selling at craft-fairs and to local shops have migrated to Etsy. As brick and mortar stores continue to adopt the e-commerce world's best practices, we will see continued investment in in-store retail experiences due to heightened consumer demand.
Personalization works in stores too. The abundance of options online means that retailers need to work harder to make consumers feel like the experience is catered to them. Examples in online retail are abundant, but we're starting to see options introduced to the brick and mortar experience both through personalized items (such as Converse's personalized Chuck Taylors), and personalized coupons and discounts. 70% of young consumers say they'll give away more information about themselves in exchange for tailored discounts. When you collect these emails in store, retailers don't have to worry about their offers relegated to a spam filter.
Events and spectacle. Stores with an established retail presence are also better equipped to make offline shopping an experience. Sure social media makes us feel like our favorite celebrities and designers are listening to us, but the typical consumer is now aware that it isn't really Rhianna tweeting and crafting her Instagram captions. We saw this played out throughout this past Fashion Week, as brands competed to become more accessible, hoping to draw customers into the store. Competition to create a memorable spectacle in-store turned into a veritable explosion of Kardashians, sports stars, and personalized invite codes. Pure e-commerce plays can't do that without a brick and mortar partner.
More options. It's true that the experience of shopping online has become normalized. Today consumers have more options. Established retailers are in a much better position to offer the breadth of offering through payment plans, offers on returns and in-store pickup. Stores also can be arranged to encourage consumers to spend more. They can set up cafes so people sit and hang out, as Barnes and Nobles was famous for doing. The longer you stay in a store the more money you inevitably spend. It's harder for e-commerce to have that type of control over customer's behavior.
And it's also nice to get outside, every once and awhile.