Think Tank: Why Bricks-and-Mortar Businesses Will Thrive in 2018
We’ve all seen plenty of recent headlines lamenting that bricks-and-mortar is dying. And with 93 percent of American adults under 50 using the internet and 77 percent of Americans owning a smartphone, it’s no wonder why people believe this flawed storyline. But for luxury retailers, beauty and tech brands, the physical location is still key for finding and retaining customers.
Last winter, Amazon opened the doors to its first physical bookstore in Seattle, followed by more than 30 pop-ups throughout the country and plans to open its 14th and 15th permanent locations in Washington D.C. and Austin in 2018. Additionally, online born-and-bred retailers are also realizing the impact of bricks-and-mortar, with brands like Warby Parker, Birchbox and Rent the Runway opening up their own locations in the hopes of gaining a larger following. Traditional retailers are also getting in on the action, with temporary retail experiences, like Target Wonderland, and M&M’s pop-up shop.
Our World Revolves Around Interactions
Our world is physical — one where we enjoy interacting with others and getting advice from store associates before purchasing something with our hard-earned dollars. While there’s an ease-of-use and convenience factor to online shopping, 49 percent of consumers prefer shopping in-store to take home items immediately. The ability to see, touch and feel products is just one of the many reasons consumers choose to shop in stores versus online. Furthermore, online searches for key products and services can often be more top-of-funnel, research-oriented searches, that ultimately guide a consumer to a physical business location as they move closer to an actual purchase during their customer journey.
Beauty Products Are Just Better in Person
Consumers don’t just want to witness a beauty product in action, they need it. Testing is vital to today’s buyer, and can only be accomplished in store. With product swatches out, shoppers can decide for themselves that works best with their skin, and what’s worth the investment.
Beauty brands understand this, and are further expanding their footprints in major cities, like New York City, to cater to Millennials. People like testing out lipsticks, lotions and makeup before purchasing, an experience best captured in-person. Ulta Beauty, a retailer once known for its stay in suburban retail strips, announced plans to open its first store in NYC in November, with plans to expand into Brooklyn by the end of the year. Sephora also opened another location in Queens, with further plans to expand to Brooklyn. Consumers will always want to buy cosmetics, and most times, it’s just better in person.
The Hybrid Solution: Showrooms
For brands that are straddling the line between physical locations and online, showrooms have become a big trend. These concept stores offer shoppers the ability to test, try and touch the product, and then opt for home delivery instead of carry-out. Using paid advertising, brands can target prospective shoppers on their social pages, in search results and in general internet browsing, and create an incentive for individuals to visit a store location. By not having any or limited inventory, brands can instead focus on creating a unique and personalized experience for consumers in the showroom — one that will create a sense of comfort and brand awareness for the shopper, and allow the employees to work with the individual and tailor to their needs.
Nordstrom recently announced plans to open a concept store, Nordstrom Local, in Los Angeles, that will serve primarily as a place for consumers to interact with employees, who can help them choose clothing based in different locations, pick-up online orders and return items. Modcloth also opened its first showroom in Austin earlier this year, to allow shoppers to try on different fabrics and pieces.
While e-commerce continues to grow and evolve, there will always be an important place for bricks-and-mortar stores within the customer journey and buying experience. Consumers still want to interact with products in real life, and value a personalized customer experience. As this need persists, local search will continue to play an important role in helping drive online customers to bricks-and-mortar locations. Thus, marketers need to make sure their physical locations are supported by a robust digital strategy so they can appear prominently in customer search results.
Brands that understand how to incorporate technology and hyper-local digital tactics into marketing their physical locations, while creating a more useful shopping experience, will continue to thrive as retailers.
Alex Porter is chief executive officer of Location3.
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