Tech Bytes: Three Reasons the Store Remains Crucial in a Digital Age

Here are three reasons that brick-and-mortar stores are still a vital part of any retailer’s omnichannel strategy.

Customer Convenience
Although home delivery may seem like the ultimate in customer convenience, the store actually remains a highly convenient means for customers to take possession of the products they buy. Leaving a store with a product you just bought offers an immediacy even one-hour delivery cannot match.

In addition, picking up an item bought online in a store often involves less time between purchase and fulfillment than home delivery of online orders, and generally eliminates pesky delivery fees. Other advantages stores offer customers include providing an accurate, real-time look at shelf availability and letting shoppers pick up an item while they are out and about, rather than having to wait at home for it to arrive.

None of this lessens the significant convenience factor of clicking on something online and having it show up on your doorstep, but that is not always the best option for every customer or every purchase.

Ancillary Sales
No matter how accurately a retailer is able to target an online shopper with suggested complementary purchases, there is no better ancillary sales tool than a store full of products customers can see and feel. A quick scan of a store will expose a customer to potentially hundreds or even thousands of products, and merchandisers carefully design layout and shelf assortment to maximize the possibility of ancillary sales.

In addition, stores provide the possibility for customers to discover their own ancillary product needs that no marketer or algorithm could ever predict. An in-store shopper examining the iconic cover art of the classic Rolling Stones album “Sticky Fingers” who is in eyeshot of a jeans display may well realize they need a new pair of denim pants. Try feeding that particular scenario into an online product recommendation database.

For retailers, stores provide valuable nodes in their distribution networks. Fulfilling digital orders from nearby stores reduces the time and expense associated with completing e-commerce transactions. Stores also allow retailers to cluster assortments based on local preferences, leading to lower SKU counts per store as well as reduced over- and understocks, markdowns and returns.

No matter how sophisticated a retailer’s digital strategy is, at the end of the day fulfilling customer orders on a consolidated basis through a store is much more efficient and effective than fulfilling them individually from a warehouse or distribution facility. Economies of scale apply to distribution as much as they do to every other aspect of a retailer’s business.

The information contained herein was obtained from sources deemed to be reliable. However, Salzman Real Estate Advisors makes no guarantees, warranties, or representations as to the completeness or accuracy thereof.
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