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4 Ways Brick-And-Mortar Can Compete With E-Commerce

Paragon shopping center in Singapore

E-commerce’s explosive growth has diverted revenue from brick-and-mortar establishments, massive chains and mom-and-pops. But analysts lamenting the death of the physical store may be mourning prematurely. Perspective is necessary. E-commerce represents single-digit percentages of consumer spending in many categories. It accounts for 10% of retail dollar volume overall. The majority of Walmart shoppers still pay by cash, a method incompatible with online shopping.

Korona Galeria Kielce in Poland

Many brick-and-mortar stores are losing market share at a clip that makes their leadership and investors uncomfortable. As some go out of business, others are adapting, innovating and experimenting to compete with online retailers. We partnered with CBIZ to present four methods storefronts can employ to recapture their customers.

1. Streamlining Checkout

Walmart checkout

Long checkout lines and slow cashiers frustrate shoppers and discourage them from returning. Retailers need to be cognizant of this and make checkout and store layouts easily navigable. Some stores are arming their sales staff with tablets and enabling mobile devices to accept payments, facilitating quick checkout. Accommodating time-saving payment methods like Apple Pay or leveraging mobile apps to anticipate shopper volume and what they will purchase can expedite checkout.

Destination shopping is a prevalent phenomenon. People on vacation will visit physical outlets they normally purchase from online. This is evidence that for many Americans, time is a scarce resource. On vacation, they have more leisure time to allocate to shopping.

2. Focusing On The Human Element

President Barack Obama talks with an employee as he selects a bone for Bo.

Shoppers often go to stores seeking an expert opinion and guidance. While Amazon has a number of amateur reviewers willing to write about their experience, these voices lack the broad knowledge (and physical presence) to be able to recommend a product or substitute on a case-by-case basis.

Knowledgeable employees can inspire a sense of loyalty in shoppers. If an engaged sales rep has devoted her time and attention to matching the shopper with the right product, that shopper may feel guilty for then scouting a better deal online. Employees should be trained to offer to put items in customers’ virtual or tangible shopping carts. Retailers can thus exploit social norms to lower the probability of people mining the store for knowledge and buying elsewhere. 

3. Reconsidering Inventory Management Strategy


If a store is in an urban, high-rent environment, it can consider cannibalizing some of its storage space to devote to floor space. Sophisticated, responsive supply networks make it possible to keep most inventory in a nearby industrial space. In this way, e-commerce keeps its overhead and prices low. Many people who go to stores to try things on may forgo the instant gratification of taking the item home if retailers can use their distribution networks to provide same- or next-day delivery. Space-constrained stores can then focus on broad, rather than deep inventory.

Conversely, stores in rural or suburban areas with low overhead and rents can use the facility as a flexible warehouse. They can push in-store pickup as a way to get customers through the doors. This often leads to additional on-site purchases and can encourage routine return visits.

4. Incentivizing And Motivating

Rendering of The Wharf's promenade in D.C.

Brick-and-mortar retailers must create incentives for shoppers to visit. They can use exclusivity or the illusion of it. J.C. Penney lost its best attribute when it introduced “every day low price.” Even if, on average, such a basket of goods has the same or lower price than the heavily discounted one, the chain divested deal hunters of the thrill of getting a bargain they believed was exclusively offered in the store.

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Related Topics: CBIZ