When online stores and marketplaces first began dominating the business-to-consumer landscape, many feared the death of brick-and-mortar locations. Such fears weren’t exactly unfounded. Forbes cited a study by ShopperTrak that found American stores saw about half the foot traffic during the 2013 holiday season than they had in 2010. Online shopping provides unparalleled convenience for the modern consumer, who is often incredibly busy and wants a wide variety of products to choose from.
The ease of shopping online creates a better experience for customers. Relaxation time doesn’t have to be abandoned for the hectic atmosphere of stores, and shoppers don’t have to juggle commuting, children and prior engagements. Consumers are also able to get more information online, said Forbes, and they can compare prices and specs across multiple stores.
With giants such as Amazon and eBay growing larger each year, it’s no wonder why observers were concerned. Now, it seems they no longer have reason to fret. Instead of assisting in the death of brick-and-mortar stores, many ecommerce companies are renting retail space in popular cities.
One might wonder why businesses are making the shift from a digital to physical presence. After all, ecommerce stores are able to accept online payments from across the globe, whereas physical shops are limited by language and location. If businesses are able to reach shoppers around the world, why would they contain themselves to specific locations? What’s more, physical stores require money for rent, utilities and staff. Many believed the major advantage of ecommerce stores was that they were able to redirect such expenses into other areas of the business. However, some online entrepreneurs don’t agree.
“I think our advantage over older retailers is that we don’t have legacy systems,” said Eric Alper, senior vice president of marketing for Frank and Oak, in a conversation with Slate. Frank and Oak began as an online clothing store for men and currently has 11 physical stores in the U.S. and Canada. “As a startup you have no systems, but you can create them and embrace modern technology. We start from cloud computing and we build our infrastructure from the ground up.”
Alper said this lack of “legacy systems” is what allows his company to focus on consumer preferences.
A study by Discover provided support for his implication about those preferences. The company found American shoppers aren’t taking their buying experience purely online. In fact, over half of those shopping for apparel, appliances, toys and electronics shopped both online and in stores. Consumers still see benefits to shopping in stores, and online businesses have noticed.
Amazon comes to Seattle
Amazon opened its first physical store – Amazon Books – on Nov. 3 in Seattle’s University Village, The Seattle Times reported. Amazon has long been a source of intense competition for brick-and-mortar bookstores, as its lower overhead allows it to offer books at much cheaper prices. Amazon Books, according to the newspaper, is a chance for the ecommerce giant to capitalize on the one advantage its physical competitors have – instant gratification.
Amazon already has data on consumer preferences in the city, which, The Seattle Times said, should give it a marketing advantage over other local bookstores. Still, the company wants to avoid the perception that its marketing will rely solely on statistics, calculations and data analysis.
“It’s data with heart,” said Vice President of Amazon Books Jennifer Cast. “We’re taking the data we have and we’re creating physical places with it.”
Warby Parker brings eyeglasses in stores
Warby Parker, a company that sells eyewear online, made a name for itself with its customer service and try-on options. Many online eyeglass providers relied on uploaded portraits and Web graphics to show consumers what they would look like with a particular pair of glasses. Warby Parker, on the other hand, allowed shoppers to receive a pair, try them on, and return them if the customer didn’t like the style. It was a business model that brought the company a lot of success. Still, Warby Parker recently opened its 20th retail store in San Jose’s Santana Row.
“We were just blown away by the response that we received from customers,” Dave Gilboa, Warby Parker co-founder, told Fashionista regarding the initial stores. According to the site, both channels have proven profitable for the eyewear company.
Distinguished from online competitors
Slate suggested that the move from online to physical is an attempt for ecommerce businesses to set themselves apart from their competition. New stores and services are popping up online every day, and the Internet’s abundance of advertising and payment processing options makes it difficult to stand out. Warby Parker loses its advantage if other companies copy its trial service; likewise, Amazon’s ability to accept global payments means little if Chinese-owned Alibaba can do so, too. According to Slate, a physical store might be the latest step in boosting a company’s presence from online store into lifestyle brand.
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