Can one retail channel truly exist without the other in today’s omnichannel world?
With traditional e-commerce giants like Amazon making the move to open brick-and-mortar locations, the trend towards an omnichannel retail experience is undeniable. Both digital and physical stores continue to play important, if not always equal, roles in the shopping journey of modern consumers.
What does each of these retail channels offer that is unique? What are common elements shared between the two? And most importantly, could retail today exist without the combined benefits of e-commerce and physical stores?
What are the Benefits of E-Commerce?
- No physical or geographical limitations. With e-commerce, a retailer is not bound by the location of their physical stores. In essence, this allows brands of all sizes to serve a much wider consumer base.
- Speed and convenience. A website is always open, allowing customers to make purchases on their own schedules (not just on physical store hours). When shopping online, customers also don’t have to contend with checkout lineups, making it a much faster path to purchase.
- Comparison shopping and ability to research. The internet has allowed access to so much more information than ever before. This is particularly true for consumers who have a need to learn more about the brands and products they engage with. Today’s consumers are intelligent and educated about what they’re buying. They are also super informed about pricing.
What are the Benefits of Physical Stores?
- Customer experience. The ability to utilize all the senses remains a top reason, consumers continue to favour physical stores. Not only are shoppers able to touch and feel those products they might buy, but they can also immerse themselves fully in the brand within the store.
- Instant gratification. When an item is required immediately, going to a brick-and-mortar location remains a top option for consumers.
- Knowledge of store associates. Fully trained and knowledgeable employees can provide vital information to a consumer. All in all, human interaction remains a contributing factor for consumers who choose to visit physical stores.
Omnichannel retail offers the opportunity for brands to be everywhere. Shoppers can find brands in a physical store, desktop computer at home, on a smart-speaker through to a smartphone, tablet or other mobile device. The goal of retailers who are working towards an omnichannel business is that of a seamless experience for the customer. In short, anywhere the customer engages with the brand, their experience will be the same.
Therefore, it’s not only important for the retailer to be everywhere but to offer a consistent brand experience everywhere. To accomplish this, the benefits of every channel (digital and physical) must be operating at peak performance.
Why are Both Digital and Physical Retail Critical for Modern Retail?
Together, e-commerce and physical stores can provide all of the things that matter most to consumers.
McKinsey Research and Harvard Business Review worked with a retailer who operates hundreds of stores across the U.S to learn just how important omni-channel retail customers really are.
The study discovered:
- 7% of participants were online shoppers only,
- 20% were store-only shoppers; and,
- 73% used multiple channels.
Findings also indicated that omnichannel retail customers spent an average of 4% more on every shopping occasion in-store, and 10% more online than single-channel customers.
Through omnichannel retail, the physical and the digital pack a powerful punch. Retailers who offer click & collect (or BOPIS) can satisfy the speed and convenience benefits of e-commerce and serve the (near) instant gratification required by some customers. Customer experience is enhanced when store employees and other in-store touchpoints have digital devices that provide inventory visibility, product information and additional brand knowledge. Together, physical stores and digital technology are more impactful to retail success than either of the channels alone.
We’ve all been asking the wrong question. It’s not how e-commerce and brick-and-mortar stack up against each other. Rather, it’s about how e-commerce and physical stores can stack on top of each other to push retailers to the top.