I’m a pretty frugal consumer, I’ll admit, and it’s a good thing, because I’ve got a baby on the way and student loans to pay off. I typically don’t buy things unless they’re on sale (a real sale, not one of those artificial ones created by obscenely high MSRP games) or I can get a good deal on them somehow. Even at the grocery store, I tend to go in with coupons or with sale knowledge so I can stretch my dollars further.
Thus one of the reasons I’ve stopped shopping retail stores for items like consumer electronics, entertainment media and the nicer half of my wardrobe is because I’ve learned that by shopping online, I can not only compare prices more easily and watch for sales, but I can also do so in the same amount of time that it takes me to get in my car, drive to the store, poke around for items, compare marketing claims on boxes, consider the marginal benefits of each item, sigh as I compromise on something, get up to the register, stand in line, check out and go home. What’s more, by shopping online, I also make myself more certain of my selections, more confident in my compromises (thanks to user reviews), and less likely to impulse buy. For me, it’s a win-win situation. And, I suspect, it’s going to become that way for many other people as online shopping slowly becomes the norm.
But it’d be foolish to assume that traditional retail brick and mortar stores are going to vanish entirely. As I explained yesterday, the onus is on them to change with the times. And yet they can get away with not changing quite so much if they’re a destination store, a gift shop or a deep discount store, because customers are more willing to put up with the retail hassle of dealing with these places than they might be elsewhere. Grocery stores, too, are probably not in any danger of going extinct (though many of them have got to change!) since a large part of buying food is the perception of buying fresh. There may one day be a market for online food delivery services that are administrated by a kitchen computer that can make use of RFID tags, planned menus and customer usage data, but we’re a long way off from that at the moment. (More on that particular vision of the future tomorrow!)
So, here are a few reasons I expect these retail categories, and their big box store brethren, will be around for awhile.
1) Retail shopping provides people with something to do. Even in today’s vast array of entertainment options, shopping remains a popular thing to do. The perception is that people don’t shop if they don’t have money, they don’t go shopping. That’s patently untrue, and anyone who’s ever worked in retail knows that at least half (and for smaller retailers, probably closer to two thirds or three quarters) of customers who walk in the door of a non-grocery retail store don’t actually buy anything. They’re just killing time, or looking, or pricing items, or trying to get ideas. Sometimes, they’re waiting for their spouse who’s next door, or trying to educate themselves about products they don’t know anything about so they can buy a gift for someone. Getting customers in the “buying mode” is one of the most difficult aspects of working in retail sales, because so many come in determined not to buy anything, or to only buy the one item they originally planned to buy when they walked in the door.
Stores that offer products that are fun to look at, but which aren’t necessarily practical to own, are always going to get foot traffic. That’s one reason that teenagers and college students love to go hang out at Best Buy, Wal-Mart or shopping malls despite being broke; they’re great places for groups to gather without having to spend any money.
2) Retail stores will always offer the ability to touch and feel a product. If you’ve ever gone shopping for an appliance, you probably understand how important it is to actually see the unit before you order it. An online video or factsheet just isn’t enough; you’ve got to make sure you’ll be able to use the thing, to see how much space it provides or how it looks next to that other appliance you’ve got your eye on. Virtual Reality technology isn’t quite ready to provide this experience online, so seeing an item in a showroom is particularly important, even if the customer then goes home and orders from an online retailer (as an increasing number are wont to do).
But this suggests a possible future for the relationship between online stores and bricks-and-mortar (B+M); or, as the relationship is sometimes known, “click and mortar.” A C+M retailer could feasibly set up showrooms with featured items and have staff patrolling the floors not to make sales, but to ask questions. If a customer was ready to buy, the staff could provide the customers with a computer on which they could place an online order, or email them all of the relevant information they’d need to make the purchase from home. One advantage of this system would be that staff would not need to be paid on commission, but rather, could be seen as part of the entire company’s sales. Making the intangible actually tangible to customers would benefit everyone, and it would likely increase sales of big-ticket items. (To be fair, this same idea could even be applied to clothing stores!)
3) Retail shopping provides interaction with actual human beings if you have a problem. Probably the most frustrating aspect of dealing with an e-tailer like Amazon.com is when you have a problem – it’s very difficult to talk to an actual human being due to all of the automated systems the e-tailer has in place. For this reason, some people prefer to shop at a C+M retailer so they can go into the physical store and raise holy hell if their order is wrong.
Of course, there are problems with this system. I ordered a new book through Barnes and Noble’s web site and received a damaged, obviously used copy a few days later. When I went to the store to have it corrected, they had to order in a new copy, which required an extra week of time through their in-store system. (Had I just re-ordered from the Web, it would have taken 2 days.) They didn’t really care about making me happy because, in their minds, I wasn’t their customer. The lack of personal connection employees feel to the web sites (which are almost always treated as separate entities) prevent them from caring quite so much about solving problems.
On the plus side, however, some people do enjoy having a physically present employee who they can yell at and work with to try to get some results. It’s much more satisfying to deal with someone in person than to deal with than a customer service rep on the phone.
Anyhow, I doubt retail stores are on the way out anytime soon, though I do suspect that many are going to have to drastically change or fade away. For example, I’ve long been saying that RadioShack needs to shift its focus fast or get out of the way, and I’ve been predicting Blockbuster’s doom for years now. (I also anticipated Circuit City’s demise, but, to be fair, who didn’t see that one coming?) I also suspect that Borders and Barnes & Noble will begin to vanish soon and scale back to destination stores. But in terms of Best Buy, Toys ‘R’ Us, Kohl’s or Old Navy – all stores that either offer an experience or a big discount, or both – online sales aren’t going to be beating these stores out anytime soon.
What are your thoughts? Share them below!