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Why Brick & Mortar Retail is Not Dead…

08/27/2014
Matt Milinovich, Strategic Retail Group, Retail Trends blog

The topic of the certain demise of the traditional retail store has been widely speculated and reported over the last few years as online retail sales have grown. This type of foreboding is a bit premature and the physical retail store is not disappearing, it is simply changing and many brick & mortar retailers are becoming strong online retailers.

In a recent study by Global Management Firm, A.T. Kearney, it is noted that retail stores still play a crucial role in the shopping experience even if some of the sales are shifting online. The study mentions that 2/3rds of customers purchasing online use a physical store before or after their transaction. The consumer still enjoys the shopping experience, and seeing and touching a product cannot be done online. Many online only retailers are currently considering the idea of establishing physical retail storefronts. The logic behind a decision to add a physical store when you are primarily an online retailer makes sense, as 90% of all retail sales are still taking place in a physical retail location. 

Brick & mortar retailers are working hard to improve and establish themselves as solid online retailers and, at the same time, modify their physical stores to make the in store shopping experience even better for the traditional shopper. These modifications include more interactive shopping displays [touch & try stations], smaller, more active stores [packing more customers into a smaller store makes the store seem happening & more appealing] and customer specials/coupons directly sent to phones of in store shoppers only.  

Online retail sales will continue to grow at a modest pace, but online sales will never replace physical retail stores completely. Some segments of online shopping are challenged in their efforts to replace or bring shoppers online like the grocery store segment. Many grocers across the country now offer online shopping and delivery of groceries to the house. While there were about 6.5 billion in grocery sales online in 2013, most consumers still prefer to do their shopping in stores and pick their own eggs, dairy, fruits, vegetables, meat & poultry over having it chosen by a grocery store employee and that is unlikely to change dramatically. So the neighborhood grocery anchored retail center is not going to disappear and neither will the service & food tenants that typically fill these retail centers.

The ever improving in store shopping experience and interaction with shopping experts will keep the customers entertained, informed and always coming back to the physical stores to get their retail needs fulfilled. 

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By: Matt Milinovich

Partner, Strategic Retail Group

Email Matt: mattm@srgaz.com

Phone: 602-778-3830

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