Success Stories: Blurring the Lines Between Brick-and-Mortar & Online

December 27, 2016/ Jessica Velasco /

Omni-Channel Retail is Now the Norm

The days in which retail could be cleanly divided into brick-and-mortar and online channels are now truly a thing of the past.

Recent moves by several major retail brands around the world served to drive home a clear message: we are now living in a omni-channel world, and retailers must adapt to survive.

Amazon’s Latest Development Sets a Precedent

In early December, 2016, international retailer Amazon unveiled their latest project: Amazon Go, an innovative new concept for the brick-and-mortar retail space.

These “grab-and-go” convenience stores allow shoppers to simply pick out what they want from the store shelves, add it to their bag, and leave—no need to wait in a checkout line. To pay, consumers use the Amazon Go app. Each item removed from a store shelf is added to an online cart, and upon leaving, the total is automatically debited from the user’s account.

The initial beta test of the prototype store in Seattle was conducted with Amazon employees; however, the company intends to open the store to the public at some point in early 2017.

Amazon Go is a sequel of the brand’s other successful cross-channel concepts, including physical bookstores, restaurant deliveries and grocery deliveries.

As More Brands Join the Movement, Omni-Channel Becomes the Norm

Amazon Go brought relatively unknown innovation to the mainstream media. However, other companies around the world have been realizing omni-channel success for quite some time.

For example, Home Plus, the South Korean arm of retailer Tesco, has been experimenting with a similar concept since 2011. The company introduced a concept store void of actual products, but full of product images. These images, along with corresponding QR codes, lined the walls of subway stations. Shoppers simply scan the products they want, checkout, and go about their business. Meanwhile, the products ordered are delivered directly to the shopper’s home.

Other online retailers including Warby Parker and Bonobos recently expanded their operations to physical spaces as well. Now, consumers have the luxury of experiencing the most flattering styles with the convenience of online shopping.

Together, these companies all arrived at the same conclusion over the last half-decade: the future of commerce is not defined by either brick-and-mortar or online sales, but by how well those two channels can work in tandem.

Benefits of an Omni-Channel Sales Method

Why are online retailers so keen to invest the time and resources necessary to expand their business across multiple integrated channels? In truth, merging channels to create a cohesive, solid brand experience for customers can deliver several unique benefits for merchants.

Improving the Customer Experience

According to data published by TimeTrade, 68% of consumers enjoy having the option to go into a physical store and interact with a product before making a purchase. Millennial and Gen-Z consumers were most responsive to the idea, with 71% approving of the idea.

Going into a store allows customers get a feel for products, as well as ask questions and get additional assistance if necessary. This “human touch” can be a major factor in customers’ decisions regarding whether to make a transaction.

Even if a shopper ultimately buys an item online, the ability to see and experience a product makes that person more confident in the purchase—thereby reducing the risk of returns and friendly fraud.

Introducing New Sales Opportunities

Some retailers, like Bonobos, choose to use their retail space solely as a showroom. They keep one of each item on-hand, allowing customers to interact with the products, then order the ones they want to buy. For other retailers, though, leveraging physical spaces can mean opportunities for new sales.

With Amazon Go, the new storefront concept allows the company to break into a market that would otherwise have been outside of their constraints. Plus, the reduced friction as compared to traditional convenience stores may give them an edge, drawing customers who like the idea of being debited automatically as opposed to waiting in line and checking out.

In both cases, though, the store is a great marketing vehicle, allowing retailers to keep brands present in front of the shopper while also building brand equity and prestige.

 Cross-Channel Shoppers are a Treasure Trove of Data

While online shoppers represent an excellent resource of consumer data, much of that data is static information—customer demographics, purchase information, payment type, etc. As useful as that may be in some cases, there is a limit to what static information can reveal about consumers; it’s the ability to witness consumers in the process that really brings the data to life.

Everything from the way in which customers interact with products to their general impressions of seeing a name they know as an eCommerce brand in a physical space is all highly valuable information.

A retail location is more valuable for eCommerce brands than any focus group could possibly be. When merchants can observe customers in the act of shopping, they can see customers at their most honest, and that is something that no other form of market research will offer.

Going Omni-Channel is Essential for Retail Success

eCommerce retailers now find themselves in a post-single-channel retail environment. While it’s still entirely possible to operate in an online-only manner, it’s likely that an omni-channel approach will increasingly become the norm.

Online retailers who possess the scale to venture into the brick-and-mortar environment will likely be able to reap the rewards if they manage to do so effectively. For retailers who already operate multiple channels though, it’s less of a choice and more of an essential—keeping online and brick-and-mortar channels separate is no longer feasible.

It’s time to embrace omni-channel integration to ensure continued future growth.

Last Update: December 27, 2016