Bricks And Mortar, With A Dash Of Service For Customer Stickiness

Can bricks-and-mortar survive the eCommerce onslaught?

In an interview with PYMNTS’ Karen Webster, Dave Barrowman, who serves as Vice President of Innovation at Skava, said that in the physical retail space, the death of physical retail remains greatly exaggerated. With some ingenuity and attention to the value proposition of the tangible retail experience, he told Webster, players big and small can do more than survive — they can thrive.

Data Point One: 5,321. This is the estimate, according to an analyst at Retail and Technology, of the number of stores that have closed so far in 2017. Said Barrowman, “It is tough out there. In the late 1990s and early 2000s, a lot of retailers over-expanded and there is rationalization going on” as customers have left the mall environment and shopping has shifted online.

Retail now, agreed Barrowman and Webster, has fractured across several lines, and pure bricks-and-mortar plays are finding it hard to compete with online-only companies and also hybrid models that, as Webster termed it, “have a foot in each camp and find it hard to compete.”

Companies straddling that commerce line face their own challenges, said Barrowman, because “if you are a middle-of-the-road retailer that has got a perfectly good eCommerce experience and a perfectly good brick-and-mortar experience, but your product mix … is not able to … surprise and delight in the way that some of the retailers in the brick-and-mortar space are able to, then what do you have? It is tough to compete if you are going up against Amazon and their ability to have breadth of product, depth of product and phenomenal fulfillment.”

Data Point Two: 94 percent. This is the total number of retail sales that still happen in brick-and-mortar locations. The number has not changed, not much anyway, even though eCommerce has grown, said Barrowman. This is because people still like to touch things that they are considering buying and try them on for size — literally.

“Online is a great place once you know exactly what you want,” said Barrowman, pointing to books and electronics as examples. But in terms of fulfillment, there is the lure of instant gratification when it comes to buying something in person.  And, pointed out Webster, the recent joint study between Visa and PYMNTs showed a wide range of purchases that require consumers to walk into a store to get what they need.

Said Barrowman, there has been a shift in online buying, at least for some categories, where once only physical transactions took place. “You see increasingly large purchases moving online,” he said, “as, obviously, travel has moved online.  People buy cars online … but in a lot of cases there is value in the human interaction.”

Data Point Three: 88 percent. This is, according to a Harris Interactive study, the number of people who would prefer doing business with a company that provides quality customer service versus just dealing with a company known for innovative products. That, said Barrowman, is where the nexus is between the brand, the product and the customer. Salespeople who are knowledgeable are key bridges to building relationships.

And rewards are, too — all in an effort that can keep repeat business in place and keep shoppers from jumping ship to the online-only realm.

“The opportunities to engage the customer go beyond just that moment of purchase,” he said, adding that “brick-and-mortar shopping should be fun and social and educational” — and in the case of smaller, specialized retailers, a community focus can help make a difference.

Writ a bit larger, stores like Sephora and Whole Foods have made the leap into making the tangible experiential. He noted that technologies, including mobile POS and kiosks can help service customers via mobile and other avenues, while keeping experiences in-store. Skava, he said, has been focused in part on helping retailers leverage data to customize and personalize the online experience, crossing the Rubicon from physical retail to online, when the reverse has so often been the trend.

“We lose something when we just focus on the efficiency of shopping online … we lose the fun and the energy,” surmised Barrowman.