The Changing Climate of Retail: Maintaining a Successful Brick-and-Mortar Presence
Feb 18, 2016 11:09AM ● Published by Cate Reynolds
Main Street in Downtown Annapolis
In today’s fast-paced, technologically advanced world, many tasks can be completed by simply clicking a mouse or tapping or swiping the screen of a mobile device. Indeed, the Internet has changed nearly every aspect of daily life. But perhaps one activity that has been dramatically transformed is shopping. Although e-commerce has existed for several years, it really took off in 2010, following the recession. Economic recovery, coupled with improved technology, boosted the growth of e-commerce—making it possible to buy nearly any product imaginable online. But for brick-and-mortar stores, e-commerce posed challenges and even threatened the success of their businesses. After all, it’s difficult to compete with technology that allows consumers to shop from the comfort of their home—anytime of the day or night. But despite the convenience of e-commerce, brick-and-mortar stores still remain a preferred method of shopping for consumers.
Although it may seem as if e-commerce dominates the retail landscape—and shoppers have eschewed brick-and-mortar stores in favor of the 24/7 shopping experience that e-commerce offers—that is definitely not the case. In fact, according to Speed Commerce, Inc., a company that provides e-commerce technology and service solutions to retailers and manufacturers, brick-and-mortar business is growing at about four percent a year, while e-commerce is growing at about 16 percent a year—representing just a few percentage points of overall retail activity.
In addition, WD Partners, a retail agency focused on the future of customer experiences, conducted research to determine the “shopping appeal” of brick and mortar, online, and a combination of the two. The results of their studies revealed that the top two appeals for 75-80 percent of consumers across all demographics were immediate ownership and “touch and feel”—aspects in which brick-and-mortar stores hold the distinct advantage.
“People remain social creatures,” says Casey Willson, Main Streets Program Manager at the Small Business Development Center at the University of Maryland. “And a shopping expedition with friends and family, along with good interaction with knowledgeable and personable salespeople, holds immense appeal for many customers, especially when combined with a good dining experience.”
Benefits of Brick-and-Mortar BusinessesDepending on the product or service, e-commerce offers seemingly unlimited choices and a wide range of prices. However, brick-and-mortar stores still have distinct advantages over e-commerce. Perhaps the most significant benefit is face-to-face customer interaction. Consumers who shop at stores receive professional customer service from salespeople who have thorough knowledge of the products. They can also see and touch the merchandise—instead of looking at an image online. In addition, many stores have added a “shopping cart” feature to their websites, which helps generate online purchases and increases sales.
Shop Local, Buy LocalBrick-and-mortar stores also benefit from the concept of “shop local, buy local.” Many consumers want to support their local economy and prefer to shop at stores in their community. This is evident by the popularity of local towne centers and the downtown shopping districts in Annapolis, Easton, St. Michaels, Berlin, and Chestertown.
“Almost all of our small merchants feel a change in mood regarding customers,” says Willson. “Customers’ feelings of security are increasing, and, hence, easing the reins on disposable income.”
In fact, according to the Institute for Local Self-Reliance, which provides innovative strategies, working models, and timely information to support environmentally sound and equitable community development, businesses involved in a “buy local” campaign increase their revenues at twice the rate (around 7 to 8 percent) of businesses that aren’t involved in a “buy local” effort (around 3 to 4 percent).
Adapting to ChangeWhen e-commerce began to thrive, brick-and-mortar stores were faced with a challenge: In order to succeed, they had to adapt. Of course, depending on the product or service they offered, this process was easier for some stores than others. Some businesses had to reinvent themselves and offer products and services that online vendors couldn’t provide; others only had to make minor adjustments. Perhaps the best way to illustrate how stores adapted to e-commerce is to assess how three local businesses successfully maintained their brick-and-mortar presence.
Known for its exquisite jewelry and wide selection of diamonds, Zachary’s Jewelers has established a brand and built a level of trust among its customers since opening its Annapolis location in 1992. (In 2010, Zachary’s opened a second location in Severna Park.) Unlike ApplianceLand or Higgins & Spencer, Zachary’s adaptation to e-commerce has been somewhat easier because of the type of merchandise it sells. Jewelry is a luxury item that customers need to see up close and buy in the store. Plus, Zachary’s offers one-of-a-kind items, including custom-design engagement rings, that can’t be purchased elsewhere.
“E-commerce has actually been good for us,” says Steve Samaras, owner of Zachary’s Jewelers. “Customers do research online and compare prices, but then they come to see our jewelry and buy from us. If you’re spending thousands of dollars on an engagement ring, you want to see it, touch it, and know exactly what you’re getting, and you can’t do that online.”
Located in St. Michaels, Higgins & Spencer, a family-owned furniture and interior design store, has been furnishing homes since 1942. In order to adapt to e-commerce, Higgins & Spencer differentiated themselves to ensure that they stood out from the competition.
“By offering personalized customer service and making our customers happy, we get a ‘leg up’ on e-commerce,” says Spence Stovall, vice president of Higgins & Spencer. “We really get to know our customers and form good relationships with them. Our customers can also see and touch our products, and they work with one point person who addresses all their concerns. So there’s no 800 numbers or dealing with different salespeople. E-commerce can’t offer this type of service. We also have a good reputation in the community. Some customers have been with us for years, and it’s great to have that type of loyalty.”
With locations in Annapolis, Rockville, and Beltsville, ApplianceLand offers a wide range of household appliances and prides itself on good old-fashioned customer service. Locally owned, the business offers unbeatable prices and quick and professional delivery. In addition to selling appliances, ApplianceLand began offering services that aren’t available online, such as kitchen design, cabinets, countertops, and flooring to appeal to their customers’ needs and compete with e-commerce. Offering service before, during, and after the sale is the key to success and the revitalization of local brick and mortar.
“When it comes to appliances, it’s definitely better to shop at a local dealer,” says Tony Patane, owner of ApplianceLand. “Not only do we offer lower prices, but we know the products and provide excellent customer service. We love the hands-on interaction with our customers and enjoy installing the appliances in their homes. We’re dedicated to the concept of local retail, and we love making our customers happy.”
As technology continues to improve and e-commerce evolves even more, brick-and-mortar stores must continue to adapt. The bottom line: Business owners need to determine if they’re growing or standing still.
“Brick-and-mortar businesses need to keep growing—by observing changes and adapting technology to satisfy their customers—because if they’re standing still, they’ll get left in the dust,” says Willson. “I think the future for businesses is omnichannel: having a website and social media presence, being mobile-enabled, managing their reputation online by monitoring review sites, such as Yelp and TripAdvisor, and, of course, good customer interactions.”