This is the year you should seriously consider developing an online strategy to expand your physical store’s consumer reach. The future of retail will include a multi-channeled approach to sales that includes a physical location as well as online, mobile, social and textual platforms. The days of simply physically being there for your customers is becoming a thing of the past.
There is a battle going on for the hearts and minds of the American consumer. We keep hearing on the nightly news about ever-increasing online sales. This past November, Adobe Analytics reported that shoppers spent a total of $3.54 billion online as of 8 p.m. EST on Black Friday, a 15.6 percent increase over the previous year.
If you delve a bit deeper into the statistics, you’ll find that physical stores remain the foundation of retailing with around 90 percent of all retail sales in the U.S. still being made in brick-and-mortar stores. This figure includes big box stores such as Walmart and the like, but it does indicate consumer preference. According to A.T. Kearney, a global management consulting firm, “95 percent of all retail sales, including online sales, are captured by retailers with a brick-and-mortar presence.”
These statistics imply that brick-and-mortar stores help retailers drive online sales. It’s not just physical sales or just online sales—it’s both. And having an omnichannel approach is the obvious business model in the ever-changing marketplace. The internet had virtually no sales in the 1990s, while billions of dollars can now be spent in a single day, exclusively online. That progression alone should tell you what direction sales are heading.
At this point, you’re saying to yourself, “I’m just a specialty store, how can I compete with Amazon?”
Walmart has 5,400 physical locations in the U.S. that stock around 14,000 SKUs, but it also has an offering of over 4 million products online. Amazon, with its recent purchase of Whole Foods, is moving into brick-and-mortar locations and offers more than 356 million products online. These big retailers see the value of physical locations, and they will continue to transition. What they will probably never do, simply because of their massive size, is become specialty driven.
The one huge advantage the specialty retail store has lies in being owner-operator driven. Many consumers are beginning to notice the boring sameness of the big-box store experience. The big box retailers operate their business focused primarily on selling products with little customer service, and the 20/80 inventory rule is their mantra when it comes to stocking physical inventory.
According to Fox Business, AARP and Kantar Retail, among others, there is a major demographic shift taking
place that will give small specialty retailers an advantage over mega retailers. Baby boomers seek a more personalized, closer-to-home buying experience, and they are the driving force behind the “Small Business Revolution Movement” that continues to shine a spotlight on local businesses that are independently owned.
Don’t discount the advantage that is small businesses’ ability to quickly react to market trends. Small retailers are more nimble in their decision making processes than mega retailers, who have layers of management to oversee decision making. Small businesses generally push “Made in America” products and often recommend alternative, leading-edge products, unlike big retailers who cannot offer this kind of personalized service.
You may not be able to compete price-wise with the big guys, but that doesn’t mean that you shouldn’t familiarize yourself with online sales. Develop a shopping cart and put up products that have MAP protection or products that need your expertise for your customers to be successful. An online presence allows you to reach out to consumers in your back yard, as well as statewide.
Make developing or expanding your online presence this year’s resolution. Spend the time and effort to build a shopping cart of unique or high-tech products that you recommend in your day-to-day customer interaction. The
sooner you do, the sooner you will be learning the necessary skills to survive and flourish in a changing market.
There is still time to make your business into an omnichannel sales platform, but this window of opportunity won’t last forever.