Brick-and-Mortar stores are facing two big challenges come Black Friday and this year’s highly anticipated holiday shopping season: heavily-armed competition from the web, and the local problem that too many stores are chasing the same customers.
The end-result is that shoppers, becoming increasingly savvy & well-informed, will be doing more cherry picking than impulse buying. As many industry experts are professing, this could be very bad news for many of the nation’s retailers – big and small.
Retail square footage has easily outpaced population growth over the past two decades. An over abundance of retail space means less foot traffic into individual stores and greater pressure to sell more to fewer people.
Add to this mix people’s growing use of the Web – and we have a sea of change coming in how shoppers shop and how stores try to maximize their selling efforts.
The effects of the Web are challenging retailers in 4 specific ways, and each breaks down how this season’s holiday season buying behaviors might play out:
(1) SELECTION: Shoppers now take for granted the concept of access to a plethora of goods. No longer can retailers get away with limited selections.
(2) MINIMIZING PAIN: Shoppers will no longer drive several miles to big-box stores with hopes that the store “might” have what they are looking for. They want it to be easy & they want it NOW!
(3) TRANSPARENT MARKET PRICING: Pricing on everything must be competitive all the time. No longer can retailers enjoy a degree of price opacity to mark this up and that down. The Web has enabled the savvy shopper to plenty of homework in advance, which leads us to the 4th item…
(4) DISCOVERY & BROWSING…has moved to ON-LINE. What this means is that many people already know what they want, and they know where it is located for the best price.
What does this all mean?
It all comes down to the changing consumer behavior – understand their evolving needs, staying properly connected and meeting their every whim.
Although today, 20 years since the very first on-line order was placed for a Sting Compact Disc (hey dad, what’s a compact disk?), on-line sales account for only 7% of all retail sales…the ecommerce shift has been strong and steady, while retail has been shrinking and fragmented.
“We want it easy & we want it now” is the new norm. Walgreens EVP for Supply Chain recently stated @ a Chicago Supply Chain Summit, “we must recognize this changing behavior and be laser-focused on delivering a seamless experience across all channels…staying relevant to the customer’s ‘convenience’ needs”.
Walgreens, like many other retailers, are now at a cross roads that many in the industry are calling “Omni-Channel Marketing”. That is, the proper blending of the ecommerce and retail worlds - to make shopping as “frictionless” as possible for today’s consumer.
The most successful retailers, like Walgreens, are already investing heavily in creating a better customer experience so that their visit, whenever it may, is more distinct and memorable.
The bottom-line: Brick-and mortar stores are not going away anytime soon, HOWEVER, those store-based chains offering multi-channel options to its customers will be far better armed to succeed come this Black Friday…and all future “Fridays”.
Happy Thanksgiving...and Happy Shopping!
Next up…Omni-Channel Marketing and supply chain challenges with ecommerce fulfillment.