Ecommerce: Why online retailers are experimenting with brick-and-mortar locations
“There are so many ecommerce retailers who now believe that in order to differentiate themselves and establish better brand relationships with their shoppers, they [need to consider] opening brick-and-mortar stores,” Debbie Hauss, Editor-in-Chief, Retail TouchPoints, said.
According to Advertising Age, 80% of companies have increased digital marketing budgets for 2015. Whether it’s selling products on a website or through a mobile or desktop app, virtual marketing has become the norm.
However, some ecommerce retailers have recently invested in the opening of brick-and-mortar stores in order to stay ahead of the marketing curve and establish better relationships with their customers.
The growing popularity of this omni-channel trend was recently explored by Retail TouchPoints, a digital publication for retail executives, offering content focused on optimizing the customer experience across multiple channels.
At the MarketingSherpa Media Center at IRCE 2015, Daniel Burstein, Director of Editorial Content, MarketingSherpa, interviewed Debbie Hauss on why expanding to brick-and-mortar stores is becoming common for online retailers.
Retailers are trying to use more face-to-face interaction in order to enhance customer experience, and therefore gain a competitive advantage on solely online-based businesses.
Debbie explained that brick-and-mortar and ecommerce purchases are now becoming intertwined. It is desirable to get an in-store experience online, as well as an online experience in-store, which can be a difficult balance to achieve. Opening a physical location also has its difficulties.
“[Retailers] need to go about it in a creative way in a lot of cases, because it’s expensive, time consuming and stressful to go out there and try and open a retail store,” she said.
Debbie lists the following steps online retailers can take to build successful brick-and-mortar stores.
Experimenting with new locations via mobile stores
When looking for a good place to put down roots, location is essential. Retailers need to know where their main customers are located and where their products sell. Trying out different locations is a way to tap into new markets.
Debbie uses Alton Lane, a men’s clothing company, as an example.
“Alton Lane is one company [that] has taken it to the road with Airstream trailers. They are going to be traveling around the country and introducing their brand in specific locations, and it’s going to expand their brand to different groups of customers in different regions,” she said.
This serves multiple purposes: to grow their customer base and gain exposure, as well as to find out which location might be the best to open up a brick-and-mortar store.
Brands such as Alton Lane can utilize their current online client base, as well as their credibility that they’ve already built from their ecommerce sites, in order to bring people out to their physical locations. This gives them the ability to reach customers from various avenues.
Opening pop-up and showroom stores
To complement Alton Lane’s idea to use mobile Airstream trailers to appeal to new markets, many ecommerce companies have begun to utilize pop-up stores in order to explore new concepts and locations, and get more face-to-face interaction for their brand. A pop-up store is a store that is opened at a temporary location for a certain amount of time.
Having mobile point of sale technology and trackable inventory, as well as being able to order and ship to multiple locations, has revolutionized the way companies sell and has made these stores possible.
Debbie also mentions that pop-up stores can be simply showrooming stores, which are shops that allow customers to view and browse through products, but then make their actual purchases online. She gave the example of how Samsung has used this to its advantage to enhance customer experience.
“’Showrooming’ used to be a bad word … and it’s really not. I was remembering several years ago when I went on a store tour in New York City and Samsung had [its] ‘Samsung Experience’ store in the middle of Manhattan,” she said, “Everyone kind of scratched their heads and said … ‘why are they doing this? It’s costing them who knows how much to have this in New York City, and they’re not selling anything from there.’ Basically it was called the ‘Samsung Experience’ because it was about the experience. It’s about trying out the products and having a relationship with that brand.”
Utilizing customer data to create an effective brick-and-mortar location
Having data on customers is essential to being successful in developing a brick-and-mortar strategy. By understanding the customer and their motivations, retailers will be able to provide them with the best possible experience, therefore driving more sales.
Debbie said, “Anytime you’re interacting with a customer — be it via mobile technology, in a pop-up store, driving in your Airstream, online [or] on your tablets — you need to be able to collect and effectively analyze that data so that you know who your best customers are.”
Ecommerce brands who have customer intelligence and increased face-to-face interaction are really differentiating themselves from other brands who operate solely online.
“We hesitate to use the word ‘omni-channel’ anymore because we are all tired of saying it … but that’s what it’s about. It’s about having that consistent customer experience from every touchpoint in the shopper journey,” she said, “These days you don’t know where your shopper is necessarily going to start — on their mobile phone, on their tablet, in your store, on a website, via social media … you need to be able to tap all those channels in order to reach your customers more effectively.”
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