In the never-ending struggle between online and physical stores, bricks and mortar establishments are fighting back against their competitors in cyberspace by providing local pick-up points, payments pods and (only in America!) drive-through customer service centres. Martyn Warwick reports.
So many people now routinely buy goods and services online that you might expect many bricks and mortar businesses to be deserted and struggling. Well, many of them are indeed struggling but few are actually deserted. Why? Because shoppers tend to visit their premises to size up, compare and and try-out products in-store, then depart and buy cheaper over the Internet. It's called "showrooming" and it's making retailers see red.
There are various ways to minimise the impact of "showrooming" but, by and large, they are defensive and negative tactics, such as changing bar code conventions so that goods and products cannot the scanned and compared later online. This regime isn't working too well; consumers simply up-sticks and wander off to another shop where they can make comparisons and then never return to the one thy abandoned.
That's why some rather more prescient US-headquartered retail organisations such as Best Buy, Macy's, Sears and Walmart are transforming their shops into physical extensions of their online operations by providing customers with facilities such as drop-off points that allow consumers to return goods that they have bought online but which turn out to be unsuitable of faulty. Other facilities include free in-store shipping and postage services, snazzy new pickup points and payment pods, and even (only in America) drive-through customer service centres.
Joel Anderson, the CEO of Walmart.com in the US is pragmatic about changing trends. He says, “We are living in the age of the customer, and you can either fight these trends that are happening, showrooming is one, or you can embrace them. We have a lot of assets, but they’re only assets if you embrace the trends of the customers.”
For Walmart, as part of an ongoing determination to play online retailers at their own game, it means providing handy physical sites when consumers can pick up or drop off purchases before work, over the lunch break or during the school run. The aim is to prove that having a bricks and mortar presence has many advantages.
Walmart says one of the big plus points for its operations is that people can pay cash.
Credit card use is markedly different between Europe, the UK and North America and card payment technology is often more rather advanced on this side of the Atlantic with consumers widely socialised into using credit and debit cards (an increasing number of which are now contactless) to pay for all sorts of routine daily needs such as travel tickets, coffee, snacks, dry cleaning etc. The same capabilities are provided in some parts of North America but they are not yet as widely available as they are in, say, London or Berlin.
Walmart is fighting its corner against the online retailers by allowing customers to shop and buy online and then pay in cash and pick up their goods from their nearest physical store. That facility has been available for only a couple of months but, since 2006, Walmart has been allowing consumers to pick-up online purchases from their stores and so save shipping and postage costs. Consumers like it and today more than 50 per cent of all purchases made from Walmart.com are picked up from Walmart stores.
Other retailers, such as Sears, say that brick and mortar premises win out over cyberspace because they can and do provide a "same-day" delivery and return service. What's more, online purchases picked up in a real store are usually pretty hefty items and quite expensive and research by Sears has found that consumers who do visit stores to take collection of a purchase also spend time strolling around the shop aisles and make more purchases.
Meanwhile, Macy's has integrated the ranges of physical and online goods it has on offer, which means that an item of stock from any of 292 of Macy's bricks and mortar outlets can be despatched to an online customer.
That's the upside for the physical shops. However, a pendulum swings two ways and online stores are now partnering with proper shops and shipping their goods to real premises where customers can pick up their purchases. What's more, analysts covering the retail sector say it is now just a matter of time before online stores open their own bricks and mortar emporia.
And so we go full circle as the wheel trundles on round, and round, and round...
please sign in to rate this article