There are a number articles that talk about the impending doom of retail stores often citing examples such as Best Buy and Sears. However, data actually show us that over 90% of retail sales still take place in-store. Don’t get me wrong, e-commerce is still growing at a significant rate, 15.5% in 2014 according to eMarketer, but it is clear that brick and mortar (BAM) stores aren’t going to become extinct anytime soon. What will happen, I believe, is that the fundamentals of the retail experience will shift drastically as the lines blur between offline and online commerce.
For example, Walmart’s innovation group @WalmartLabs announced yesterday that it had acquired Luvocracy, an online social community for product discovery and recommendations (similar to Wanelo, Pinterest, etc.). This deal, along with Stylr and Adchemy marks their third e-commerce acquisition this year alone. For a company that only did ~2% of its sales online, Walmart seems to understand and recognize the importance of integrating e-commerce tools into its existing arsenal.
So what does this mean for others? BAM stores will need to be experimental and omnipresent, accessible at every channel such as mobile devices, desktop computers, and in-person. Below is a short list of themes and example companies that retailers can use to enhance the retail experience.
- In-store engagement — In a recent Business Intelligence report on The Future of Retail, 60% of survey respondents indicated that the retail experiences are still lacking in personalization. The “in-store engagement” category is broad with startups such as Swirl and ShopKick that enable high-touch engagement and tailored content (e.g. coupons, offers) to each person.
- Mobile coupons — With mobile coupon usage expected to double by 2019, merchants need to be aware of this potentially massive distribution channel. Startups such as Yowza, Wrapp, and ScoutMob provide an easy way for shoppers to find, store, and redeem coupons based on location.
- Search and local availability — Remember how focused the National Retail Federation was on “showrooming”, the practice of looking at a product in-stores only to purchase it online? Now it’s all about “webrooming”, the inverse practice of doing research online but transacting in-store. Companies such as thefind and Boutiika work with merchants to attract online shoppers to BAM locations through location based product searches, determining availability at the SKU level.
Of course this list isn’t exhaustive, but it should give you an idea of technologies that can be used to address some of the current macro trends. At Venture Scanner I am tracking over 450 companies across 18 categories in the retail online to offline sector, check it out here!