Getting physical: How digital companies are embracing bricks-and-mortar stores
Online shopping has been a boon for retailers and shoppers alike. While the absence of bricks-and-mortar stores help companies keep their overheads down, it also means consumers often pay much less for a product than they otherwise would from a city-center outlet. Coupled with the fact that e-commerce equates to 24-hour opening hours, well, there shouldn’t be a lot to complain about.
A knock-on effect, of course, has seen many once-mighty brands close their doors, including Blockbuster, Borders, and HMV. So does this mean that main shopping streets are on a permanent downwards spiral, and we’ll soon only be able to procure our goods on the Web? Well, not so fast. There are many things that can’t quite be replicated by e-tail. For now, at least.
Same-day deliveries & try-before-you-buy
Same-day deliveries may be on the rise in the digital realm, with the UK’s Currys and PC World getting involved, not to mention eBay and Snapdeal too. But same-day deliveries aren’t yet standard, they often come with a premium, and ‘same-day’ isn’t the same as ‘right now’. There’s a lot to be said for walking to your local shop(s) to procure a new book or micro USB cable, and have the item in-hand in less than an hour.
Moreover, some services are simply better suited to physical stores. Companies such as Fits.me may be trying to bridge the virtual/physical divide by replicating the try-before-you-buy ethos on the Web, but it’s not quite the same as perusing your local fashion outlets to see and feel clothes first-hand.
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There are many other scenarios too where physical outlets really begin to demonstrate their worth. And this, perhaps, is why we’re seeing more traditionally digital-focused companies breaking from their roots to forge a presence in towns and cities.
Bridging the divide
Last week, news emerged courtesy of PCR that UK-based electrical retailer Ebuyer.com was considering a move into the physical world. Since launching back in 1999, Ebuyer has emerged as one of the largest independent British e-tailers, with around four million registered customers.
Though it seems like it’s still some way off from actually happening, Managing Director Stuart Carlisle hinted at what’s to come:
“Yes we have considered it [opening physical stores] and once we have found the most effective model for our customer base, we will act upon it. Retail has changed significantly over the last five years and so we are always investigating ways to best meet our customers’ needs. Whether this is through online, High Street or multi-channel retail, the options are there for us to progress.”
While there is a temptation here to view this as one example of how e-commerce isn’t killing off traditional retail outlets, it’s more of an admission that there’s scope for something out in the real world. More…a complementary service rather than a replacement service.
“Online retail will continue to grow,” continues Carlisle. “Simple economics dictate online retailers can usually offer products at better prices – so this is where most of the consumers will go. The High Street will by no means die out, it will just have to adapt. People still want to buy products in store, it’s just clear the current model is not sustainable.”
Though it’s only a temporary endeavor, it’s still interesting to see some of the ideas they have for bringing their digital store into the real world.
Indeed, there’s a screen and headphones with a reel-to-reel setup so visitors can listen to customer testimonies from businesses that use Moo.com’s cards. Then there’s the display on the wall featuring pull-cords and panels, replicating drop-down menus and left-to-right scrolling.
Taking a website and working it out in a physical sense is a playful idea and it works well in a small shop, but this probably won’t work on scale. However, that’s not to say the giants from the online world don’t have one eye on the physical retail pie too.
Amazon Avenue
Launching way back in the early days of the WWW, Amazon is pretty much synonymous with online shopping. It all started with books, but now you can buy just about anything through the company’s myriad of localized e-portals around the world, with giant warehouses serving as product holding-pens.
But could Amazon ever go down the bricks-and-mortar route? And by that we don’t mean selling materials to build yourself a new home.
Rumors have abounded before, and Amazon’s head honcho Jeff Bezos has stated he’d open offline stores if they could find a formula for making it work. The company has been bridging the virtual and physical divide for a while already, however, with Amazon Lockers permeating third-party retailers and public locations in the US and UK.
The premise is simple enough. You’re not at home to take receipt of an Amazon delivery? Have it delivered to a Locker located nearby, and pick it up in person.
For Amazon, it solves some problems and gives them that physical presence out on the street. And for customers, it offers an extra incentive to buy from Amazon. But what about partner retailers? Well, the idea is it will get folk into their shops and buying other things when they collect their goods. Except that’s maybe not how things are panning out.
Back in September, news emerged that US retailers Staples and RadioShack were ditching Amazon Lockers from their stores. The exact reasons weren’t divulged, but it did hint at the inherent disparity between the online world inhabited by Amazon, and the physical sphere occupied by Staples and RadioShack.
The route Amazon is currently trying to venture down makes sense in many ways though, even though Lockers are currently limited in their availability. The online behemoth may have the capital and brand-awareness to launch a bricks-and-mortar offensive if it so desired, but it is very much at odds with its core raison d’être – undercutting the competition with an uber-streamlined, military-like operation. A value-added proposition – through partnering with existing local stores – makes much more sense as opposed to rolling out fully-fledged outlets, as it needs to keep its costs down.
That, however, is not to say Amazon couldn’t launch a handful of flagship stores in key locations around the world. Imagine a giant multi-category emporium in London’s Oxford Circus or New York’s Times Square? It’s certainly feasible, though it’s not necessarily a priority for the company at present.
eBay: High-Street ‘auctions’
Launching around the same time as Amazon in the mid-nineties, eBay is deeply ingrained in the very fabric of e-commerce. But given its historical focus on third-party auctions and fixed-price items, rather than selling eBay-owned goods, bricks-and-mortar stores are perhaps less of an option here. That said, eBay has dabbled with such initiatives in the past.
Timed to coincide with the Christmas rush in 2011, the main caveat with eBay’s temporary pop-up store was there would be no tills, a very limited selection of products and shoppers weren’t allowed to take any of the items away with them. Not your typical shop.
The eBay boutique opened from 1-5 December, and saw 2,500 customers arrive through its doors. Richard Brewer-Hay, a Senior Manager at eBay, called the store “the UK’s first-ever QR code shopping emporium”, with consumers able to browse more than 350 items provided by a selection of the top-rated eBay sellers, with sales completed using mobile devices. So it was more of a concept store – an experiment, perhaps, in what a physical eBay store could look like.
The following Christmas, eBay took to London’s streets again, this time with eBay Social Shopping, an initiative powered entirely by social media. As with their previous exploits, this was timed to coincide with the busiest online shopping weekend, but instead it tapped Facebook, Twitter and Instagram to garner information on product recommendations, and morph it with eBay’s own search data. The upshot of all this, was a live, real-time pulse of what the nation wanted for Christmas.
“By pairing views of social communities with eBay’s own vast selection of top Christmas gifts and mobile expertise, we gave shoppers lots of inspiration and put a little bit of fun into Christmas shopping,” explained Carrie Bienkowski, Head of Buyer Experience at eBay.
“Mobile technology is a catalyst for retail growth and is changing the way we shop,” she added. “Consumers now carry a global showroom in their pocket and are increasingly as inclined to seek recommendations online and shop mobile as visit the high street.”
You can view the official promo skit for yourself here to get an idea of what it entailed, but it gives some ideas on how data can be used to inform in-store sales during busy shopping periods.
Google: Chrome Zone and beyond
Google’s sidling steadily into the hardware realm, with laptops (Chromebooks), smartphones and tablets now part of its arsenal of offerings. And there has been growing speculation in recent times around a possible move into branded retail stores.
Indeed, Google has made at least one small stride into its own bricks-and-mortar store with the Chrome Zone, a dedicated Chromebook retail space at PC World’s Tottenham Court Road branch in London. The store has dedicated staff who have been specifically trained in using and demoing Chromebooks.
And just before Christmas, Google launched temporary pop-up shops to showcase the Chromecast, Chromebooks and Nexus 7, though these were restricted to New York, Chicago, Sacramento, Los Angeles, Washington, DC, and Paramus, New Jersey.
Though Google has yet to launch a full-on retail store, it doesn’t seem beyond the realms of possibility that it could go down that route at some point. Its Android operating system is on more than half of all smartphones, while more and more quality affordable tablets now sport the OS too. Throw into the mix its own Nexus range of phones and tablets, Chromebooks and the associated accessories, then Google retail stores actually seem likely at some juncture.
Microsoft: 63 stores and counting
As with Google, Microsoft was always traditionally a software company. But with its push into hardware and the omnipresence of its desktop operating system on third-party manufacturer’s machines, it’s not difficult to understand why a Microsoft Store makes sense.
Opening in October 2009, Microsoft’s first foray into bricks-and-mortar kicked off in Phoenix, Arizona, eight years after Apple’s own shift into physical outlets. This led to more than sixty additional stores opening across the US and Canada in the four years that followed, though rumors of a move into Europe have yet to materialize.
But with the Xbox One, its own-branded Surface tablets and Nokia’s mobile phone business under its wings, we’ll likely see more Microsoft Stores crop up across North America and beyond.
Samsung Stores: On the rise
Okay, Samsung has never really been an e-commerce company as such, but it did recently announce it was ramping up its sales and marketing efforts by opening more than sixty new dedicated stores across Europe in conjunction with the Carphone Warehouse.
This deal follows the three initial outlets that opened in Spain back in 2013, and now it’s effectively pushing Samsung front-and-center in main shopping thoroughfares across the UK, Ireland, Germany, Spain, Portugal, Sweden and the Netherlands. Though full details have yet to emerge of what form these new outlets will take, we were told that they’ll have a “premium look and feel”, with Samsung-branded tablets used by personnel on the shop floor to complete sales. Very much like an Apple Store, in other words.
This move follows almost two years after Samsung launched a series of temporary pop-up stores for the London Olympics.
Samsung is almost synonymous with Android already, so by pushing its brand out into the wild with dedicated retail outlets, this can only serve to increase its mindshare among the mobile masses.
Getting physical
It has been interesting observing the evolution of commerce over the past two decades. The initial skepticism back in 1995 about whether people would really shop online was slowly replaced with a worried “Oh, can shops survive the e-commerce revolution?” debate a decade or so later. But now we’re seeing interest from some of the major players in the digital space, who are looking to transcend their online heritage and dip their toes into a shopping mall near you.
However, the examples outlined here are certainly not indicative of a reversal in fortunes for bricks-and-mortar stores. It’s more a realization that humans are social creatures – people like to talk to and mingle with other people. Sure, buying a ream of paper or book from a website offers much convenience. But people still want to venture into physical spaces to touch and test things, and ask questions.
To what degree we start seeing the tech titans of the world embrace dedicated retail stores remains to be seen. But there’s clearly an interest there – from corporations and customers. And if a microchip manufacturer such as Intel is even toying with its own outlets, then it’s clear that the big tech brands understand the need for a real-world presence.
