The Future of Physical Brick-and-Mortar Stores: Glorious Resurrection or Torturous Death?

Bob Nilsson Director, Vertical Solutions Marketing Published 28 Feb 2020

The Shop Around the Corner exacts revenge on Fox Books, with a little help from Amazon

When You’ve Got Mail came out in 1998, the future of every small shop across the country looked dim. Big box stores were eating them for lunch. If you were a neighborhood retailer selling books, hardware, appliances, drugs, home goods or sporting supplies with high-touch personalized service, the large-footprint megastores were successfully luring away your customers with their low prices. Then came online retailing as epitomized by, and the tables began to turn. 

Now it’s Barnes & Noble that is in rapid decline. To stay afloat, they are selling out to hedge fund Elliott Management. K-Mart has gone from 2200 stores in the US in 2000 to less than 200. Meanwhile, small independent book shops are thriving. Turns out many big box stores were only a waystation on the road to lower prices through high-volume, minimum-service sales. That position now belongs to online giants, like

Even today, online retail is still only 11-15% of addressable retail. Given the right circumstances, people enjoy shopping in stores. I cannot think of a vacation when we did not make at least one shopping trip into town, despite perfect weather with the surf up. And on vacation you can do exactly and only what you want.

This liquor store offers classes, events, in-store tastings, and
live-stream events… and of course, in-store high-quality Wi-Fi

To be successful, stores must provide a differentiated shopping experience. Just as you don’t go to a fine restaurant to purchase your groceries, people rarely go to into a store simply to make a purchase. They want advice, suggestions, new decorating ideas; perhaps served up with coffee or wine. Could you imagine ordering sizzling fajitas online? Successful restaurants provide more than food, it’s all about the experience. Successful stores provide more than just products. Shopping can be a chance to see the goods in action carefully prepared for your consideration, and to consult with the experts.

What kinds of experiences can stores provide?

Apple stores have set one example. They provide expert pre-sale advice, product configuration, post-sale assistance, and a genius bar. Here’s how Chris Ryan of Gigaom describes the Apple store experience:

First, the stores have Wi-Fi. That one may seem a little cheesy, but when you’re camped outside at 3AM, it’s nice that a company that, despite all its talk of being energy-efficient and going green, still decided to leave its wireless routers active at night so you can watch Hulu while waiting in line. Second, the stores take care of those who are waiting in line. The two stores I visited had partnered with a local Starbucks and California Pizza Kitchen to provide food and drinks to those who had been waiting — at no expense to customers. How many places do you know do that?

Cafe 1250 serves triple-chocolate brownies, chef salads and roast beef sandwiches — made fresh daily — near new Camrys and Tundras glistening under showroom lights. Not far away is a 700-square-foot pirate ship play area, arcade, and video game room for children. The showroom includes a business center with telephones, free Wi-Fi (of course), and a shuttle to a nearby shopping center. The dealership staffs a barbershop and nail and massage salons a short walk from its service center. A 15-minute chair massage while your tires are rotated costs $15. At the Mercedes-Benz dealer in Burlington, Massachusetts, a cafe and salon provide customers free manicures and hair styling while their cars are in the shop.

Food and beverage in the form of apps (of a difference sort), espresso, wine, and craft beer can be great accompaniments to shopping. Some stores are adding yoga studios and medical clinics.

In-store virtual reality provides an even more immersive shopping experience

Virtual reality studios can expand the meaning of the immersive shopping experience. Ikea, Houzz, Anthropologie, and Williams-Sonoma incorporate augmented reality to enhance their shoppers’ experience. Cosmetics retailer Sephora have introduced an AR mirror, while Macy’s uses smart mirrors in dozens of stores. Macy’s expanded the AR features of its mobile app to let shoppers virtually try on more than 1,000 cosmetics products. Among beauty brands, L’Oréal, Estée Lauder, Maybelline, and others have rolled out AR tools to help customers virtually experiment with products both in stores and at home.

Achieving success at both ends of the retail spectrum

This isn’t to say that the only place brick-and-mortar stores can find success is at the high end of the retail spectrum. Just as there are both luxury and fast food restaurants, “fast shopping” stores can offer frictionless purchasing with automatic checkout ala Amazon Go stores. Emerging technology like electronic shelf labeling can boost sales by automatically adjusting specials based on aisle traffic and shopper dwell time.

What are the most important ingredients for an outstanding shopping experience?

Shoppers are social people, and today everyone wants to be connected. To deliver those connections, the first requirement is a fast, flawless connection via Wi-Fi to the Internet. Lots of things can go wrong here: overall weak signal; strong signal, but only on the access point side; good two-directional Wi-Fi signal, but limited throughput to the Internet. To ensure that the overall Wi-Fi experience is excellent requires network analytics.

A final note: neither online nor in-person sales exist in a vacuum. Both can complement each other. But if you want guests to visit and spend time in your store, make sure you provide them with the best possible experience, and that includes flawless Wi-Fi.

Over half of our store sales involve an online journey, and over a third of our online sales involve a store experience” – Erik Nordstrom

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