The way we talk now about events, habits, behaviours, circumstances, life – no matter the topic, we are describing it as either “pre-COVID” or “post-COVID.” It’s like a mandatory disclaimer that everyone is attaching to everything. And reasonably so. A lot has changed, and clarifications are needed as we are trying to speculate what the future might look like. There is this movement, though, observed and well-studied just before we went into the lockdown, which is now shaping up to be a trend with a foot on the gas on our journey of discovering the “new normal” of our everyday lives. It’s the evolving relation between brick and mortar stores and e-commerce, and how it’s increasingly steering businesses to adopt a brick and click model.
Prior to the COVID health scare entering centre stage, we had almost jumped to the conclusion too quickly that physical stores were slowly disappearing amidst massive big chain store closures we all witnessed in recent years in Canada. Because we recorded the acceleration of online shopping and digital advancements at the same time, it was easy to make the connection and put the blame on that. While e-commerce sales continue to show unstoppable growth, they were, however, only accounting for 3.2% of total retail trade in August of 2019 in Canada, and 5.5% in the COVID summer of 2020.
Without a doubt, brick and mortar retailers still own this market, but as we said, the change we’ve been experiencing is transforming them into brick and click model operations. So, it’s not that the two worlds work against each other – instead, they come together. Many other factors had to do with putting those stores out of business back then; not adapting fast enough to all digital trends may have been just a small piece of the puzzle.
A Positive Story – Right This Way!
Heading to the malls or popular shopping areas to browse window displays is not necessarily how we plan our shopping trips today; first, we go online and do some browsing there. In fact, the Retail Council of Canada reports that digital content can influence up to 90% of our purchasing decisions, which points to the complex ways of getting to and winning the modern consumer. However, as the Council goes on to explain, in-store shopping still remains the preferred way to shop in Canada. Furthermore, just south of the border, Forrester Research estimates that by 2022, e-commerce sales in the US will account for 17% of the total retail sales, while 41% of in-store purchases will actually be influenced digitally! That’s the catch: that is when brick and mortar becomes click and mortar, and the race for seamless consumer experience at their every touchpoint begins.
It’s a good change, friends, and this is a positive story. We are inspired to convince you that the new trend brings a lot of opportunities. We promise to show you how a store-front business can absorb all the advantages of brick and click, and erase any fears of having to display the “out of business” sign.
What is a “Brick and Click Model”?
First things first, let us explain this new word in our dictionary: Brick and Click, or Click and Mortar, or Click and Brick, or any other variation of it. The term refers to a business model that pretty much comes down to buying with a click (online) and collecting in-store (or curbside). Leaving an option for the consumer to browse your website online via any device, place an order through those channels (or even by calling you), and then have it either shipped to their home or to the brick and mortar location of your business where they can pick it up, adds tremendous value to the user experience that results in more retail sales.
The brick and click model directly combats all the reasons customers have to dislike in-store shopping, like crowded places, long line-ups, inconvenient hours, not enough available staff to assist, or simply not having a physical location near them. And during the time of the pandemic, safety reasons are becoming atop of people’s minds.
While numerous statistics show that customers would rather shop in-store, they are now used to all the convenience that comes with digitization and online shopping. More and more customers are demonstrating the “I want what I want when it want it” mentality that Dr. Kit Yarrow identifies as “IWWIWWIWI” in the book “Decoding the New Customer Mind”. Enabled by technology and e-commerce, your customers are now looking for instant gratification and expecting on-demand, same-day order fulfilment, and quick delivery of whatever they might be after, so brick and mortar retailers’ task would be to create that same harmonious shopping experience in their physical stores.
We’d like to underline that such user experience is a must for both offline and online parts of your operation, synced in to the detail. The shopper of today is always on the move; time is limited, things are always a mobile search away, and with the abundance of product, they will go for the most convenient, fastest, stress-free, best-priced quality product with flawless service, wherever they are and whenever they need it. Don’t think twice if you should transform your enterprise into brick and click business – remember, a competitive store may be just a search away.
E-commerce is not a Threat – No Need to Panic!
As we said before, it seems to be a mixed bag of factors that caused those chains of brick and mortar stores to close their doors in Canada. We cannot just say that everything is moving to pure online shopping; facts can speak to it. For example, the notable rise of specialty stores is one of them. Those are the stores that primarily focus on one type of product, allowing for unique selections—candle shops, art supplies stores, shops that only sell socks, to name a few. Moreover, all these technological innovations not only dispatched us to the digital way of living but also erased some products along the way: recall traditional photo cameras? Now that almost all of us have high-quality cameras on our smartphones, and sharing pictures online is what we like, it is understandable that there is not much of a demand left for photo stores.
Add to that the fact that our tastes have simply changed; the demographics have shifted. We have a quite different Canadian society makeup where a tech-savvy generation, Millennials, are becoming the dominating purchasing power. Also, some will even argue that it is quite possible that we built too much of the retail real estate in this country, where 94 square meters per 100 people reads as very high in comparison to 44 square meters in the UK, or 22 in Germany. It is safe to say that there is no need to panic, e-commerce is not taking over the world (yet), but without accepting it as a game-changer, your business will miss out. The brick and click model appears to be just the right next step for in-store only operations and, vice versa, for pure-play e-tailers.
Learn from the Best – Put Consumer Experience in Focus
Well, take it from the leader who largely shaped the online shopping the way we know it today – Amazon. In the world of purchasing everything and anything over the internet, this e-commerce pioneer created the ultimate convenience and frictionless experience for customers. But now they are tapping into the brick and mortar business? Hmm, they are onto something here, we can be sure of that. With their recent acquisition of the Whole Foods chain of stores, they are reconfirming that the in-store experience still has some advantage over online, at least for grocery shopping. Physical store is a place where shoppers can interact with products, and get real humans to help them better fulfill their needs. Recognizing what consumers expect to experience in-store as an important component of improving their purchasing journey urged some online retailers to try recreating the same experience on their internet-powered setups.
For example, through Augmented Reality (AR) apps, shoppers can now virtually try on makeup, and see what looks best against their faces and skin tones, making it easier to pick just the right shade of lipstick! Also, they can virtually place home furnishings and décor into their homes and get a pretty good idea of how the new items would work with the rest of their interior, and if the new pieces would actually fit, which is very helpful to see before buying. Amazon, among other big brands, has been adopting this approach, but their expansion does not stop there. They also offer web services, video and music streaming, and have you heard of Alexa? Yep – they make it!
Amazon went beyond transforming from an e-marketplace to a click and mortar operation; it’s like they created an entire universe with the consumer experience in the center and everything else revolving around it.
Bricks that Implemented Clicks
Going back to brick and click model, it’s worth reviewing some big-box chains of stores who had done it successfully before brick and click was even a term. The Home Depot and other home improvement businesses, or IKEA, a popular Swedish brand known for assemble-your-own furniture, have essentially designed their stores as warehouse facilities to better comply with consumer behaviour. Selecting items through their websites and going to their stores to pick them up has worked very well for them for years.
Also, at their locations, shoppers can select items from the curated in-store samples just the same way, place an order with the list of selected items in hand, and have it delivered to their homes. Store employees, or better yet, warehouse employees, will follow the list, take the items off the shelves and prepare them for the delivery. Alternatively, shoppers can opt to collect and handle the items themselves and take them home right away. Being able to choose from all these different options is what matters to consumers today. The ambition to deliver best customer experience goes beyond that: these stores have also added relevant useful services like restaurants and rental services as perks at their locations.
Augmented Reality Apps are not Only for Online Experience
Fashion retail is a great example of utilizing augmented reality apps to enhance the visitor experience in-store, not only online. One can point their camera at the mannequin, which comes alive inside the app, starts walking and swirling around just like a runway model. This way, shoppers can really get a better sense of those pieces of clothing when worn, and should they like it, the app will guide them further to make the purchase right there. Another example of an AR app takes the role of a virtual assistant that suggests product information and items on sale while the user walks around the store with the mobile phone in hand.
It’s impressive, isn’t it! The lines of in-store and pure online retail are blurring, industries are overlapping, and possibilities seem endless. And all for one goal; providing a one-of-a-kind, best in class customer experience. A business that can provide the most exciting, the most memorable time at their stores, wins.
If we remember the starting point of this article, all these examples are just proving that traditional retail is not disappearing, it is not being replaced; it is, in fact, more alive than ever before. Okay, minus the coronavirus situation. But that will end eventually, too. Let’s not reduce our quest to the mere observation of what others are doing, and put some real numbers to it. After all, the curiosity about the bold change overtaking the retail has prompted researches to be deployed and measures to be taken. And that is how we learned about The Halo Effect study.
In late 2018, the International Council of Shopping Centers (ICSC) has conducted this substantial research to better understand if and how brick and mortar stores impact their own web traffic and online sales. They measured this by establishing a few metrics: the brand awareness score, how the consumers perceive the brand, are they willing to purchase from the brand, do consumers identify themselves with the values the brand stands for, and would they be willing to recommend the brand to others. To prove that brick and click model is the key differentiator in today’s retail world and an absolute owner of the future, it’s our pleasure to report that they concluded that the physical stores not only directly influence the engagement on their online channels and high ranking of their brands, but the costs needed to acquire new customers are actually lower in this traditional environment than they are online!
The Connection Between Bricks and Clicks Getting Tighter
The Halo Effect paper also states that opening one new physical location of an established brand results in a 36 percent increase in the brand’s website traffic. That number goes up to 45 percent for new brands, those younger than ten years. And when the store closes, the effect is opposite; the more stores close in the market, the sharper the decline in their web traffic in those markets. We can comfortably say that physical stores serve as permanent advertisements, daily reminders for the customers on the move – but it’s more than that. Beside building brand awareness, traditional stores offer physical interaction that is impossible to replicate online other than virtually of course, which, as we said before, can still be a valid effort for some businesses. But the fact is, the majority of purchases either happen in-store or are in-store driven.
The study further records that markets with physical stores report 53 percent of shoppers buying exclusively in-store and 31 percent in combination with online. That, summing up to 84 percent, leaves only 16 percent for pure online purchases. These findings also apply to Millennials who are naturally inclined to turn to the internet for anything, and definitely for online shopping. However, if physical stores are present, most of the younger generation will shop at those stores as well as their websites.
Google ran their own research and came to the same conclusion: 61 percent of shoppers said they would rather buy from the brands that have brick and mortar stores than those with online operation only. In addition to that, the research claims that mobile searches for local information such as “can I/to buy” and “near me” have increased over 6 times in the last two years.
These are all ground-breaking, hard-to-ignore findings that any retailer needs to consider. Is it more important to have a few stores and a website platform, or run an online store full force but have a physical warehouse type of location? Or, does it make sense to provide that in-store experience that delivers marginal revenue but contributes greatly to the overall sales, including the digital side? So many questions, so much to take in and review deeper when making important business decisions, but it’s safe to say that creating an omnichannel environment of your retail establishment is the logical first step, a foundation. Brick and click model, or click and mortar for that matter, is what follows next.
Plan to Provide the Ultimate Convenience
Now that we have covered the advantages of brick and click model, it’s time to adjust business plans and see what can be done to improve the customer experience. No matter what channel they choose to get in touch with you, the name of the game is providing the ultimate convenience. When going for seamless shopping, in-store operations need to tackle a few of those problematic areas.
Smart POS terminals like Clover Mini and Clover Flex also double as web-based, app-enabled, all-in-one management tools, and can assist with the easy and simple creation of loyalty programs and gift cards for your store. More importantly, they can speed up the checkout line significantly. Because they have a built-in barcode scanner, receipt printer and serve as cash registers while accepting any type of payment, you can create an additional line-up for faster checkouts anywhere in the store.
During the forceful reorganization due to pandemic, our merchants praised Clover POS, particularly for the added benefits of processing payments virtually and enabling online ordering with a quick and simple online menu setup. By being able to switch to curbside pick-up or delivery quickly, they never really had to close their doors. Adding a shopping cart to your website for online purchases has also never been easier; if you go for a plug and play solution, you can open your online store overnight, which, if you need it to be, can be integrated with Clover as well. All of this is the convenience your customer is expecting. For your business, this is a sure formula to boost your revenue, and quite frankly, a necessary safety net that works in any emergency.
Due to the fact that the retail world as we know it has dramatically changed and keeps evolving, it’s imperative that brick and click retailers pay close attention to acquiring the best talent to create the winning teams. Sometimes, new business strategies will require retraining, or hiring people with different skills, or maybe searching for employees in non-traditional places to offer more solution-oriented interactions with customers. For example, even though you have a brick and mortar store, all of a sudden, you may need to hire a Web Developer or a Digital Marketing Manager. Some even predict that one of the retail trends will see more hiring from older generations who know the sales floor the best. It makes sense; back then, there was no other retail. Of course, they’d be the experts!
Less Friction, More Customers
“Frictionless experience” is the term that keeps popping up in all these studies and reports, and it suggests the significance of being there for your customer, no matter the channel. To deliver that, to know that you are on the right track and following the change we talked about, as you go on to adjust your operation, always ask yourself if the customer will see your store to be worth the trip. Are your store products easy to find, and do you have them in stock?
Let your store be your best asset to grow your overall business; think of the ways you can entertain the walk-ins and spark their emotions because that will strengthen your brand and promote your website. The integrated approach of creating unique, positive experiences digitally and in-store is what amounts to a success story of a well implemented brick and click model, the one to follow.
In particular, small businesses were hit the hardest with the spread of the COVID-19 crisis that caught everyone off guard. But you know what they say; what doesn’t break you, makes you stronger. We definitely learned to pivot, didn’t we? There was no choice! We diversified, and we are already moving our economy forward. Collectively, we’ve done so much to mitigate the public health threats, and we figured out how to set our businesses to succeed during the emergencies; there is every reason to believe that the future is bright for store-front businesses. Afterall, lockdown only proved that we missed our favourite stores and places so much that we hurried back once the restrictions were lifted. Better days for brick and mortar establishments are on the horizon, as long as they let their customers click, click, click away.
To help you modernize and expand your payment processing solutions, we are here for you.
Ozrenka (Olja) Blagojevic, Marketing Communications Specialist at MONEXgroup
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