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Who Will Be the Brick-and-Mortar Survivors?

by simon
Who will be the brick-and-mortar survivors that thrive in the next retail age? I write next retail age because the term “retail apocalypse” makes me cringe.

In the first place, “apocalypse” turns a sobering disruption into an existential crisis. Yes, it’s tough out there, but going by the numbers, the end is nowhere nigh for retail.

Secondly, if “apocalypse” means anything, it applies to big retail built for the high-volume foot traffic of the pre-web age. These businesses get a lot of attention because they’ve dominated retail for decades until eCommerce came along. These big chains, department stores, and malls were the apocalypse years ago.

Showrooms will be Brick-and-Mortar Survivors

One perspective is that there won’t be brick-and-mortar survivors in the next retail age. Instead, there will two kinds of retail. According to a Goldman Sachs analyst, it will boil down to retail with vast distribution networks and brick-and-mortar showrooms.

We’re not convinced showrooms will be the only kind of brick-and-mortar survivors in the future. Retailers that connect with their customers personally, provide a great in-store experience, and have a unique proposition will continue to thrive.

That said, showrooms will be big winners, particularly for multi-channel sellers.

Winners Offer the Best of Both Worlds

Showrooms illustrate how brick-and-mortars can offer the best of online and physical retail.

The showroom gives retailers the opportunity to impress and connect with their customers. Furthermore, it gives the customer the chance to see and feel the product in person.

Meanwhile, because showroom purchases happen online, retailers won’t need to carry excess inventory. Thus, they lower their operating costs and streamline fulfillment as they dispatch orders from their warehouse or 3PL. Retail success will not rely on foot traffic and high turnover at the register.

It doesn’t have to be showrooms. However, the retail winners will have a great in-store and online experience. They’ll keep their footprint small, and they’ll optimize their inventory and fulfillment across all their channels.