The biggest change in the retail landscape in the last 15 years has obviously been online buying. In the last 3 to 5 years, the conversation around it has approached a fever pitch. Worried about the “Death of the Mall” and even Main Street mom and pop stores, the International Council of Shopping Centers has lobbied Congress to level the retail playing field by enacting bills, such as the Marketplace Fairness Act, which would enable states to collect sales taxes from online-only retailers. And yet, while entrepreneurs dream of creating untold wealth from starting online outlets for shoes, jackets, eyeglasses, and every other imaginable commodity, the reality is that online purchases are only a small fraction of all retail sales—5 to 10 percent, depending on the source.
The percentage of online buying is growing, but not as quickly as the brick and mortar stores have feared. What smarter retailers are learning is that the best strategy for not losing market share to online-only e-tailers is to incorporate into their stores the best parts of online shopping: instant call-up of product options, like colors and sizes; ordering and delivery services; and price comparisons. Increasingly, retailers are building an “omnichannel” presence in their stores, from in-store touch screens to mobile coupons. Their Twitter and Facebook feeds are integrated into the full shopping experience, making connection points ubiquitous.
For all the worry about “show rooming,” we’re seeing retailers adopt showroom-only stores, where customers can try on an outfit, order it, and wait for it to be delivered, fully tailored. At Arrowstreet, we’re currently working with a client on a prototype for a new curtain and home furnishings showroom. Sales associates browse the displays with customers, work with them to design the perfect window treatment, create the full order, and have it delivered to their doorstep within a couple days. We’re almost ready to reveal the new design for the prototype—check these pages again soon.
We’ve long known retailers that embrace technology while promoting their exemplary in-store service have a leg up on other brands—even Amazon has physical stores now. In 1999, the nearly century old retailer, L.L. Bean, built their first store outside Freeport, Maine, in Tysons Corner, Virginia. Arrowstreet has built over ten new L.L. Bean stores since then, and each has added progressively more channels.
Finding the customer where they are has always been L.L. Bean’s strength as one of the preeminent catalog-based retailers, so the move to physical stores and the internet was in their wheelhouse. For example, by implementing screens of various sizes and wiring the space for technology throughout L.L. Bean’s Mall of America location, customers are able to access the store’s online retail space for further interaction with the brand and its products.
Not long ago, the loss of bookstores and video stores started a panic in the retail world, but the retailers who have adjusted their models to an omnichannel one have not only survived, they have thrived. We should we put the internet in historical perspective: remember what the Interstate highway system, started over 50 years ago, did to Main Streets across the nation? What could be the next big, transformative technology, and how will we adapt?