The rapid development of e-commerce is having an increasing impact on brick-and-mortars. However, it will not lead to their disappearance from the market, but transformations. Traditional retail outlets, in order to effectively compete with e-shops, will have to not only modify their space and bet on innovations, but also change their role. According to experts’ predictions, shops of the future will resemble showrooms more than brick-and-mortars.
Although e-commerce has boomed recently, it is still being overtaken by traditional retail. According to a study by Edge by Ascential, currently, 30% of retail is done online. By 2025, this percentage is expected to rise to 40%. As you can see, despite the rapid growth of e-commerce, traditional shops will still have a strong position in the near future. This is why it is so important for retailers to apply an omnichannel strategy. Global giants such as Amazon are aware of this. This e-commerce giant is preparing to open brick-and-mortars in the USA.
However, the e-commerce boom is starting to leave its mark on traditional shops. Customers expect a similar experience to what they know online. What is important is the automation and convenience of shopping, often without the need for contact with a cashier. The growing importance of e-commerce and consumers’ desire to receive ordered products as quickly as possible makes central warehouses, usually located far from city centres, less and less efficient.
This is why companies are choosing to dedicate part of the space in their shops to warehouses. From there, products can be delivered to customers faster than from distant central warehouses, even within several minutes. Currently, the battle for customers is largely played out at the ‘last mile’ stage, i.e. the delivery and collection of purchases, and consumer satisfaction with fast order fulfilment helps win the battle. This can be seen in the growing popularity of so-called dark stores, which you can read in our article.
The fact that some shop space is being used for warehousing is to some extent made possible by the miniaturisation of products, which no longer need as much space in shop windows as they did a decade ago. Automation, the introduction of new technological solutions, is also playing its part. For example, the traditional checkout stand can be replaced by up to three self-service checkouts. This “freed up” space in the shop can be used to place other devices, such as infokiosks or tablets, which will affect the customer experience of customers.
To give customers the best possible customer experience, innovative technologies are becoming more common in brick-and-mortars. Canadian company Arc’teryx Equipment, in its flagship shop in Shanghai, has placed experiential spaces such as a “rain room” where customers can try on and test the technical functions of products under the pouring water.
Also in Poland, we have examples of retailers who reach for innovations in their brick-and-mortars. Such a brand is eobuwie.pl, which sells shoes, handbags, accessories and is a leader in the e-commerce industry in Poland. The company has recently opened traditional shops, but the customer will not find shelves with shoes in them. Product selection takes place on a tablet and matching the right size thanks to an electronic foot scanner. A customer advisor delivers the product selected by the technology and also provides advice if necessary.
The shops of the future will be more like showrooms than traditional retail outlets. They will become a place where the consumer can get to know the product, test its function and talk to an advisor. As well as meeting with friends or making new acquaintances. They will also complement each other with e-stores. Consumers are increasingly choosing products online and buying offline, and vice versa. The ROTOPO scheme – Research Online, Test Offline, Purchase Online – will become more and more common.
So it is very clear that the new retail models are putting the customer at the centre and are very much omnichannel-oriented.