What Ecommerce Growth Means for Brick and Mortar Shops

A friend of mine owns a hardware store, and he has been at it for more than 20 years. The family has held the business for more than that since his father owned the hardware store in a different location for around 25 years.

Markets change and they have always had to adjust, but my friend has never seen shifts like he has seen in the past ten years. No one thought people would want to buy power tools or nails online, because it makes sense that customers would want to put their hands on these products before buying.

Well, just like every single other brick and mortar business owner that assumed this, they were wrong. Some people will indeed purchase hardware online, and the same goes for strange items like cars and clothing – all of which you would assume that customers would want to try out before buying.

Does this spell the death for brick and mortar stores, or is there light at the end of the tunnel? I mean, we all love the idea of walking into a store to test items out, but most often we go back online and buy the same item for cheaper. It’s why people call Best Buy the showroom for Amazon. It’s all rather strange, so let’s take a look at what this growth in ecommerce means for brick and mortar shops.

Brick and Mortar Requires Digital Marketing Integration

Ecommerce vs brick and mortar

Image credits: certified su/ Flickr 

Ecommerce growth means a shift towards the digital world for shopping. Does this necessarily mean that all brick and mortar shops need to entirely convert into online shops? No. Why is this? To start, most companies that have a solid brick and mortar brand are going to find it somewhat difficult to make this drastic change, particularly after spending so much money on the physical locations.

Other ecommerce stores are finding a nice middle ground between digital and in-person stores. For example, many physical stores are finding huge returns by implementing a well thought out store locator, which helps the companies tap into the mobile revolution while keeping around the brick and mortar stores. In fact, 70 percent of smartphone shoppers use a store locator to map their route to the store.

Consolidation and Redefinition is Already Happening

Comparing online sales against in-store sales is useless, because they are both two completely different stores. A better solution for business owners who run both online and brick and mortar shops is to take a step back and redefine what the brick and mortar shop is for. Could the physical shop complement the online store to push more sales through that route? Is it essential for catering to and dominating the local area?

Separate the two, and refrain from comparing overall sales or revenues on particular items sold in each shop. Take a look at what you do well in the physical shops and double down on that. Look at what aspects are clearly only working for the online shop and stop spending money for that area with the physical store.

Who knows? Maybe one item sells well in your physical store while another can’t make a budget online. Examine how your customers respond and use this to locate the proper items to sell in each one.

The Two Will Eventually Merge or Adapt: Neither Will Exist Alone

Ecommerce and brick & mortar shops

Image credits: Jasson Pratt/Flickr

Online and physical shops have a rare opportunity to merge because of the moving trend towards online shopping. In fact, the market is starting to notice some online and physical shops develop strategic mergers to gain the benefits of both an online and local presence.

We are even beginning to see some companies get bought out to round out an online or local presence instead of starting one completely from scratch. Although most experts claim that we will never live in a world without brick and mortar shops, the idea of physical and online shops existing with constant connections to each other makes a lot of sense.

Brick and Mortar Shops Need to Compete Well With Return Policies

A huge reason general customers have decided to shop online is because online return policies are often crippling to return policies you find in a regular store. So, what does this mean for brick and mortar shops? It means that adaptation is the only solution. A physical store needs to figure out a way to make returns both viable and clearly stated in the store so that customers don’t use the shop as a showroom for another online shop.

Pricing Differentials Should Eventually Disappear

The best comparison we have here pertains to the organic foods market, and it’s actually a word of warning to those running ecommerce shops, since the ability to offer huge price cuts to encourage online shopping should eventually disappear.

With organic foods we are seeing that it’s more costly to go organic, but if organic foods continue to overtake the market we should see a shift in pricing so that organic foods are no longer considered unique. This shift pushes the pricing of the organic foods lower since companies make organic food production more efficient and move money away from “traditional” food production processes.

In short, the normalization of the market means that organic food prices will drop if they become the norm. A similar move will happen as ecommerce shops become more mainstream, since the initial benefit of shopping online was to get lower prices. In theory, these huge price cuts will shift away to make way for larger margins, making it a little easier for brick and mortar stores to compete.

Overall, ecommerce works as a wonderful new technology filled with tons of possibilities, but the brick and mortar shop is still hanging around. It would be wise for both sides to learn about the best way to coexist.

Share your comments in the section below if you have any alternative thoughts as to how brick and mortar shops are going to work into this ecommerce world.

Feature image curtsey of Michela Tannoia

Catalin Zorzini

I'm a web design blogger and started this project after spending a few weeks struggling to find out which is the best ecommerce platform for myself. Check out my current top 10 ecommerce site builders.