Anyone who’s spent any time in the retail sector knows that the landscape is constantly changing. What was cutting edge last year is old hat this year. That’s particularly true for brick and mortar retailers. The rise of e-commerce has forced real world retailers to reassess their business models and find new ways to connect with customers. Frankly, brick and mortar retailers have had to roll with more than a few punches over the last couple of decades.
Successful merchants have learned how to keep ahead of the curve by keeping a watchful eye on emerging trends. They’ve survived, and often thrived, by finding new ways to respond the needs and desires of consumers. It’s certainly been challenging at times. But who ever said retail was going to be easy?
Brick and mortar businesses are still the predominant force in US retail, and that’s not going to change any time soon. But the landscape is shifting again, and now is a good time to talk about a few of the trends that will no doubt shape the future of brick and mortar retail moving froward.
Retailers Will Shift to Selling Experiences
Consumers have always been driven by cost and convenience. For decades brick and mortar retailers have been able to leverage those twin motivators to grow, retain, and renew their customer base. But with the rise of ecommerce traditional retailers have had to struggle to compete with the ease and affordability of online shopping.
Today’s consumers are looking for something different from brick and mortar retailers. Something they can’t get online. Cost and convenience certainly have their place, but customers will happily trade both for a memorable shopping experience. Retail success in 2019 and beyond will be defined by relationship building and offering customers the kind of unique experiences that will keep them coming back for more.
Of course, finding the right customer experience strategy largely depends on your product and your targeted customer base. The key is responding to your customers’ needs and desires. If you can tap into what interests them you can tailor a shopping experience that will set you apart from the competition.
To give you a better idea of what customers want in a shopping experience consider the following examples:
- Face to Face Customer Service – ensuring your staff is friendly and knowledgeable
- Community Events – treasure hunts, contests, etc
- Product Tutorials – special classes and guest lectures
- Entertainment – in-store special attractions and entertainers
Small Format Stores Will Take Center Stage
E-commerce currently accounts for between 15% and 20% of all retail sales, depending on which metric you follow. That’s a relatively small piece of the pie, and it’s proof positive that the brick and mortar shopping experience continues to appeal to consumers. Still, it’s impossible to ignore the impact online sales have had on the general retail landscape.
Customers have gotten used to the convenience of online shopping, and advances in supply chains have made it easier for online retailers to process and fulfill orders quickly and efficiently. That’s had the most significant impact on brick and mortar retail. It simply no longer makes sense for real world retailers to maintain larger than life stores that, by their very nature, must keep an endless supply of stock on hand to satisfy the needs of every potential customer.
The future of real world retail is smaller format shops specializing in curated products and/or offering unique services to the public. By narrowing your retail focus you can carve out a niche in which your business can flourish. A carefully curated product line, combined with exceptional customer service, will be key to establishing a thriving brick and mortar enterprise.
Facebook Messenger Will Bring a New Twist to Customer Relations
For years business owners have been told that they need to have an online presence to be successful. Even if you don’t actually sell your products online, your website and social media accounts help to drive traffic to your doors. It’s true. It works. And it will continue to be an important part of your business model in the future.
Which brings us to Facebook Messenger. Facebook, and other social media outlets, have always been a great way for businesses to interact with their customers. But moving forward they will take on an even greater significance.
Recent polling has shown that 53% of consumers prefer to do business with companies they can message directly through Facebook. That direct line of communication appeals to customers, and it allows them to conduct business on their own schedule. Engaging with your customers via Facebook Messenger allows you to:
- quickly answer questions about key products
- promote new and upcoming product lines
- accept orders for merchandise
- resolve any issues customers may have had with recent purchases
Even if your brick and mortar establishment doesn’t have an online retail division Facebook Messenger can be an extremely valuable tool in promoting and improving customer relations. It can also be an easy and inexpensive way to develop an online sales presence that can supplement your brick and mortar sales.
The Threat of Tariffs Will Keep Retailers on Their Toes
The US retail sector is currently basking in the glow of a strong economy. Sales are up, profits are good, and the future looks bright. However, there are some potential storm clouds on the horizon and American retailers need to be aware of potential dangers down the road.
The threat of impending tariffs on a variety of imports has many economists and analysts concerned. The US economy may be flourishing now, but these tariffs have the potential to put retailers behind the 8 ball once again. This is particularly true for brick and mortar retailers who already have higher overhead costs than their e-commerce counterparts. If these tariffs go into full effect we can expect to see an increase in the cost of raw materials and finished products from several key markets and will surely cut into many retailers bottom line.
Now is the time for retailers to take stock of their product lines and reassess their supply chain. You may find you need to diversify your list of vendors, sourcing some of your merchandise from companies who will not be affected by any tariffs. If products or materials can be sourced from US vendors all the better. The key here is to be proactive. Don’t wait to see if the tariffs impact your business. Take the necessary steps now to minimize any potential impact.
The Bottom Line
Brick and mortar remains the cornerstone of the US retail market. However, changes in customer expectations, largely informed by the online shopping experience, have forced real world retailers to adapt to changing marketplace. The future of traditional retail does look bright, although there will certainly be some bumps in the road ahead.
We’ve tried to look at a few of the upcoming trends that will shape the future of brick and mortar retail. You will have noticed a shining thread that runs through all of them. Customer service. While the shape of retail is always in flux, building strong customer relationships continues to be the foundation of success. Whether online or in the real world, continuing to meet and exceed customer expectations is where the future of retail truly lies.