Brick and Mortar stores - Can they compete in the digital age?
Sat, 2012-09-01 17:23 — ashley.desouza
Assignment:
I found this interesting piece (link at the bottom) on How traditional physical stores can leverage the new technologies and innovations to not only survive but also get stronger in this age of online retail.
Much like libraries and museums, the role and function of retailers is changing in this digital age and physical retailers in particular need to re-organize not only their stores but also their interactions with their customers and their suppliers to add value to all stakeholders. In short, develop a new business model. As the article points out "We shop on phones, compare on Google and ask our Twitter friends what they think." With better technology our expectations from retailers have proportionately risen. We want a great shopping experience, we want to browse the whole catalogue and do so in comfort. You might even say we want to be pampered when we go shopping because shopping is supposed to be a 'pick-me-up' activity, something to make us feel good about ourselves.
Back to the serious stuff. The new buzz word in the retail industry is 'multi-channel shopping' or shopping online, on mobile, on kiosk and so on. While it is easy to see how our shopping experience can been enhanced what is less obvious is the multiple interactions we now have with the brands we buy and how they these interactions "add value" to our lives.
The author gives an example of a movie-buff who regularly buys movies from their local supermarket. As this information is now logged on their Customer Loyalty Card the store has access to a whole lot of information about that customer's movie preferences - genres of movies, actors and so on. This treasure trove of information can now be used by the store to tailor their sales and marketing for this customer, or even get more stock of the types of movies their customers most watch.
Extending the discussion on the benefit of data mining and analysis is the topic of predictive analysis - where supermarkets, by analyzing trends on Facebook and Twitter can stock up those products and brands which are in demand or which are a seasonal need.
So far I haven't distinguished between a digital store and a physical store. A digital store can easily leverage technology to organize their resources and get products from their suppliers at any time to better serve their customers. Where does this leave the physical store? Are they close to extinction? The answer is NO, simply because a physical store can provide customers with a more hands-on experience, not just in terms of actually being able to touch a piece of clothing but also interacting with a human sales representative. And we love to have this experience.This is something the digital store cannot offer, at least not yet. The author argues that with a few simple re-organizational steps the physical retailer can replicate the features of the digital store by leveraging its greatest resources i.e. its customers and suppliers and the associated information they posses, to tailor their products to be more relevant and better suited to their customers and be made available across all channels.
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