• E-tailers won’t be able to push brick-and-mortar businesses towards irrelevance

    In recent years, showrooming — the consumer looking up products at a store and then buying them online at discounted prices — has become a trend, a cause of concern for most retailers, particularly those dealing in electronic goods.

    Some store owners view this as an unfair practice, one that may hurt their profits. While it is true that online stores, or e-tailers, can afford to sell products at discounted prices — as their infrastructure costs are only a fraction of what retail stores incur — it’s unlikely that the e-tailers will push the brick-and-mortar businesses towards irrelevance.

    On the contrary, showrooming might just be the shake-up the retail industry needs to explore. This phenomenon is quite prevalent in the US market. It is evident that consumers, even today, see value in checking out products for themselves before they buy online. If their experience at the store is good enough, they are likely to be influenced to make a purchase. Retail stores provide value to the customers.

    People would most definitely miss the in-store experience if they ceased to exist. And the absence of these stores would affect the product manufacturers who depend on brick-and-mortar retailers to showcase their products to consumers. Without these stores, these manufacturers would have to set up their own stores, a very expensive proposition.

    This is an important fact, and it would only be reasonable for retailers to charge manufacturers a fee in return for showcasing their products and offering consumers the chance to experience them first-hand. If this pay-forspace system were to be established, stores could even match the online prices for certain product categories and brands.

    Brands can use this model to their advantage and showcase their latest, best and most innovative products in-store. Alternatively, they can create mini stores within the store to augment the brand experience. Both the options help them create and offer in-store experiences for consumers that the online stores cannot offer.

    This new retail model could effectively shift the focus from sales to shopping experience. From a manufacturer’s standpoint, it doesn’t really matter whether sales happen offline or online. The important thing is that the brands and products are visible and accessible to consumers. When the world’s largest online retailers started offering huge discounts on all categories of products, their success emboldened others to follow suit, across markets in the world. However, it has now become apparent that this model is not sustainable.

    The focus of these e-tailers is gradually shifting towards building trust and offering greater convenience to consumers via delivery and reverse logistic services. As things stand now, such online stores are not necessarily the lowest price points to find a product any more and we can see this in many markets, including the US.

    It is important to note that price is not the only consideration when people buy products. They appreciate guidance in making an informed choice, prefer to experience the product before buying, and expect good service, both before and after sales. All of this is possible in the physical realm, much more so than it is online. Physical presence has other benefits too.

    Unlike online retailers, who need to set up warehouses at a significant additional cost, offline stores can double as demand fulfilment centres. In fact, brick-and-mortar stores can serve as an excellent means for e-tailers to tap into the ‘hyperlocal’ market opportunity. It could be a win-win situation for both if the businesses were integrated at necessary levels.

    Online and offline are merely two facets of the retail business: conflicting yet complementary. Brick-andmortar stores can always choose to create a seamless online extension. In-store showcasing of products can lead to an experience that will help attract the consumer towards purchasing the products. Consumer experience is of utmost importance and can be a primary factor driving sales. Robin Yount Authentic Jersey

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