The Advantages of Brick and Mortar
Five Ways Physical Stores Are Staying Competitive Against Goliath Sellers
Although online sellers have made the marketplace intensely competitive for physical stores, the traditional brick-and-mortar shop has a number of competitive advantages. Playing to them can help ensure a thriving business.
Major media is abuzz with the trend. As a recent article in The New York Times noted, “An age of online shopping has, surprisingly, led to an exciting time for shoppers to get back out onto city streets to explore new, innovative shops…. Rather than crushing physical stores, the rise of online shopping is, in many cases, encouraging the development of new and innovative retail shops. Companies of all sizes that once sold primarily through multibrand retailers are building on their experience running online stores by opening direct-to-consumer brick-and-mortar locations. Established retailers are shifting their focus from basic transactions to offering compelling brand experiences and higher levels of personal service.” (“Clicks to Bricks: Online Retailers Find the Lure of a Store,” November 10, 2016.)
This progression doesn’t surprise Tom Shay, principal of the Profits Plus Solutions small-business advisory firm and a recent presenter of a seminar titled “Selling Value Is Winning Back Customers” at the 2016 SEMA Show. He believes that existing brick-and-mortar aftermarket stores already have tremendous potential to take advantage of the changing times and reclaim customers in the increasingly competitive retail market.
“Even Amazon is doing the boutique brick-and-mortar, [but] this also plays to our advantage,” Shay explained. “The boutique is generally very small and can’t have all the stuff we offer. The boutique is opened by someone who has never been brick-and-mortar, so they have a lot to learn.”
Shay started by recognizing the enormous value an independent retail store brings to a local community.
“Only $.06 of every $1 spent at a big box retailer stays in the community,” he pointed out. For a chain store, that figure rises to $.20. By contrast, research has shown that every $1 spent with a sole proprietorship keeps $.60 circulating in the community, with every $1 spent at an independent retailer circulating an incredible six to 15 times before leaving the community.
More importantly, said Shay, Gallup surveys indicate that Americans place confidence in small businesses over large corporations by a 3:1 ratio, and recent research by the National Federation of Independent Business and American Express found that 94% of respondents said that shopping at a small business makes them feel good.
According to Shay, if you’re a mom-and-pop outlet, you can “sell value in being a local independent business to keep people away from big-box, online and chain competitors.” It’s just a matter of leveraging your advantages and asking what you can do that the competition will not or cannot. What can you offer that other retailers—and especially the big online sellers—have difficulty offering? The following are just a few of the advantages that a brick-and-mortar retailer can build on.
Advantage 1: Local Attraction
To paraphrase an old saying, the first three advantages of retailing are location, location, location. Brick-and-mortar stores are uniquely positioned to reap the traffic associated with specific destinations or shopping patterns around them. In short, a location and the sense of community surrounding a store is its branding. Convenience is key. Studies show that 65% of shoppers actually prefer purchasing at a local retailer if an item is available in both a nearby store and online. They may start the buying process by researching and comparing products and pricing online, but they will complete their purchases at a brick-and-mortar location, especially if it’s clean, friendly, attractive and, most of all, convenient.
As Shay advised, “Make local work to your advantage.” Gaining good old-fashioned local word of mouth is one of your best available marketing tools. Do it by being the “eyes on the ground” as opposed to the “data in the clouds.” Understand your customers and look after them. Make your store stand out as a visible, accessible fixture in your community. Make it a convenient, comfortable gathering place for enthusiasts. Target your products and services to local interests and support local activities.
“Customers want to do business with a local business,” Shay emphasized. “They want the experience to be like the television show ‘Cheers.’ Unfortunately, we clutter that relationship with a lot of rules for our customers that we have created to stop the customer who is trying to ‘beat us out of something,’ like returning a tool
By their very nature, brick-and-mortar businesses invite trust and ongoing customer relationships. Having a well-outlined customer follow-up program and the staff to carry it out should be a key advertising budget item.
Advantage 2: The Showroom
There’s a reason that online sellers such as Amazon are experimenting with brick-and-mortar outlets, and it’s the showroom. Consumers still prefer real stores by a wide margin, with a recent Timetrade Report finding that 87% said they plan to shop in physical stores this year. Moreover, 85% said that they like to touch and feel things. A successful retail space is more than a well-stocked place to buy things off a shelf; it’s literally a showcase that encourages browsing and discovery.
“Be more than just another shop,” advised Shay. “Be pretty from the street. Create a great shopping atmosphere.”
He further recommended taking a trip to the local mall for a lesson in the effective display tactics of mainstream businesses.
“When I talk with retailers about being unique, I suggest that they spend time looking at a mall and seeing those businesses,” he said. “Which ones got their attention? What did they do to get the attention?
“My favorite story is that of Victoria’s Secret and cassette tapes. In the time when cassettes were popular, Victoria’s Secret was the retailer who sold the most classical music. That amazes me, yet I understand how they did it. So, if I am selling car parts, what else can I sell that you might think is unrelated but deep down has a connection?”
In other words, observe how mall retailers deliver a full sensory experience of sight, sound, touch and feel. Then follow their lead in showcasing unexpected combinations of top-quality purchase items and accessories.
Better yet, add regular product demonstrations and interactive displays. An online or big-box seller may have the advantages of wider inventories, lower pricing and less overhead costs, but your retail space is still the only place where consumers can see and feel products in action. Make it worth the visit.
Advantage 3: Knowledge
Whether by seeing a product up close, observing it demonstrated in person or finding answers to detailed questions, consumers turn to brick-and-mortar retailers for knowledge they can’t glean from the internet. In fact, the above-cited Timetrade Report also found that 90% of shoppers are more likely to buy when helped by a knowledgeable sales person, and 63% of consumers surveyed indicated that they will shop the most knowledgeable source if the same item is available at four different retailers.
Sure, consumers may do most of their initial product and pricing research online, but more often than not, it’s an expert sales or counter person at a local store who closes the deal—even if the store price is slightly higher than that found on the web. This is true not only for older “traditional” consumers but also younger shoppers reared in the digital age. Your task, said Shay, is to “make customer service happen [and] educate the staff.” Make your retail establishment the consumer’s go-to expert and problem solver.
A local shop’s greatest advantage is its ability to be itself. Displays that highlight top-quality products in interesting ways encourage browsing and help to brand the uniqueness of a local business.
Advantage 4: Trust
Along with knowledge comes trust and, ultimately, relationships—two other commodities that consumers can’t truly immerse themselves in online. Your brick-and-mortar store has an innate advantage: A physical location deepens trust by its mere physical presence.
Consumers associate bricks and mortar with legitimacy. They can engage their seller face to face and work out difficulties or return products that don’t meet their expectations. What’s more, they often feel more secure making credit-card transactions at a store counter. These personal interactions lead to customer retention and, in turn, good reviews and a dedicated social-media following or “brand evangelism” for a store on Yelp, Facebook and similar social-media sites. Shay again cited studies showing that 50% of consumers said they value the recommendations by a real salesperson and 60% will buy more than they planned if they like the salesperson. Trust goes a long way.
Advantage 5: Service
Really, the fifth advantage of a brick-and-mortar shop is its ace in the hole. Great service is something consumers highly value, yet it costs a physical retail establishment very little by comparison. Delivering a personal touch is what you can excel at, so make customer service your top priority. Do the things the competition won’t.
Don’t be afraid to let a few employees go who have too many excuses for why they can’t serve the customer or make the sale. Hire people different from yourself who bring to the table customer service skills that you may lack. Regularly review and drill your staff in the basics of customer service. Make your customers feel welcome, and find ways to save them money and thank them for their business. Equally important, make specific customer follow-up procedures and the personnel and means to execute them routine components of your advertising budget.
Bonus: Being Yourself
Perhaps the biggest advantage of a brick-and-mortar store is its ability to be itself. “Local can mean unique; if you’re unique, you have no competition,” Shay observed.
Tom Shay, Principal
Profits Plus Solutions Inc.
P.O. Box 1577
St. Petersburg, FL 33731
Again, your retail establishment is best positioned to know its customers, adapt to their changing needs and look after them. As a small business, your store is uniquely suited to cater to browsing customers, confused shoppers and consumers with specific needs. Ask yourself, “What kind of business do my customers know my store to be?” Aim to provide your clientele with the latest, top-quality name brands and innovative, problem-solving products. If you’re considering an item that the big competition is selling, make sure there is a compelling reason to do so. Being unique means that you ultimately control your own brand, pricing and your business destiny.
And one last thought, concluded Shay: “The big plus of the local guy is his passion, but it’s also his big negative. There is a misconception that everyone shares your passion. Instead, there are some customers with the passion but a lot with just a liking of what we sell. Moving them to passion is what builds the big customer base. Passion plus knowledge equals success. Without the knowledge, it just becomes a lot of hours in an underpaying job.”
For more information about how SEMA Education can help your business, contact SEMA Director of Education Zane Clark by phone at 909-610-6743 or go online to www.sema.org/education.