The Biggest Challenges Faced by Brick and Mortar Retail Stores

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The Biggest Challenges Faced by Brick and Mortar Retail Stores

I spotted this question on Quora “What are some of the biggest challenges faced by brick and mortar retail clothing stores?” and felt compelled to answer given my conversations with over a hundred brick and mortar retailers in recent months.

A common answer is survival. The growth of online sales has threatened the traditional brick & mortar business, but it is possible to not just survive but succeed.

The biggest challenge is adapting to being a omni-channel experience.

Brick & mortar retailers have been catapulted into a multi-channel shopping cycle due to changing customer behaviors and advanced technology.

An omni-channel world presents a subset of challenges:

Challenge: Engaging via Mobile

Customers are using mobile to drive purchasing decisions, where to shop, what’s nearby and make the purchase itself. The brick & mortar store needs to have a mobile presence not just to capture sales but to actively lead customers in-store.

  • 50% of mobile searches have local intent
  • Mobile now makes up 12% of all eCommerce Sales

Challenge: Reverse Showrooming

When consumers go online to research products, but then head to a brick-and-mortar store to complete their purchase.

The lines between online and offline retail are blurring faster than ever. Forrester predicts that by 2017, 60% of all retail transactions in the United States “will involve the Internet in some way.”

Brick & mortar stores have an advantage, but need their inventory indexed online, and should take advantage of tools like structured product data by Google.

Challenge: Showrooming

A practice whereby consumers walk into a store to look at merchandise but leverage their smartphone to see if the item is available cheaper elsewhere before purchasing. More common in electronics and related retailers, however even apparel retailers should be wary.

Some big box retailers have responded by supporting the trend, offering in-store wifi to actively encourage shoppers to browse and even see more product selections from their brand and then provide a timely offer to seal the purchase. Sales reps can play a huge part in providing expertise and cross sell encouraging the impulse, instant gratification in-store purchase.

Challenge: Customer Service, Clienteling and Checkout

New use cases have evolved e.g.

  • Capturing customer data in-store to retarget online
  • Accessing the online profile of a client when they are in-store to see their saved items, purchase history
  • eReceipts that connect the offline experience back online.

To take advantage of any of these opportunities to exceed in customer service online to offline and vice versa, all require advanced processes, operations and technology investments e.g. iPads for sales assistants, advanced email marketing.

Challenge: Inventory Management

Keeping inventory levels accurate when selling both in-store and online is a lot of manual work, or impossible for some. Many retailers find the challenge too difficult so they opt to sell different drop-ship inventory online than what’s in store. This essentially is a separate business operating with the same brand and actually can be harmful as reverse showrooming becomes a growing trend (searching for inventory online and then completing the purchase in-store, currently over 70% of sales).

The best way to tackle this is to ensure your eCommerce site is integrated with your in-store POS infrastructure, thus when items sell online, the website can auto adjust and you have a unified accurate view of in-store and online inventory at all times.

Challenge: Digital Assets Upkeep & Expertise

Online-only retailers spend 100% of their time on their digital assets website, mobile experience etc. In contrast brick & mortar retailers spend 1/10of their budgets online and often pay less than 5% of time to it daily. Yet they are expected to have just as beautiful and relevant modern experiences at all times. For this, brick & mortar retailers need to stop thinking of their digital assets as one-off projects – hiring a dev team every one or two years – but have a tech partner month to month supporting the business, or better yet in-house talent.

Too often brick & mortar stores launch a website and then watch it fail from lack of available expertise in driving site traffic, tech optimizations and online advertising.

Sku IQ tackles many of the above challenges and are specifically for retailers with both a physical store and an online store.