The Death of Offline
It happened to Borders in 2011. It is happening to RadioShack and JC Penny in 2015. Brick-and-mortar stores are overwhelmingly surrendering to the power of online business, which offers customers more convenience, better prices, and a wealth of other advantages.
Though most offline stores remain in limbo, many big-name companies are closing their doors due to an inability to compete in our increasingly online marketplace. Does this spell the final end for brick-and-mortars? Experts aren’t entirely sure.
Where Many Stores Went Wrong
Business has always been about creativity and flexibility, but those two qualities are even more important in today’s digital age, when consumers’ needs often change on a dime. As technology progresses nearly at the speed of light, consumers are hungry for faster, better, more convenient services, and many brick-and-mortar stores simply can’t compete on that level.
Radio Shack is currently experiencing a brisk downfall due to the electronics store’s inability to adapt to changing customer desires and the online market. In 10 years, Radio Shack lost $1.5 billion in annual profits while Amazon gained more than $70 billion.
This year, Radio Shack is closing more than 20 percent of its stores (roughly 1,100 physical locations) because of its lack of funds. Yet, Radio Shack still fails to understand exactly what their customers want: The store’s biggest sales category is wireless, meaning cellphones and smartphones which a vast majority of people already own. Worse, Radio Shack missed the boat on e-commerce, and thus ceded all of its potential online profits to its forward-thinking, digital competitors.
Why Online Rules
As brick-and-mortars crumble into the dust, online sales are absolutely booming. E-commerce giants like Amazon certainly sweep up an ample amount of profits every year, but even small business websites have been shown to increase a store’s profits. Here are a few reasons consumers now prefer digital over physical shopping:
Convenient payment. Lacking lines and interaction with cashiers, online shopping is expedient and enjoyable.
How Many Brick and Mortars Are Holding on
Take the story of Borders and Barnes and Noble. Both mega-bookstores boomed almost immediately after they opened because they could offer consumers thousands of book titles and superior cataloguing systems. However, throughout the ‘00s, Borders invested heavily in physical media — CDs and DVDs — while Barnes and Noble pulled back on merchandizing in favor of digital media. Borders saw e-commerce as a waste of resources and allowed Amazon to sequester their online orders, while Barnes and Noble developed their own online shop system. Today, Borders has completely disappeared, while Barnes and Noble maintains a strong foothold throughout the country, providing books in regions where no other bookstores exist. It is easy to see how Barnes and Noble’s flexibility and forethought allowed it to survive even as online giants like Amazon started stomping out physical competition.
What Physically Small and Medium Businesses Can Do to Stem the Tide
Brick-and-mortars who want to avoid the fates of Borders and Radio Shack must think long and hard about their status in the digital sphere. Stores that exist completely offline are dying out fast. It is more important than ever to have some form of online presence, and small-business website generators (like these top hosting options) are incredibly easy to use.
However, having a website alone may not be enough. A more strategic approach to using the Web to leverage brick-and-mortar survival is having an aggressive online marketing plan. Traditional marketing was declared dead three years ago, and in its place, online tactics like social media marketing and content marketing have blossomed. With an interesting, engaging online presence, no retail store will fail.
Successful offline stores may be rare breeds, but that doesn’t mean the brick-and-mortar will go extinct. With flexibility, creativity, and Web savvy, a business can go digital while remaining physical.