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e-Commerce Industry News

March 9, 2016
Online retail giants expanding brick-and-mortar stores
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March 9, 2016
More eRetail companies are starting to open physical stores to support omnichannel demand. More eRetail companies are starting
to open physical stores to
support omnichannel demand.
Many retailers today are focusing on improving eCommerce operations to increase their online market share. To reduce costs and increase omnichannel spend, some of the most well-known brands, such as Macy's, JC Penney and Sears, have chosen to shut a portion of their stores down. But it seems that other companies are taking somewhat of an inverted approach by expanding in-person offerings.

A handful of merchants have started offering click-and-collect services, which allow customers to place an order online then pick it up in the store. This is a mutually beneficial method: The retailer is still able to get the shopper in its physical location and both parties are able to save time and money. Another omnichannel strategy used by online retailers is installing pick-up centers in already established facilities, such as the ones Amazon Inc. opened on a number of college campuses in the United States.

And it seems some corporations are taking the physical expansion a step further.

Enhancing eCommerce by increasing in-store investments
In an article for Philly.com, Suzette Parmley recently highlighted how some of the eCommerce giants that were originally conceived online are now opening brick-and-mortar stores. Last year, for example, Amazon.com opened its first store in Seattle. And it isn't the only eRetailer to add physical locations to the consumer market. Athleta, Fabletics, Birchbox, Bonobos and Warby Parker are just some of the brands joining Amazon on that list.

How is it that some organizations are forced to close dozens of their locations while others are setting up new ones? CenterSquare Investment Management's Eric Rothman told Parmley that property owners want "hot tenants" that appeal to consumers and, for the most part, those are the brands that have focused on the eCommerce platform. Put simply, "The strong get stronger and the weak get weaker, which is exacerbated by the Internet."

Palmer also revealed that, according to industry experts, the trend is expected to gain popularity, especially among omnichannel buyers who have a preferred method of shopping. Dave Parro, vice president at Walker Sands, pointed out that many people like shopping in stores because it is a different experience that allows them to directly interact with a product before purchasing it. On the other hand, some prefer buying on the Internet because they have access to more options and it is more convenient.

There are benefits to both methods. And this merging of online and in-store selling is what Rothman referred to as "part of the revolution of retail." Gone are the days when companies had to choose between being an eCommerce company or brick-and-mortar store. Instead, Rothman indicated, the success of retailers hinges on the ability to effectively manage a multichannel model.

And this is where the use of advanced digital technology comes into play.

Using software systems and solutions to improve omnichannel retail
This week, The Wall Street Journal reported that software company E2open recently acquired Terra Technology, a business that specializes in retail market forecasts and analysis. The report explained that many organizations are strategically teaming up to combine operations so that they are better able to meet the rapidly increasing demands of the eCommerce environment.

"Everything is more volatile now thanks to eCommerce," Nucleus Research Software Analyst James Cooke said to the source. Furthermore, by leveraging technological solutions and software systems that link front and back end operations, retailers will be better equipped to enhance their omnichannel strategies.

For example, The Wall Street Journal pointed out that one of the biggest areas of concern for merchants is inventory management. This is why these companies have chosen to partner with technology providers that can give them access to the information needed to forecast market shifts and handle stock and inventory levels in real time.

To gain an advantage over competitors, it is essential that retailers understand the importance of developing an omnichannel model that provides consumers with a seamless, consistent shopping experience, whether it is in-store or online. By working with a third-party company that specializes in eCommerce software solutions, retail businesses will be able to utilize a platform that increases insight and visibility, quickly and accurately collects complex sets of data, and provides more control over the storing, distribution and delivery of goods.

Although an online merchant may not be in a position to open a string of brick-and-mortar stores, businesses of this kind should take advantage of the omnichannel solutions available to them that will help reduce costs, improve customer service and drive revenue.