Online and Physical Retail: No, They are NOT Mutually Exclusive

Online and Physical Retail: No, They are NOT Mutually Exclusive

While we all have to remain pragmatic about the continued unraveling of some national retail stores: it’s completely unrealistic to assume that physical retail is in an unavoidable, inevitable death spiral (also: it’s not). Payless Shoes just announced that it’s emerging from bankruptcy.  Despite the gloom and doom headlines, not all physical stores are buckling under Amazon’s online heft. In fact: several are thriving.

Our position is now and has always been that the new paradigm for success is survival. Our other position: follow the success stories, understand and learn from those lessons, and, chances are (whether we’re calling this a retail apocalypse or an inevitable downsizing from over expansion in mid-markets): you’ll win.

“In Real Life” is Coming

While regional shopping malls obviously have some retooling to do, there are models that could successfully blend the convenience and personalization of online with the hands-on nature of brick and mortar. Chicago’s prestigious Water Tower Plaza (through a strategic partnership with the GGP) is spearheading this very model with what they’ve called the “IRL” experience.

According to coverage from Retail Dive, In Real Life gives native brands (stores that have launched and flourished exclusively online) an opportunity to sell to customers in person. Different themes will be on display in a 4,000-square-foot showroom and retail space. First up, home goods: customers can check out online mattress seller Leesa and artwork from virtual showroom UGallery. This is a chance for (to quote more coverage from Glossy) for sellers who haven’t had the opportunity to sell wares in a physical environment to engage with their eager online buyers in a new way.

Shoppers, if they see what they like, order from iPads throughout the showroom and the seller ships the item directly (eliminating the costly overhead of on-site inventory from the mix). While there isn’t any word yet on what other verticals this partnership may roll out in the future, GGP does have plans for 127 other properties. We’d call that confidence of the bullish variety.

Lessons Learned from Ulta Beauty

When Mary Dillon stepped into the role of CEO for the then ailing budget beauty company, she had a lot of heavy lifting to do. She smartly turned around the brand’s digital marketing presence, partnering with vloggers, and launching an exclusive MAC partnership online before it was available in physical stores. The result: her company’s online revenue has doubled since 2013.

Her strategy, in her own words:

“In the past four years, we’ve really established Ulta Beauty as 'All things beauty all in one place,'” says Dillon. “We’re in all the places that a shopper is engaged digitally to learn about beauty."

The takeaway from Dillon: eCommerce isn’t an “instead of” or an all-or-nothing model; it’s an “in addition to” strategy that works alongside the chain’s established physical locations. She was shrewd and knew that shoppers now expect brands to talk to them from multiple channels. She is keeping pace with her audience’s expectations and letting them make the choice of where and when to buy for themselves.

As the retail shakeout continues, there are obviously going to be ongoing examples of winners and losers. In between all the hand wringing and analyst hype: focus on the real world examples that are taking shape throughout the industry. There, you’ll find the creativity, vision, and enthusiasm that will keep brands thriving well into the future.

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