Many modern consumers see online shopping as the default for browsing and purchasing from their favorite stores. After all, eCommerce sales hit $4.93 trillion (globally) in 2021. By the end of 2022, that’s expected to rise to an impressive $5.54 trillion.
Think pieces about the death of brick-and-mortar stores have inundated the web since 2014 – with article after article claiming the end of the days of physical stores with eCommerce websites as “nice-to-haves” but no longer sustainable as they largely relied on foot traffic for profit.
Yet, retail stores aren’t a relic. In fact, just 20.3% of retail sales are expected to come from eCommerce in 2022. Or, in the second quarter of 2022 in the United States, 14.5% of all sales. While that’s a marked increase from the just-over-5% of 2013, physical stores aren’t going anywhere.
Instead, many eCommerce brands are now moving towards opening a brick-and-mortar store to supplement their web shops, stabilize their brand, and diversify how they reach customers.
Advantages of having a retail store alongside your eCommerce brand
In fact, for many eCommerce brands, a brick-and-mortar store can offer advantages, including competitive ones.
1) More inventory points
Retail stores function as warehousing, allowing you to distribute stock, create a new logistics point, and to offer in-store pickup for local customers. Retail stores also benefit from having diverse stock, which makes it easy to use the point to distribute stock so that it’s as close as possible to your customers when they place an order.
2) Additional customer service points
Retail stores provide physical customer service points, where customers can talk to a representative in person, drop off returns, and pick up orders they placed online. Any of these strategies reduces your costs by reducing spend on shipping, sorting, and poor customer experiences – while giving your customer a faster and more positive experience.
Plus, if your customer can walk into a store with an item they ordered online, exchange it for something else, and walk out immediately with a replacement – they will be that much happier.
Buy Online, Pick Up Instore strategies are also increasingly popular, led by large marketplaces like Walmart, which uses curbside pickup and instore pickup to reduce demand on its logistics. Smaller retailers can do the same – but with fewer logistics points. For Walmart, it’s so much a success that in 2021, nearly a quarter of its earnings were click and collect orders.
Packaging, shipping, and delivery each have their own significant impact on C02 emissions and environment. Last mile delivery is particularly bad, as increases in traffic significantly increase congestion and pollution in cities but international shipping and even packaging are equally detrimental . eCommerce stores churn out massive quantities of packaging, from boxes to dunnage to paper and labels – and all of that is avoidable if you buy from a retail store.
Having retail stores alongside eCommerce stores gives customers the option to make more sustainable purchases. And, with the option to order online and pick up in store, those same customers can get the best of both worlds – convenience and availability with reduced impact on the environment.
How to bridge the gap between retail and online operations
While there are significant differences between online and in-person sales, you can run both with the same backend. In fact, as long as you have a front-end strategy in place to optimize the buyer experience for each, the back-end can be streamlined to avoid mistakes, to maximize inventory availability, and to reduce costs.
If you’re moving an eCommerce store to brick and mortar, optimizing the in-person sales experience should be a first step. Point of Sale or POS software is normally the first system to invest in. Here, POS relies on scanned barcodes to pull relevant products from inventory management and then allow customers to make a payment using their card. That’s quite a bit different from online shopping carts, which only have to communicate with PIM software and then pass orders on to a payment gateway.
At the same time, both should be synchronized, with data shared between each in as close to real time as possible. That’s especially important if you use your brick-and-mortar store as an extension of your warehousing. It’s critical that orders processed through the POS are updated in the online inventory in real time, as they are sold. That will prevent overselling or double selling products.
Here, distributed fulfillment and inventory management systems like Flxpoint can synchronize your systems, keeping your POS and local inventory in sync with inventory in your third-party logistics, other warehouses, and on other channels. Then, whether an online customer orders the last of an item, a customer tries to order an item after it’s just been sold in-store, that’s all updated, and customers can see the product is out of stock before they place an order.
Similarly, it’s critical that you synchronize inventory across all channels, fulfillment points, and points of sale. If you don’t know what you have at every warehousing point at any given time, you have no way to track what you’re selling or why.
That’s especially important when you add offline sales to the mix, because it’s extremely easy to oversell thinking you have products left, when they’ve already been sold offline. For that reason, POS systems have to synchronize to master databases, so an item scanned out is treated as an item shipped out in your eCommerce system.
Flxpoint will resolve this issue as well, but can also help to avoid backorders or out of stock issues by diverting online orders to the next nearest warehouse location. If your customer is ordering closest to your retail store but the product is out of stock there, your eCommerce system could offer a delivery option or to ship to the store – but not immediate pickup in store.
One of the key benefits of opening a retail store is enabling customers to buy online and pick up in store. Achieving that means synchronizing your processes so that retail stores can receive orders using the same software you process orders with.
Here, your brick-and-mortar store can serve as just another node in your inventory fulfillment network. Often, that will mean integrating the POS into your inventory management system, so you can receive orders in the same system where you process other orders in the system.
Here, tools like ShipHero allow you to import logistics points to automatically route orders to the nearest geographical point. That can include automatically submitting orders to your system, submitting pick and pack orders, and automating the process of preparing shipping labels and order tracking data.
Brick and mortar stores also allow you to create hybrid return options – with the intent of delivering a better customer experience. If customers want to show up in-store to return an item and get a replacement or money back, it also reduces costs on your end by reducing shipping, avoiding the issue of asking customers to take on the burden of paying return shipping, and providing a more immediate response.
However, doing so necessitates carefully synchronizing online orders with in-store inventory and orders. Your POS has to map to your shopping carts and online sales, so you can see orders, what customers paid, when they ordered, etc.
Here, tools like Loop Returns and Returnly can add return functionality on top of your omnichannel eCommerce solution. However, if you’re already using ShipHero, it also offers a native returns management solution – which may be a better call if you already use it.
And, of course, once you accept returns in a store, you’ll still have to process those returns, sort them, and move them to a warehouse or other facility – which will mean having logistics and integration in place.
Make your brick-and-mortar stores your competitive advantage
Eventually, brick-and-mortar stores can offer a lot of advantages for eCommerce brands. Not only do they give your brand trustworthiness, but they can also improve customer service, improve shipping speeds, and reduce costs for you and the consumer. And, if you choose locations based on where online orders take place, they can serve as valuable additions to your return and fulfillment processes. Of course, making everything run smoothly will require setting up tools to synchronize inventory across warehouses, sales channels, and points of sale.
About the Author
This is a guest post from Rachel Go. Rachel is a content marketer and strategist at Flxpoint, an enterprise ecommerce operations platform. Flxpoint enables merchants and brands to unify and automate every aspect of your ecommerce operations, and scale without manual processes or custom development slowing you down.