Today’s consumer is used to being able to shop any way they like: from their phone or computer or in person at a brick-and-mortar store. Now, they are even accustomed to buying online and picking up (or buying online and driving up to pick up).
Omnichannel retailing gives customers freedom to shop whenever, wherever they want, and it continues to evolve. What is omnichannel? Oxford Dictionaries defines it as “denoting or relating to a type of retail that integrates the different methods of shopping available to consumers (e.g., online, in a physical store, or by phone). Oracle calls omnichannel commerce “a strategy that aims to deliver a consistent experience for customers over several channels” and says that “all of the major players in retail are using it.”
Where Does Brick-and-Mortar Retail Fit into Omnichannel?
The retail store isn’t dead, but everything is evolving. Today’s shopper might browse for something online, reserve the item in a store, go to that store only to decide that they want a different size or color. They might have a store associate order the item they want to be shipped to their home.
There’s also the evolution of traditionally single-channel retailers to multi-channel, expanding their online-only offering to brick-and-mortar locations as well. We’ve seen a lot of this experimentation in the last few years and wrote about this several years ago, in fact.
- Some online companies spearheaded the trend of opening physical locations, and others opened distribution centers that doubled as stores to help streamline the sales process.
- During and post COVID, there was a rise in takeout via delivery drivers (DoorDash, Grubhub, UberEats) and it increased the demand for drive-thru dining options. Retailers started experimenting with things as revolutionary as food delivery via drone. This impacts the site selection process in that restaurant operators might lean toward certain sites over others.
- Some retailers repurposed their stores as fulfillment centers to get products into consumers’ hands faster. Kroger expanded in 2021, but without opening any physical stores (read our blog about this).
- Others began to treat their stores more as showroom--like IKEA, which opened a new smaller store in Queens, New York, in 2021, where buyers can order larger products at the store and arrange delivery to home.
Choosing Sites and Forecasting Sales in an Omnichannel World
For the retailer, offering such a versatile shopping experience is no small feat! A company must have an integrated system to ensure it has up-to-date access to inventory, otherwise teams can experience confusion and inefficiencies caused by siloes. Because buyers have greater visibility into stores’ supply chains and pricing, it steps up the competition too. It’s easier than ever for customers to comparison shop and make quick decisions.
For site selection and business decision making, you must analyze your business and understand your customers. Here are questions to answer as you dive into the process:
Are my e-commerce and brick and mortar (or pickup vs. delivery, etc.) customers the same?
Knowing this can help you determine whether you are serving them across the various touch points and doing what you can to drive them from online into the store and vice versa.
Are my e-commerce sales high in a particular area?
If so, it’s possible that adding a brick-and-mortar store in that geographic area would be a success. You can model this out by evaluating your competitors and learning more about the trade area.
What percentage of my customers are online?
If your online presence is strong, you might wonder about the impact on your brick-and-mortar sales. Would your customers who research or browse your website prefer to make purchases in a store? This is called digital-impacted sales, which are sales that include purchases made online as well as purchases made in-store by consumers using digital channels in their research, according to CBRE.
Is my retail category experiencing e-commerce growth?
And is my store following that trend? Some categories bode better for online shopping than others.
And of course, site characteristics are always important—but you might need to adapt what you’re looking for as part of your omnichannel strategy. Questions to ponder:
- Does my store need to serve as a distribution center as well as a retail location? You’ll need to choose sites that optimally serve both purposes.
- Do I need to choose locations with specific requirements? Perhaps you now need space for a dual-drive through, ample short-term parking for delivery drivers, or airspace that will allow for drone delivery.
- Do I need “A” real estate if my business is driven from online activity or delivery orders?
Being in the retail site selection business, our forecasting process addresses how omnichannel influences site selection. We are also thorough in our approach to understanding our clients’ consumers. Knowing as much as possible about your customers can help you determine whether you are meeting their needs, whether you’re losing customers to your competition and much more.
SiteSeer Can Help
SiteSeer can help you build models to determine whether you might do well in a particular area—for example, if you sell online today and want to decide whether opening a brick-and-mortar location would succeed. Maybe you want to understand how that brick-and-mortar store’s sales would impact your online sales.
It’s all about understanding your customers, your opportunities and your markets. While our expertise is forecasting store/physical location sales, we recognize that many businesses today do not have just physical locations. Therefore, we strive to help our clients understand their customers’ needs and how their e-commerce presence impacts their overall business. Contact us to learn more about our professional services and how we can help your business.