Online Threats to Brick-and-Mortar Stores

Online retailers are constantly getting bad press for not meeting customer expectations. People complain when products are out of stock, when customer service is not prompt, and when delivery is slow or costly.

Sure, online shopping doesn’t always meet expectations. But think of how high customer expectations have become. Online shopping has conditioned customers to expect to be able to purchase any product quickly and easily, at a competitive price, and have it delivered on their own terms.

Online retailers are learning how to meet these expectations. Those who don’t won’t survive. Nobody would argue with that.

What is interesting, though, is how much of an impact these expectations are having on brick-and-mortar stores. Customers are being conditioned by the online shopping experience and are starting to make demands that brick-and-mortar stores are failing to meet.

Here’s an example. Some months back, I went into the flagship Levi’s store on Madison Avenue. Plastered on the walls were signs about how the company could “customize” jeans. All I wanted, though, was a pair of black jeans in my size.

It turned out that they didn’t have my size in stock. And they couldn’t make me a pair because Levi’s only “customizes” jeans that are the right size to begin with.

No one at the store could check inventory at other stores. I couldn’t order online at the store (you still can’t buy online from Levi’s). All they could offer me was an 800 number to call when I got home.

It goes without saying that the experience soured me on their brand and will deter me from ever again entering their stores. Five years ago, their not having my size or a way to get it might have been something I could have forgiven and forgotten. But I have been spoiled by online shopping.

Heightened expectations are only the first assault on brick-and-mortar institutions. As more and more people use wireless devices, services like Dealtime.com, which consolidate price listings for comparison shopping, will allow online companies with low overhead to feed off of offline stores.

This is how it might work. Suppose I was shopping for a sofa. I might want to visit a brick-and-mortar store that would allow me to look at a number of choices before I made my selection. I would want to see what the colors looked like in real life, how comfortable they are, and get a real sense of their dimensions.

Once I made a choice, and burned through an hour of a salesperson’s time, I could use my Palm Pilot or cell phone to see if an online store would beat the store’s price. Standing in one store, I could order from another and have the sofa delivered to my home at a lower price.

Brick-and-mortar stores are already flat-footed when it comes to competing with the growing power of online retailing. Without an integrated online approach that allows them to offer the type of value that customers will increasing demand, they will be dead in the water.

The line between online and offline retailing is blurring. For customers, the distinction will disappear; it will be solely about finding the most value. One way or another, every company needs to face the way customers are changing if they are going to survive.

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