Is Brick-and-Mortar Shopping the Next Big Thing in Digital?

Are brick-and-mortar stores the next big thing in digital?

Last week, the internet was abuzz about Amazon -- the world's greatest virtual store -- contemplating opening a real brick-and-mortar store.

Not 24 hours later, the rumors started flying around Google opening a store in Dublin.

So I thought about other great online brands and their relationship to the real world.

Ebay has a thriving business of drop-off stores that support prospective sellers in the physical world so it's easier to auction in the virtual one. Microsoft's retail empire is nascent, but clearly on a growth curve.

And, of course, everyone's learning from Apple, whose stores feel like a wild and wonderful physical manifestation of the internet -- open 24/7, loaded with information, customer-driven interactivity, and, if you actually buy something, the receipt goes straight to email. Just like you were buying online!

So what is it all about? With Facebook's IPO marking their huge coming of age, is the rest of the world regressing?

In my view, it's all very simple, and actually hugely exciting. I believe we are starting to see a productive, powerful convergence of the digital and physical worlds.

Why? Because while digital is everything -- just think of how it's transformed our personal not to mention professional lives -- not everything is digital. We eat in restaurants, we haven't abandoned real community for online community, and we still like flesh-and-blood salespeople to say that suit's just right for us.

Along those lines, just last week, I got a beautifully handwritten note on a fine piece of stationery from a prominent haberdashery in New York. They started off by noting that I hadn't been in the store in a decade and that they "thought a brief reminder would be nice." They then told me what I bought at my last visit, where they have been located since 2004, and that they were celebrating their 122nd year since their founding in Germany.

This couldn't be more analog, but really, it's not totally foreign to data aggregations you might see coming from Amazon -- what you purchased, online reminders and recommendations.

But for a time, marketers have created a great and artificial divide between what's "traditional" and new, what's online or offline, what should be data-driven or emotive. The smart digital brands are taking what they know about the digital world and bridging it back to the physical world. And, believe me, I am not, even for a nano-second, suggesting that they are walking away from digital. I repeat -- digital is everything.

But I take my hat off to Google and Amazon, who are driving digital into Digital Exponential -- where digital helps create a complete lifestyle, because customers live both online and in the real world.

It's no small wonder that this Digital Exponential is percolating in the retail space. Retail has always been about creating a special user experience that begins before you enter the store and is supported at the store by an environment that defines the brand, as well as by sales people who walk and talk it. And then it's reinforced after the visit by everything from the shopping bag to the returns policy.

That's why, even though people can order just about everything online, they sometimes choose to patiently wait on lines just to get inside the doors. Ignoring that customers sometimes opt for the tactile over the technological is a perilous path, because the brand experience should be complete, whether it's rooted in the physical or virtual world. Conversely, anyone who thinks it's enough to have a customer "like" a Facebook page is missing the real power that comes out of the culture of sharing in social networks.

Where will Digital Exponential find its perfect expression? No doubt through mobile, which allows us to combine work and play, which helps us navigate both through the virtual and physical worlds and which gives us a life experience, filled with more possibility than ever.

These are really interesting times.

 

Comments

[David Sable]

07:28 AM on 02/17/2012

what I find interesting is all the young hip entrepreneuers who are burdening themselves with archaic retail space -- all over the world -- the issue isnt the space vs virtual -- to your point its nimble and new that makes the difference -- the power of the Amazon model was proved out by Sears in the 1880's everything under one roof (or book) low cost; easy shipping; no need to come ot a store etc etc -- they lost their way -- could have/should have been Amazon -- Why it was called the wishbook -- check it out and read the cover copy -- word for word Amazon of today.
But the power of a physical location resonates and will I belive always -- especially as digital power continues to fuel retail --

[jcaunter]

01:23 AM on 02/17/2012

To answer your question, no. If these companies chose to burden themselves with archaic retail space and its associated costs, smaller, nimbler competitors will arise to offer cheaper competition. Sound familiar?

[Peter Combs]

04:47 PM on 02/16/2012

WHile it's interesting that Amazon is contemplating the concept, its a bad a idea for their current business model. Apple's stores do very well for obvious reasons..Huge margins and undersupplied demand.

Amazon's margins are very thin to negative on some products, their earnings are poor at best , as is reflected by the company's PE Ratios, which are abyssmal.

I love shopping on Amazon for one reason..they have everything on the site one way or another. Potential stores will never be able to carry that much inventory and compete with other existing stores which in many markets are already giving up space and cutting margins to the absolute bone..Retail is all about overhead...Amazon won't be able to afford it. Kindle sales are faultering as well and they are loosing around $14 on each one already.