April 19 2011|05.00 AM UTC

Alex Gutow

The Future of Brick and Mortar

Category: SR, UncategorizedTags: , , , , , , , ,

Fourteen years ago, web startups in every category seemed poised to change the fate of brick-and-mortar retailers. As we all know, many of these web startups failed to convince consumers to change their buying habits before they had burned through all of their investment money. The dot coms that survived, like Amazon, came to rule their respective categories and, with innovations like targeted recommendations and free shipping, they left a mark that continues to affect traditional businesses.

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The most recent to feel the effect is Borders. The 40-year-old chain persevered against the new online entities by creating their own website that augmented their physical locations. This seemed to be working fine until the rise in e-reader popularity. Borders entered the e-reader market too late and were not able to provide the e-books through their physical stores. After their bankruptcy announcement in February, they are set to close hundreds of stores across the country and will attempt to reinvent themselves as they move the majority of their sales online.

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Blockbuster is another retailing behemoth that fell due to an online competitor, Netflix. Despite the attempts to leverage their multiple location advantage by offering subscriptions that blended free in-store rentals with additional online ordering, same store sales fell too fast and put them in bankruptcy court. As Blockbuster is still a well-known name and a beloved company for many, when they emerge from bankruptcy, they will hope to add another chapter to this story that will most likely focus more on on-demand products and services.

All is not lost in the world of brick-and-mortar though. These traditional stores still provide convenient locations, instant gratification and interactions with actual people that can be paired with trends and technological enhancements to increase sales. The rise of Groupon and similar daily-deal sites has helped drive traffic back to restaurants and retail establishments, energizing them during the recent recession. Groupon has made couponing “in” and has proven successful even though it requires purchasers to visit the store to redeem. This doesn’t mean they’re shying away from innovation though. Printing is often unnecessary as coupons can be redeemed from a bar code on a purchaser’s cell phone. Both Groupon and LivingSocial have also announced mobile apps that will expand upon their deal-a-day premise.

Smart phones are also helping to launch traditional retailers into the 21st century through NFC (Near Field Communication) chips. With your mobile phone acting in partnership with your wallet, retailers may be able to regain their importance as a necessary and convenient part of our shopping culture.

No matter how much the Internet has changed the face of traditional retail, it is likely not going to eliminate the need for it in the near future. As long as brick-and-mortar stores heed the warnings from the bankrupt Borders and Blockbusters and keep an open mind about new innovations and tech trends, many should be able to come out ahead by working with the web rather than against it.

On our side of the business, we’ve hinted some at BillShrink’s new innovations that are helping people get great rewards from their favorite retailers. Our StatementRewards product, which embeds retailer discounts and rewards directly into your online bank statement, will be rolled out to more than 7 million Americans this year. We’ll keep you posted on new developments coming up – we’ve got quite a few more ideas that just might help our favorite online and offline retailers keep delivering their best products to us.

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{ 1 comment… read it below or add one }

Herndon Basement Remodeling April 23, 2011 at 3:53 am

I’m not sure if Groupon is the pioneering coupon site but they are the most well-known. They have certainly done a great job of offering coupon discounts to consumers which helps consumers get their savings and at the same time introduce clients to businesses who can be repeat customers.


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