It's counter-intuitive, but the future of retail is offline.

E-commerce has been such a major part of the global retail economy for so many years that you can be forgiven for hastening the demise of brick-and-mortar shopping. It’s possible you know someone who hasn’t gone to a physical store to buy something in the past year. But that’s all anecdotal evidence–the reality of the situation surrounding brick-and-mortar retail is quite different.

Despite the fact that online sales in the U.S. grossed approximately $394 billion in 2016, that was still only 12 percent of the total retail market in the country.

Dozens of powerful e-commerce players who began with an online-only business model are beginning to see the potential for expanding into physical retail. Even Amazon, the company that most symbolizes the transition to online shopping, has opened a physical store in Seattle and plans to expand further.

Physical retail remains a thriving industry, and e-commerce brands have an opportunity to deliver something new to customers and drive additional sales by venturing into brick-and-mortar.

 

Why should you want to move into retail?

It seems reasonable to start with this question, right? Once it became clear that Amazon was not just an internet fad, and especially once smartphones made it possible for anyone to order anything anywhere, we all wondered whether these were the dying days of retail.

Who would want to pay for expensive real estate, furnishings and labor costs when numerous brands had proven you could be successful with some decent web design? As the novelty of e-commerce has worn off, however, it appears the pendulum may be swinging back in the other direction.

Innovative companies that began as digital enterprises are discovering the brick-and-mortar shopping experience isn’t the drag many people profess it to be. For leaders who are smart and view their channels as ways to provide customers with exceptional experiences, there are numerous opportunities in the world of physical retail that simply aren’t possible through e-commerce alone.

 

Connecting with customers in a physical space.

Customer engagement is the one thing every company hopes to improve on, whether they operate solely through e-commerce, brick-and-mortar, or engage in omni-channel selling. For instance, online clothing retailer Bonobos has proven how they can better connect with their customers through maintaining a physical presence.

Bonobos realized no matter how good their logistics management, supply chain management and customer service were, people still wanted to try on clothes before buying them. Even with a generous return policy and company-subsidized shipping costs, it’s still a hassle for people to return items that don’t fit.

The company decided to turn this into a positive by opening Guideshops in across the country. There, customers can make appointments to receive personalized service for fittings and orders, and have their purchases shipped for free.

 

Driving additional value for all parties.

Opening a brick-and-mortar retail location offers benefits to customers that are impossible in an online-only setting. This is important for any company that seeks a deeper connection with their customers, but moving to an omni-channel retail strategy can have quantitative financial benefits as well.

In the case of Bonobos, the company reports that orders placed through Guideshops are, on average, twice as large as those placed directly through the website. With these kinds of results, the increases in sales can more than offset the additional operational costs required to run a physical store.

 

Innovating the in-store experience.

Many e-commerce companies are using retail locations as opportunities to explore the fact that there is ample room for innovation when it comes to the in-store experience. There’s a chance for them to move beyond the traditional department store drudgery so many people were happy to escape when e-commerce became possible, and to present shoppers with unique experiences that will make them want to travel to a physical store rather than pick up their smartphone.

In 2017, my team and I at Amerisleep opened our redefined mattress stores in luxury shopping malls around Arizona. Why? A 2011 study from nonprofit RTI International revealed that, in a typical showroom experience, most people were unable to identify the right mattress to improve their sleep quality. A survey we conducted found that nearly 20 percent of respondents didn’t know how to choose a mattress with the appropriate firmness level for their body type and sleep style.

In our stores, we try to make sure shoppers find the bed that’s perfect for them, and it’s helped us maintain low return rates.

Despite the explosive growth of e-commerce, brick-and-mortar retail is here to stay. In fact, this is just the beginning of a new era of retail. Brands are now challenging themselves to innovate in creative and exciting ways, using physical spaces not just as a transaction point but as an opportunity to enhance each shopper’s experience.