Small Businesses Need an E-Commerce Mindset to Survive

There are 10 JCPenney stores within 15 miles of my apartment, but I can’t tell you the last time I stepped inside of one. I can tell you, however, that last weekend I went on a 2 a.m. shopping spree for a new spring wardrobe from a UK-based company I only heard of because I clicked on a Facebook ad. I am a sucker for the e-commerce platforms boom and, when it comes to the eradication of brick-and-mortar retailers, I’m part of the problem.

Brokerage firm Credit Suisse estimated that more than 8,600 brick-and-mortar stores will close their doors in 2017. This projection trumps the rate of closures experienced during the 2008 recession, which is the worst year on record.

Some retailers, like the aforementioned JCPenney, are succumbing to the pressures placed on businesses by an increasingly e-commerce-centric economy.

“We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers,” JCPenney CEO Marvin Ellison said earlier this year in a press release announcing the impending closure of between 130 and 140 locations.

I shouldn’t pick on JCPenney because it’s certainly not alone. Recently, the news has been filled with companies opting, or being forced, to shutter their doors: Bebe, American Apparel, Sears, Abercrombie & Fitch, Sports Authority and Office Depot are among the unlucky, traditionally brick-and-mortar chains that have been unable to adapt to a generation of consumers that is increasingly reliant upon the convenience that online shopping can provide.

Many blame online retailers like Amazon for cornering the market, but ironically Amazon is in the process of launching retail locations for both bookstores and grocery stores. Brick-and-mortar retail may be struggling, but it’s not dead yet. By integrating success-drivers directly from the e-commerce space into physical storefronts, companies can create a balance that will motivate shoppers to get out from behind the screen and out into the real world when it’s time to make a purchase.

Personalized Suggestions

One reason I love shopping online is because companies feed me suggestions that are in line with my personal preferences. I don’t have to rifle through overcrowded racks of clothing I would never consider wearing or even flip through dozens of pages on a website anymore.

Personalization technologies have evolved to the point where consumers just expect the products they see online to be catered specifically to them. These recommendations, fueled by machine learning software, dictate the products displayed in successful e-commerce stores, and shoppers are rarely even aware of it. This personalization feeds into the “me first” mentality that a lot of Americans have adopted; the desire to be shown items that only appeal to their preferences carries over, maybe subconsciously, when shopping at a physical store.

Brick-and-mortars can create the same level of personalization, though, through in-store kiosks with artificial intelligence software and virtual reality (VR) functionality. Stores, such as Vineyard Vines, are already playing with the concept of in-store kiosks that can provide custom suggestions based on a shopper’s preferences.

The technology has evolved to the point that there are even stations that can scan customers’ measurements and predict not only what items they may prefer, but also which may be more flattering on their bodies—in-store Amazon Echoes, essentially. Rather than hiring a personal shopper, these digital alternatives provide that concierge-level experience to shoppers as an integrated part of the in-store experience, which is a value-add compared to online competitors.

Predictive Stocking

Amazon patented predictive stocking in 2014 to predict a shopper’s future purchases based on their buying history, online searches and how long they looked at a certain product on the company’s website. Retail stores can utilize similar AI technologies to predict how to stock stores with the merchandise potential real shoppers will want, not hypothetical shoppers as determined by generic data. By having the sizes, colors and styles in stock that appeal most to the hyper-local demographic of that particular location’s shoppers, stores can increase sales and shopper satisfaction.

Not only that, but these predictive stocking efforts can help increase add-on purchases by analyzing which products are most frequently purchased together in specific colors and sizes to ensure that the store’s stock is optimized for shoppers.

Predictive AI tools for retailers are fueled by data–any business that is serious about creating customized experiences for its shoppers needs to collect information on all demographics and interactions with products on its website and in store. Business intelligence software, data scientists and big data software tools will all be critical for companies looking to build those hyper-targeted shopping experiences for buyers.

E-commerce-based companies, on the other hand, are often spoon-fed analytics, which are much easier to record when it comes to a digital shopping experience compared to a physical one. Some e-commerce software tools, such as Salesforce Commerce Cloud, are focusing on merging the e-commerce and physical retail experience, taking away some of the pressure for brands to track, manage and act upon data on their own.

Convenience and Customer Experience

The convenience of shopping online is undeniable. But brick-and-mortar stores can take steps to make in-store shopping more enjoyable, too. Literally no one has ever enjoyed waiting in a long line at the checkout counter. Thanks to the proliferation of mobile devices, stores like Amazon Books have empowered shoppers to scan their own items as they shop using their smartphone cameras. When it’s time to pay, you can check out through your Amazon account via QR code, eliminating the need to pull out your wallet.

The level of control you can have as a customer is reassuring, and you won’t ever again have to feel the pain of being stuck behind someone digging for exact change. This may be one area where brick-and-mortar shops can speed up customer convenience–scanning a QR code in store has the potential to be exponentially faster than inputting credit card, billing and shipping information on an e-commerce site.

The scanning to put products into your digital queue also feeds back into the quality of experiences stores can provide you in the future. By scanning a product, the app can remember what you purchased in the past and learn about your interests. The next time you come to the store, it can be more intelligent than during your previous visit and continue to provide more highly personalized experiences. This, in turn, should make your in-store shopping experience faster and more customized.

Is it possible that a kid born in 20 years will never know the joy of playing hide and seek in the middle of scratched metal racks overflowing with the latest clearance finds while their mother searches for the perfect dress? Will there be a day where no one remembers what it feels like to be offered a credit card they don’t want by a high schooler behind the register? I’m not convinced that this current brick-and-mortar slump represents the end of times for retail stores. But the increase in closures is significant and indicative of the fact that traditional retailers need to be forward thinking and innovative with the in-store experiences they create for their customers.

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