Best Buy Is Closing Down 50 Selected Stores, Is This A Sign Which Indicates The End Of Brick And Mortar Stores As Online Stores Take Supremacy?

So, you have heard Best Buy is closing 50 selected stores, but do you wonder why?  Best Buy is the behemoth of brick and mortar electronic stores, and it’s a surprise for people to hear Best Buy is closing down 50 selected stores.  Some people think when Best Buy is frantic over losing profitability to online stores and have to reorganize their business model and structure, it’s a telltale sign of the end of brick and mortar stores in general.  I think it’s quite the opposite!  No, I’m not meaning that Best Buy will be OK or not OK, because I don’t know the future!  What I do know is that brick and mortar stores have some advantages over online stores, but some brick and mortar stores are just so underestimating the online competitors or shooting themselves in the foot.

What advantages of brick and mortar stores have over online stores?  Let me mention few examples.  The first example is that brick and mortar stores can sell the products to their customers right away, because the customers don’t have to wait for their products to be shipped to them however many days later.  This is a very important point!  When people want something, they want it quick!  They want to have that wish of theirs to be granted quick, because one more day to wait is one more day to dream about something they want so bad.  When brick and mortar stores fail to cut prices of their products low enough or provide services that are attractive enough, the incentive isn’t there and so the customers might as well measure the pain between waiting for a product online to be shipped or dealing with the headaches of shopping in brick and mortar stores.  I think the main point is to make the advantages of shopping with brick and mortar stores stand out like an oasis in a desert.

Have you heard how postal service might want to save cost by cutting back a day or two for delivering mails and physical packages?  You see, ordering online products can be expensive if the postal service gets less efficient and practical, because the private delivery services can then raise prices as there is one less competitor in the market (i.e., the government).  This is why I think it’s bad idea for postal service to go out of business, but I’ve digressed.  Anyway, brick and mortar stores have the advantage of allowing people to see that they don’t have to deal with the headaches of shipping.  When selling products in brick and mortar stores, the shipping should not even be considered as the part of the business model unless the brick and mortar stores carry products in huge sizes (i.e., that cannot be hauled away by customers’ vehicles).  When shipping has to be included in the brick and mortar business model, the shipping has to be less painful than how customers have to deal with online stores’ delivery services.

Brick and mortar stores have the advantage of allowing the customers just to walk in and return/switch products as long the products aren’t being used past however many days, according to a product return policy.  Online stores’ do allow people to return products, but the wait between the shippings is just not so enticing!  Whenever a business model has a delay variable in it, there is less incentive for the customers to be attracted to such business model.  I think as long brick and mortar stores write good product return policy (i.e., within reasons for both customers and the business), I can see the customers prefer to shop with brick and mortar stores since they can return or switch the products within couple hours.  I don’t think online stores can do that!

Brick and mortar stores should concentrate on providing excellent services.  When I talk about excellent services, I mean the display of the products, the customer service, and the whole nine yard.  You see, online stores only have digital pictures and reviews and testimonies to boost the trust of certain products, but brick and mortar stores have the direct connection to their customers.  It’s befuddled me to see a direct connection to the customers is losing out to something less direct such as digital images and unknown reviews/testimonies.  Sure, popular online stores have the well known brand to back their products, but popular brand names can only back the products so far.  One example of the resiliency of popular brand names is the trust of delivering the products to customers fast and safe, but I don’t think the resiliency of popular brand names can guarantee that the customers will be 100% satisfactory with the products they purchase through online stores.  A direct connection with the customers through brick and mortar stores is instantaneous, therefore the customer service representatives can help solve the customers’ problems right in the stores.  When the customer service representatives fail to help the customers in the stores on a constant basis, how do you expect to have the brick and mortar business that is capable in competing against the super efficient online stores?

Brick and mortar stores can become the showrooms for online stores when prices of the products within the stores are pricing at unreasonable prices!  When the prices of the products are just a tad more expensive than online stores’ products, I think the customers rather buy their products through brick and mortar stores right away since they don’t have to wait for the products to be shipped.  Some popular online stores ship their products super fast, but the customers might just want to carry the products home and try the products out in an hour or two later.  This is why I think brick and mortar stores have to track the prices of online stores so they can price their products competitively.

I don’t go to business school, and yet I’m able to provide few pointers to brick and mortar stores.  How come?  It’s all about common sense I think.  Not to brag, but I think any customer can come up with the same pointers as I had.  Of course, I might have missed many more pointers, but I don’t intent to sit and think so hard on this matter (i.e., I’m not running a brick and mortar store).  In fact, I just want to prove how easy it’s for a customer like me to raise a few pointers in regarding to how to improve brick and mortar stores!  In the end, I think brick and mortar stores can compete against online stores if they do it right!  Plus, brick and mortar stores can also have online presences easily since creating online stores isn’t too hard or expensive nowadays.  What’s better to have an excellent operation going on through brick and mortar stores and then providing even more capable online presence?  That’s a killer combo I think!

Why Do Shoppers Bother With More Than Few Successful Online Stores?

Oxfam online shop advert

Image by net_efekt via Flickr

Why do we even bother to shop at different online stores even though we hardly have to physically move about?  Perhaps, it’s convenient for us to just type another web address into the browser’s address bar, but it is not so pleasant for us to have to land on mediocre online store after mediocre online store, right?  Time in minutes does worth something so to speak.  Also, how can we trust new, mediocre online stores when we have huge online retailers such as Amazon?

Besides the conveniency of visiting online stores and trust factors, what more for us to consider having more online stores would be the way to go?  Perhaps, online shoppers are always onlooking for better online deals?  Obviously, the Internet is making it unbelievable easier to search for better deals than actually move about from one brick and mortar store after another.  Huge online stores such as Amazon makes it even easier, easier for online shoppers to search their stores for great deals of the day, the month, and the year.

Still, the question lingers in my mind is why people even bother to shop at different online stores even though the physical movement isn’t a part of the shopping equation?  Usually, the right sight, smell, taste, and touch of various shopping items might lead to an enhance shopping experience.  Even the smile from a retail clerk and a conversation with a friend in a retail store might lead to unwise spending but a happy shopping experience nonetheless.

Online shopping is way more private, but it can be done with social elements.  I think though, online shoppers prefer shopping in disguise more than announcing what they want to buy to the world.  In brick and mortar stores, shoppers will only have to worry how couple friends or family members with them at the time would know what they want to buy from the get go or how unwisely a purchase they make on the spot, but online shoppers can unwisely allow the whole Facebook know what they have done at what online stores.  Perhaps, announcing to the whole world (i.e., the Internet) of what you have purchased or shopped for is not as pleasant as just having few people around you in a brick and mortar store know what you have purchased or shopped for, right?

What online stores lack can be covered with providing shoppers with extra unique information and great amount of testimonies.  Unique information such as product comparison charts can add more values to online shopping experience than otherwise.  Online testimonies such as product rating and comments from other online shoppers can help online shoppers make their decisions on purchasing whatever online.  You certainly can’t do something as reading countless product testimonies in brick and mortar stores as easy as online stores, but it can be done.  Nonetheless, I don’t see brick and mortar stores have yet installing high tech equipments to allow shoppers to experience something similar to how things go when shopping online.  Of course, they can provide mobile apps to allow brick and mortar stores’ shoppers to experience product rating and testimonies, but this might also require brick and mortar stores to garner certain credible online presences for shoppers to use their mobile apps.

Without further nitpicking the differences between brick and mortar stores and online stores and what are the advantages and disadvantages between the two retail universes have, let me make a bold theory on how the future of online stores might become.  I think, online stores will eventually consolidate into only few big online stores.  Online shoppers do not actually need to venture to different online stores since they can’t really feel that they’re actually sweating from their shopping walkabout of brick and mortar stores.  Online stores aren’t for sightseeing, but these stores are for finding the best deals there are.  With that in mind, I fear mediocre, mid size online stores won’t have a chance of offering as many great saving deals as how bigger online stores can.  I think eventually, only few biggest online stores will stick around, mediocre online stores die out, and unique mom and pop online stores barely survive but survive nonetheless for these might have the ability to offer unique local products that can be found nowhere else.

How about brick and mortar stores of the future?  It might be so obvious that only big online stores such as Amazon would be able to have huge and successful brick and mortar presences.  My prediction for the future of brick and mortar stores will follow a similar pattern to how I’ve foolishly and boldly predicted the pattern of the future of online stores with a twist.  It’s that brick and mortar stores of certain attractive local hangouts and tourist destinations might end up to last with or without the need for a successful online presence.  To end my foolish predictions on retail universes, I have only to say that nobody knows the future, but one can instinctively project one’s thinking of the future of something; in this case of mine, it’s about the future of the retail universes.  (And I could be dead wrong!)

Online Stores Such As Amazon Might Be Eventual Winners In Retail Battles If The Law Allows

English: Amazon Kindle wordmark.

Image via Wikipedia

Some major brick and mortar retailers are worrying how Amazon could best them at their own games by rolling out Price Check app that help customers use their stores as showrooms.  Amazon could always allow customers to see better deals on Amazon through Price Check app.  Furthermore, Amazon could possibly allow customers to purchase products directly on Price Check app, but I don’t know if this is truly possible since I haven’t yet tested the app.  I just say Amazon could do it if they want to.  If they have done so, then that’s exactly my point.  I think this could potentially cripple retailer stores.

Apple Store, North Michigan Avenue, Chicago, IL

Image via Wikipedia

I think Amazon is creating a new trend where more online stores will copy Amazon promotional approach.  We may never know, but if this specific approach becomes so effective, major brick and mortar retailer stores could lose big time.  Perhaps, in the near future, only true online retailer stores (i.e., as big as Amazon or even bigger) could afford to open brick and mortar stores so customers could experience the wall garden experience.

My use of the phrase wall garden is to compare what I mentioned to how Steve Jobs executed his business philosophy.  That is, Steve Jobs preferred in having Apple owned the hardware and software platforms through and through, and he went even further by skipping the third party retailer distributors and built the many brick and mortar Apple stores.  I think the successful existence of brick and mortar Apple stores might be an excellence model for online stores to create the wall garden experience Steve Jobs adamantly worshipped.

I think sooner or later, some smart online stores might program their apps to allow the lowering of product prices on the fly so customers will save money more and the online stores will make more money at a faster rate.  Of course, the algorithms for such apps need to be super smart, otherwise online stores could sell products way below the profitable point and end up lose more money than they would want.  Brick and mortar retailer stores might see this as constant price wars.  Obviously, I don’t think brick and mortar retailer stores can beat this kind of tactics, because such physical stores need to have ways to monitor product prices of online competitors and then change prices in the moments.

I can also see mom and pop stores that serve local communities lose out to online stores if people love to frequently use mobile apps to compare products at physical stores against online stores.  Such phenomenon will drive mom and pop stores out of business.  Perhaps, the future can only embrace brick and mortar stores that truly have big online presences.