Web vs. Brick and Mortar

All successful retailers want to grow. But how many want to own a brick and mortar retail operation these days, especially if they are already enjoying the efficiencies and "clean room" advantages of an online retail presence?

The answer is that plenty do, and for very good reasons. The majority of consumers still need to feel and touch the goods and interact with an enthusiastic and knowledgeable sales staff. Within brighter, well designed environments, from lifestyle or town centers to new urban platforms, consumers are enjoying the social aspects of shopping more than ever these days.

Thus, while the story of brick and mortar retailers migrating to the web is well told, consider the reverse: online retailers who are making their way into the physical world of regular price retail locations. There are pioneers, such as Brookstone, Gateway and Lands End's, "Store within a store strategies." Some stalled and stumbled along the way.

Others were smashing successes. Among them is Cabela's, the outpost of hunting and fishing enthusiasts. Also consider the Apple Store, where sales per square foot approaches $4,000.

Overall, the jury may still be out on the wisdom of going to bricks and mortar. Some will do better than others, as in any form of business endeavor. However, look for more and more contestants in this retail game, for online or catalog firms will continue to be a rich source of new store concepts and consumers will welcome this move.

The reason is simple. The successful online or catalog operator already has an established identity and track record, along with a well defined customer base. What better way to jumpstart cash registers?

Understanding must precede execution. Each retailer must know why it is "going physical" and fit this new venue within its overall business and growth strategies. There can be many reasons for doing so, such as:

• Establishing brand awareness through a marquee or flagship store. Expanding customer service for such necessities as pickups, repair and returns. Supplementing the customer experience by affording contact with the merchandise. Fulfilling the sense that one must complete the customer access trio of online, catalog and store to be competitive. One example is the recent entry in retail locations by Snapfish, the well established online photo processing operator.
• Utilizing the most logical path to expansion.

The last is the most realistic or typical in today's retail environment, where more market share is the ultimate prize. The reasons for opening stores may vary by retail category. Their competitive niches and the experiences of their peer group guide businesses. Whatever the type of goods being sold, the online or catalog retailer is endowed with great customer data; a wonderful and rational security blanket for the winds of commerce. The wisest path to the transition is to mine that data for all it is worth, identifying where current customers are located and where future ones may be, based on demographics and psychographics. Many retailers have adroitly followed this safe and smart path to bricks and mortar retail.

That doesn't mean online merchants can't have some fun, placing a store here and a store there. There have been many pleasant surprises, and more are likely to occur.

Apple, for example, may have begun its retail stores to generate buzz about the brand and new models. Maybe Steve Jobs just wanted to see the Apple name in mall lights.

But look what has transpired. The Apple Store is now one of the most sought after tenants by retail developers. Of course, iPod mania didn't hurt. And hasn't Cabela's been able to capture what every other physical retailer has struggled with, getting men to spend quality time shopping?

In retrospect, it seems that it was easy for Apple. There may be accidental empires in the software world, but there are few in retail. Apple understood from the start that it couldn't be all things to all people.

It targeted the experience for the technologically inclined and carried through by hiring young, enthusiastic and knowledgeable staff people. In many respects, online (and catalog) retail is a magic act. The online experience is backed by exceptional systems of credit card verification, inventory management, distribution and fulfillment, in addition to marketing savvy.

Whether the customer lingers to read all the user reviews on Amazon.com before buying a DVD or ink jet cartridges from Quill.com, he or she pushes a button and the merchandise just appears, often the next day. It's fun to browse in a book store, but nothing could be faster or easier than buying a book on Abebooks.com. Abebooks, incidentally, now has overseas sites much like eBay. Could a new form of the used bookstore be far behind?

A store is something else. There are complex relationships with retail landlords, leasing agents, and co-tenants to consider, positioning within a center, vehicular and pedestrian traffic patterns and signage. Are you being asked to drive shoppers to a center or coming along for the ride?

At the store level, the key is reinforcing the experience and reputation the retailer has already established online or with a catalog. A staffer more interested in chatting with friends dropping by can squash the most sterling identity. If anything, the store should get its customers to think: "That's exactly what I thought the store should be like," then take the experience at least one step beyond. The surest route to succeeding with a physical store lies in profiling the internet customer and finding out where those people live throughout the country. These demographic pockets are where the online retailer should open its first stores.

By remaining true to one's customer or interest base, it is much easier to remain true to oneself. Slow and steady, opening stores with the same logic that has guided well all types of retailers, should win the virtual to real retail race. In the process, the retailer can generate even greater enthusiasm and customer loyalty for its approach and appeal to consumers.

This article was excerpted and edited from a story by Jeff Green, president and chief executive officer of Jeff Green Partners, a retail consulting firm based in Mill Valley, CA. The article first appeared on GlobeSt.com/retail.