FUTURE OF RETAIL: BLEND OF WEB AND BRICKS?

BY JEN KHEDAROO

As online shopping continues to soar, there continues to be panic surrounding the future of brick-and-mortar shops. But John Scaturro, senior manager of marketing at Queens Center Mall, is looking at the situation differently.

Instead of having to choose one or the other, Scaturro embraces the strategy of using aspects of both online and physical locations for the best shopping experience.

Decades ago, the local mall was the center of the shopping experience, a place where sometime as many as 100 retailers had a presence. The model today is similar, Scaturro argues, the difference being the emergence of the shopping convenience of the Internet.

“A lot of stuff is still being sold to people, it’s just being sold in different ways,” he explained. “Retail isn’t hurting. Americans are still buying things like crazy, but what’s changing is how are people making those purchases and how they are finding those products.”

In response to the growing prevalence of online shopping, more and more retailers are using Omnichannel methods to reach customers. The Omnichannel approach contends that a customer values the ability to connect with a company on multiple platforms at the same time.

In other words, it’s no longer a choice between selling products in a store or online, it’s about fusing the two.

“There are retailers who started out exclusively online that are now looking to open stores, and there are retailers that have been traditionally stores that are now selling product online,” Scaturro said. “Now there are all these combinations that blend the online retail world and the brick-and-mortar stores.”

And it goes beyond the choice of just buying in a store or online. Shoppers now have options like buying online and picking up at the store, or buying online and returning it to a store, to name two.

But there are challenges. If a customer orders online and chooses to pickup in store, does the store receive credit for that sale? Does a particular store location get penalized if a customer returns an item purchased online? Many retailers are still trying to work out these nuances.

“It’s all starting to shake out and retailers are trying to figure out how it all works,” Scaturro said.

Whereas companies such as Amazon have distribution centers around the country, other retailers can use the inventory in their physical stores to deliver to online shoppers. This ship-from-store trend allows retailers to evolve and adapt to the digital retail world.

“If you go online and you order something, the computer says they have the product in that color and size, but it happens to be at the Queens Center Mall store and then they ship it to the customer,” he said. “If you order something from Foot Locker, for example, it can come from the Foot Locker store at the mall.”

In this scenario, store employees have the responsibility of pulling items from the shelves and packing and shipping them off to customers. Essentially, the stores become the retailer’s distribution or fulfillment centers.

“The ‘XYZ’ retailer may have 400 store locations around the country with product in it that they sell, and if those stores have 10 or 12 orders in a day, it’s not a big deal, they just knock it out in the back room,” he said. “It helps with sales.”

Retailers that have both physical stores and an online presence are more likely to succeed because of easier inventory forecasting, higher sales, lower costs and faster delivery times. While selling online is new, the concept isn’t. Years ago, people shopped by browsing and buying through catalogs. Today’s system is faster, however, and is made even quicker with the ship-from-store option.