Tim Kung

The “Retail Apacolypse” continues to strike fear among retailers as more and more traditional retailers struggle or shut down. It’s possible to conclude that the future of brick and mortar is dead. I disagree.

With Mason Park, an e-commerce marketplace I co-founded, we feature independent brick and mortar boutiques to help with e-commerce and discovery. We spend a lot of time walking through retail areas, chatting with business owners, and observing the foot traffic.

Certainly, foot traffic and retail has changed. Shopping online has become a way of life, and the primary shopping method for many people. While many physical retail locations are closing down, within neighborhood commercial areas people are still visiting businesses there and spending money. What’s changed is the nature of when people go into stores and their behavior in the stores.

We found the following as the most common reasons why people will go into a brick and mortar store.

Dropping into the store as part of a broader activity

Often times, neighborhoods can be a destination on their own. Whether it’s for the shops, businesses, parks, events, sights, or other reasons neighborhood commercial areas are often leisure destinations.

In this case, visitors will drop into stores as part of a larger activity. For example, they may want to have brunch at a restaurant and then stroll through the neighborhood exploring the various businesses. Another example would be tourists exploring various areas, where their overall purpose is to explore the area and businesses and which a particular store may be a part of a broader experience, but not the main purpose.

Passing by for a specific task and stopping in

Certain activities may require people to go a particular location. For example, somebody may be on their way to pick up their dry cleaning, or headed to a nail salon. As people are on their way to and from their destination, they may pass businesses and stores which pique their interest and then stop in.

In these cases, there is a specific purpose for the person to be in the vicinity and while they’re passing by or waiting, they may stop into a business. Also people walking past why on their commute may also be triggered to stop into a store and shop. The difference in this scenario is that people are in a more task oriented mindset rather than a leisurely mindset.

Need something quickly and close by

When in urgent need of something, people often resort to purchasing from the quickest and most convenient location. In this case, the store itself matters less than obtaining the item needed. Convenience stores fit this scenario. Boutique retail can also satisfy this need. For example, if someone forgot a tie and needs one immediately for a job interview, or if someone needs to pick up a last minute gift as they’re headed to a party, speed and convenience becomes the most important factors in choosing where to buy from. Buying online isn’t an option and people will head into a store to grab the item needed.

A great example of this are the various gift and wine shops you can find in near corporate offices in downtown San Francisco. The stores are often only open during standard business hours on weekdays and often closed on weekends.

Going to the store for a specific reason

In this case, a shopper visits a store with a specific purpose to visit that store. For example, a customer may be looking for a specific brand or product carried by the retailer, or the customer may be going there for an event.

Incentives (coupons, sales) may also bring customers to the store. In this case, the customer has a purpose with their visit and not just dropping in due to proximity or as part of a larger activity.

I’d suggest that overall foot traffic in commercial neighborhoods has not changed, but rather the behavior of the foot traffic. In San Francisco, this can be evident by the growth of fitness studios in areas once mostly populated by retail.

What does this mean for brick and mortar retailers?

Assuming a business wishes to grow beyond just the convenience factor, smart businesses will need to adapt to the new way of shopping and foot traffic.

Here are two recommendations:

Cater the experience to people who are in the area and passing by

Give people a way to experience the store personality and have their interest piqued by products, while also being able to purchase instore or online.

A store can also been seen as a showroom, customers can learn about products in person, and then purchase later online. Given people are often in curious and not purposeful mindsets, design the store so that it is welcoming and enjoyable to experience.

A great example of this are Warby Parker stores. People can come in and experience the products, the stores are welcoming and have a comfortable feel, and the staff is non-intrusive.  At the same time, all of the products can be purchased online or instore. Other retailers such as Bonobos has taken this concept even further where their brick and mortar stores serve as showrooms only and all purchases are done online.

Conduct targeted online marketing to resonate with the right customers

The best independent boutiques have a strong personality/brand and speaks strongly to their core audience. Instead of relying on passerby foot traffic, online marketing enables boutiques to reach a more of their core audience.

This audience would be able to shop online and then could be enticed to go into the store for a specific purpose. I’ve seen artist driven boutiques focus on in-store events and workshops, which resonate with the customer base. Others offer discounts to a customers who may be more price sensitive.

A great example I love is that Uniqlo offers inexpensive and fast alterations on pants purchased. Because of this, I often pick up my online orders in store and have the pants measured and dropped off for alterations immediately. I couldn’t get this via an online only experience, and I happily go into the store – where I often end up buying a few more items.

The “Retail Apocalypse” is entirely real and I believe many brick and mortar and traditional retailers will continue to suffer. For the savvy businesses, and especially those already in commercial neighborhoods, the challenge becomes how soon can they adapt to the new way of in-store shopping.