Why Brick and Mortar Stores Aren’t Going Anywhere
Brick and Mortar

Why Brick and Mortar Stores Aren’t Going Anywhere

Brick and mortar stores were supposed to be finished. The future of retail is online, industry experts have been saying for a while now. And sure, it’s true that consumer habits have changed, and we all know of traditional retail businesses - large and small - that have suffered from the ‘Amazon effect’. The low margins and convenience of internet shopping have made it seem like just a matter of time until traditional stores were a thing of the past.

Here’s the thing: it mostly hasn’t happened that way. As we head into 2020, the ecommerce sector is hovering at around 12% of total retail sales (Statista). Brick and mortar businesses still dominate the marketplace - and some are even experiencing something of a revival. Think about this: the biggest ecommerce giant of all, Amazon, is now actually opening its own physical locations. Americans clearly aren’t finished shopping the traditional way and understanding the reasons why can tell us a lot about what customers are looking for.

Online Retailers Have Some Built-in Advantages

It’s easy to see why ecommerce has seemed such an unstoppable force. Online shopping is just so simple - consumers can choose from a virtually unlimited selection of everything, without even leaving their homes. And the money online retailers save on overhead they can pass on as savings to customers. As for the biggest natural advantages of brick and mortar stores - being able to actually see what you're buying - ecommerce has an answer, with free delivery and returns. And then there's 'Showrooming' - trying out goods in a store then purchasing them for cheaper prices online. It's hard to see a downside for shoppers, so what keeps people coming back to (and spending money in) brick and mortar stores?

The Power of Experience

The resilience of brick and mortar stores can't be explained by just one factor. Some sectors - like airport retail, currently thriving - just don't translate to ecommerce. Similarly, even though delivery is easier than ever, consumers are still choosing to shop for groceries in-store, where they can check the freshness of perishables for themselves. Online sales make up less than 7% of total U.S. household spending on groceries, according to industry experts Brick Meets Click.

Across all sectors, though, brick and mortar stores maintain one crucial advantage over online shopping - the experience. It doesn't matter whether it's trying on outfits or a weekend trip to the hardware store, shopping is not always just about buying stuff quickly. Sometime, shopping the old fashioned way can be an experience, not unlike hunkering down at your favorite coffee shop and reading a book on a rainy day.

This is especially true for the young (and young-ish). Seventy-two percent of Millennials would rather spend money on experiences not materials goods (Harris Group), and this preference also impacts how they like to buy goods. If a brick and mortar store can make shopping an experience itself, Millennials won't just shop, they'll be prepared to pay a premium.

A Store's Most Valuable Resource

At the heart of making shoppers' experiences special are a retail business's most valuable resource - staff. The knowledge and expertise of those who work in brick and mortar stores - whether they provide advice or just a smile - are what sets them apart from online rivals.

Consumers prefer shopping in stores, but it works the other way around too. Staff at smaller businesses report higher engagement than those who work in large corporations (Dale Carnegie). Working at a small brick and mortar business - and getting to know consumers and their needs firsthand - is going to be more satisfying that being a small cog in a multinational distribution chain. And here’s where it gets really interesting.

A Virtuous Cycle

Higher employee satisfaction is a good thing itself - it raises both productivity and profitability (Gallup).

However, it also raises another important metric… customer satisfaction. A Glassdoor study found that a one-star improvement in employee satisfaction predicted a 1.2% increase in customer satisfaction. For industries like retail with high customer interaction, that turns into a 3.2% increase. Basically, if staff are happier, customers are happier too - and if customers are happier, they’ll keep coming back to brick and mortar stores.

A Future of Bricks and Clicks

The small-store experience is powerful. So, it’s no surprise we’re seeing a new Amazon effect - ecommerce giants opening brick and mortar stores of their own. Omnichannel retail - ‘bricks and clicks’ - offers the best of both worlds. A physical presence allows these companies to humanize their brand identity and give customers memorable shopping experiences, all while maintaining the value and convenience of their online platforms.

Where does this leave small brick and mortar businesses? It brings added competition, sure, but at least it’s now in a marketplace where they are the experts - providing great shopping experiences. And after decades of being told that internet shopping was the future, the news that online stores are now trying to replicate rather than replace the small-store experience, the future for brick and mortar businesses is looking bright.

Bottom Line

Small businesses are only as good as their people. For brick and mortar stores to succeed they need knowledgeable, engaged employees, and great leaders. Learn more about how to engage, grow and develop employees by visiting Paycor’s HR Center of Excellence.


Paycor guided hr software tour

More to Discover

Webinar: Gratitude Webinar Series: 5 Employee Appreciation Ideas Your Workforce Will Love - 11/12 @11am ET

Webinar: Gratitude Webinar Series: 5 Employee Appreciation Ideas Your Workforce Will Love - 11/12 @11am ET

Expressing gratitude or saying "Thank You" may seem simple, but it's a lost art. As HR and business leaders, we have a unique opportunity to recognize the hard work, the sacrifices and the commitment employees put into their jobs each and every day.As we celebrate National Gratitude month in November, this session will offer tips to express gratitude and appreciation for employees in a more effective and meaningful way.Speaker: Colin Ethier As manager of content marketing and HR Researcher, Colin is responsible for creating innovative content and webinar strategies that drive demand and showcase Paycor’s differentiating expertise in the HCM market. Prior to his role in content marketing, Colin supported internal communications at...

Webinar: October Virtual Summit - Winning At Work: How to Help Employees Thrive in the Midst of Pandemic & Change

Webinar: October Virtual Summit - Winning At Work: How to Help Employees Thrive in the Midst of Pandemic & Change

In the midst of so much change in 2020, one thing remains constant: employees depend on HR leaders for support and help. But what happens when you throw virtual workplaces, shutdowns and uncertainty into the mix? For starters you may see a loss in employee motivation and productivity.So, how can you better support employees and help them thrive? Watch this session to find out. Speaker: Joey Price Joey Price is the CEO of Jumpstart:HR, LLC - a Managed HR Services company that was recently highlighted by Inc.com as one of “7 Startups Making Life Easier for Small Business Owners.” He also hosts “Business, Life, and Coffee” a podcast focused on personal development for busy professionals. Joey brings over 10 years of experience in the HR...

Webinar: October Virtual Summit - Maximizing Workplace Health & Safety During a Pandemic

Webinar: October Virtual Summit - Maximizing Workplace Health & Safety During a Pandemic

As businesses reopen their offices and workplaces, employers must act to provide safe and healthy working environments.Join us as Kara Govro, Senior Legal Analyst, discusses safety strategies for offices as well as workplaces open to the public, what to do if an employee has been diagnosed with COVID-19, and what you should be thinking about with respect to sick leave policies. Speaker: Kara Govro Kara Govro is a Senior Legal Editor for Mammoth HR and been with Mammoth HR for over 5 years.

Webinar: October Virtual Summit - Creating a More Diverse and Inclusive Workplace

Webinar: October Virtual Summit - Creating a More Diverse and Inclusive Workplace

To create the best possible workplace culture, we must offer an environment where all individuals are treated fairly and respectfully, have equal access to opportunities and resources and can fully contribute to the organization’s success.It’s not just about feeling better on the job. Research has demonstrated that companies with diverse workforces are more likely to financially outperform national averages. The diversity initiatives of the past have tried to make sure everyone had a seat at the table. That’s a good first step, but much more needs to be done so that everyone feels like they belong at that table.This is the essence of inclusivity. An inclusive environment encompasses all types of diversity, and actively takes steps to...