Inspiration
December 10, 2020

Does the Rise of E-Commerce Mean the End of Brick and Mortar Stores?

How brick and mortar electronics stores can innovate and create a simplified, captivating customer experience to play a major part in the future of retail.

Over the past few years, more and more experts have been predicting the demise of the brick and mortar store. Amazon, Alibaba, Rakuten, and other online giants were said to be slowly dismantling these stores of yesteryear. For every click, down came another brick, and the downfall of the retail store, we were told, was imminent.

Then came 2020 – the year the world turned upside down. The year that would finish off brick and mortar stores for good. 

Or would it?

The End of Brick and Mortar Stores?

The raw data would certainly suggest so. A recent study of consumer habits in the time of COVID-19 shows that online retail sales have increased by 30%, while total retail sales have dropped by 17.9%.

And it’s not just the small retailers, but the big players that are in trouble. Europe’s largest electronics retailer, Ceconomy – who operates the chains Media Markt and Saturn – have applied for funding from German state bank KfW to mitigate the impact of the COVID-19 pandemic.

Meanwhile, the UK’s biggest electronics retailer and Europe’s fourth-largest, Dixons Retail, has seen its profits sliced by more than half

It’s not all down to COVID-19 though. European in-store retail had been suffering before the pandemic, with a turnover growth of only 1.9% in the whole of Western Europe in 2019 (compared to the 20% growth of e-commerce in the same year).

So, is this the end of the electronics store as we know it?

Well, surprisingly... no. While it might seem like the final chapter for consumer electronics brick and mortar stores, their story isn’t over yet. 

And there might just be a twist in the tale.

The Rise of the E-commerce Goliaths

making-an-online-purchase-via-laptop-and-credit-card

Since it started life in a garage in Seattle in 1994, Amazon has gone on to become the biggest retailer in the world. In doing so, it has completely redefined retail and reshaped consumer experience. 

And while it’s evolved to become much more than just an online retail company, around half of its €270 billion total revenue (June 2019 – June 2020) comes from its online stores. To put this in perspective, its 12-month e-commerce revenue is higher than the entire GDP of Hungary in 2019.

Amazon has been the main driver behind this big shift in the way we shop. But it’s not just them – electronics companies like Alibaba, Rakuten, and Jingdong in Asia, and e-commerce firms like Otto and Zalando in Europe, B2W and MercadoLibre in South America, and eBay in the US, have all had a major impact, both within their respective regions and on a global scale. 

In fact, online retail in general has been steadily on the rise for years and shows no sign of stopping. Between 2017 and 2020, online retail revenue has increased by more than 50%. In 2017, online retail had just a 10% share of overall retail sales. By 2023, this number is tipped to reach 22%.

And as around 4.5 billion people (60% of the Earth’s population) now have access to the internet, it makes sense that e-commerce continues to go from strength to strength. 

Why Brick and Mortar Stores Won’t Disappear

customers testing vr technology and drones in a consumer electronics store

Despite the massive growth of online retail in recent years, brick and mortar stores still offer something that can’t be replicated online: the tangible experience of shopping in a store. 

For many consumers, to shop is to take part in something special: to browse and try things out; to see, touch, and feel; to take part in a sensory experience that, since the early part of the 20th century has been the cornerstone of the retail experience.

This is especially important in the electronic goods industry, where holding a mobile phone or tablet to get a feel for them or testing out a camera or computer for quality and functionality has always been a key part of the customer journey. To suggest that this experience will be fully replaced by e-commerce is jumping the gun.

E-commerce has indeed seen a massive increase in recent years. But it still only accounts for 16.1% of total retail sales. This means that, while it’s making a big impact on the way we shop, it’s not quite the seismic impact that some might have you believe.

So, brick and mortar stores are guaranteed a great future then? 

Well, not exactly. Brick and mortar electronics stores are going to have to adapt, innovate, and completely rewrite many of their key philosophies if they are to survive and, more importantly, thrive in the digital era.

How Brick and Mortar Stores Can Still Be Relevant

Let’s take a look at some of the ways consumer electronics brick and mortar stores can remain relevant for consumers for years to come.   

how consumer electronics brick and mortar stores can thrive in the future - TechBuddy infographic

Take Advantage of the Tangible Aspect of In-store Shopping

In recent years, consumer expectations have changed massively. They want a faster, more seamless, and stress-free shopping experience. But some things hardly ever change. 

While technology already exists that enables consumers to ‘virtually’ try a product, it still doesn’t hold a candle to the real thing. Brick and mortar stores still have the upper hand when it comes to checking out products first hand.

A survey conducted before the pandemic by Retaildive found that 56% of online shoppers visit a brick and mortar store to get a feel for a product before making the purchase online. 

Yes, these customers still bought the product online. But this points to a very real advantage for brick and mortar stores and signifies that, if they can improve the in-store UX, the customer will not need to go online when they can easily complete the purchase in-store.

At the moment, in-store purchasing is not always easy though. Long queues at purchase points are one of the major drawbacks of the in-store shopping experience. While, in theory, the solution seems to be simple – 34% of European consumers see automated checkouts as the key to a better in-store experience – implementation is another matter altogether.

Create an Omnichannel Experience

Then again, maybe there’s no need for checkouts at all. Maybe creating an ‘omnichannel’ experience is the way to go. This means creating a seamless blend of the best of both worlds – online and offline – for the ultimate shopping experience. 

Imagine this: you pick up on an exciting new tech product on social media and decide you want to visit the local brick and mortar store to see what it’s all about. In the shop, you’re able to see, touch, and try the product before you commit to buying it, as well as getting advice from the in-store experts.

Then, once you decide to buy, you scan the product with your phone to complete the purchase. You choose your delivery slot, input your details (if you’re a member this would be automatic through the store’s app), confirm your payment option and that’s it. You could even have the item waiting for you when you get home.

This kind of tangible, yet frictionless shopping experience will be the central tenet to the future of brick and mortar stores. 

Captivate the Customer With a Memorable Experience

From simplification to captivation. While one of the key elements to recapturing the public’s imagination is to get the simple things right, another is to take the shopping experience to a whole new level.

A little bit of magic goes a long way. When you think of the creation of the big department stores in New York in the mid-19th century, people were blown away by the sheer excitement of the shopping experience. Huge spaces, artful decorative displays with vivid colors, and an endless array of products, many of which people had never seen before.

Now brick and mortar electronics stores need to create some magic fit for the 21st-century consumer. Through the adoption of new technologies such as virtual reality and augmented reality, and the creation of Instagram-worthy interiors, retailers can create captivating, personalized, and memorable in-store experiences that pull consumers into their brand story.

Enhance the Customer Journey

TechBuddy explaining to father and son how to use new tablet

One of the key areas of consumer experience is after-sales care and services. It’s an area that brick and mortar stores need to focus on improving if they are to stay relevant.

A recent Hubspot study found that 93% of customers are likely to make repeat purchases with companies who offer excellent customer service, including after-care.

The method of customer service is important too. A Microsoft study found that 30% of consumers say not being able to reach a real human is the most frustrating part of a bad customer service experience.

Through collaboration with tech support providers that use specialized digital platforms for on-demand and on-site support like BuddyCompany, consumer electronics brick and mortar stores can evolve to create an after-care service that blends the best of online technology and personalized face-to-face customer support

It’s all part of the omnichannel retail experience. Through the BuddyCompany app or website, consumers have access to in-person assistance from a Buddy – a personable expert sitting down with them in their own home to address their specific needs.

The personal connection is crucial, particularly in this increasingly digitized world. And it’s that personal after-care service that will linger in the customers’ minds and make them come back next time.

Innovative Brick and Mortar Stores Will Play a Key Role in the Future of Retail

Brick and mortar retailers already have a unique advantage, with the timeless appeal of the tangible in-store experience. If they can build on that experience by taking the best aspects of e-commerce – innovative technology, streamlined processes, and intuitive design – and go the extra mile by bringing personalized tech support into the hearts and homes of customers, they’ll have a winning formula for years to come. 


Find out more about how BuddyCompany can help your business reshape your customer experience.

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