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How Brick and Mortar Retail Stores Can Survive in an Online World of Shoppers ...by Bill Knell

Nationwide chains like Best Buy and local mom and pop retail stores are facing a common and unfortunate business reality. People are coming into their stores to view and try out new items, then leaving to order the same product online from competitors offering better prices. While this may be a new problem, it might have an old solution.

Back in the early 1980s stores like Walmart, Kmart and Consumers Distributing began to take a huge bit out of the retail market. Walmart and Kmart did it by undercutting the prices charged by competitors, while Consumers Distributing offered a number of discount priced, popular products which people could order by mail, buy over the phone or instantly purchase at about five hundred catalog stores located throughout the USA and Canada.

The fact that Consumers Distributing combined catalog sales with brick and mortar locations in the J.C. Penny and Sears model was not new. Their hook was that they didn't sell everything, just the most popular items that consumers wanted. Those items were sold at terrific discounts in catalog show rooms designed with the goal of getting customers in and out fast. Their downfall was that the show room model they developed for speedy customer service never actually worked in many locations and some of the most popular or highly discounted items available in the catalog were habitually out of stock in their stores.

The novelty of the C.D. business model and their low prices kept them alive for many years with customers willing to wait to get a good deal, but customers eventually got tired of the notoriously long lines, slow service and finding so many products out of stock in their catalog show rooms. Consumers Distributing ceased to exist in 1996, but they left a legacy that we can learn from and update.

Instead of offering everything, large and small retail stores should consider scaling back to new and hot products that really fly off the shelves. On-line ordering offered in-store is another essential. Allow the option for customers to sit down at a designated computer station, browse your web site and place orders that can be filled through shipping or in-store pick up. Less stuff means less staff and overhead. That should allow real world retail locations to lower their prices and help them to compete more successfully with on-line web sites offering discounts and brick and mortar mega-sellers like Walmart.

The key is stock, speed and service. Have what you offer online in stock and get customers in and out of your doors fast. Too many stores have purchasing stations and systems that are geared to their own accounting and inventory needs, not to moving customers rapidly through the purchasing and check out process. You can also build customer loyalty by creatively bundling products together, offering exclusive deals or items and in-store amenities.

There is little doubt that virtual shopping might eventually mean the near death of most brick and mortar retail locations, but until that day comes there are still ways to successfully compete. The upside to real world retail is that consumer satisfaction with online shopping is not anywhere near what it ought to be. Everything is fine until something goes wrong, an item is damaged in shipping or you need to return it. People get frustrated by having to email customer service a thousand times or spend an hour or two on the phone choosing any one of a hundred options before they get to talk to a real person.

Real world stores can prosper through customer connectivity and product creativity. They can survive and thrive by offering on-line ordering in store, making sure all the products they sell are in stock and ready to go, having a user friendly web site and keeping it constantly updated, and making customer service job one. The day of the tired and annoyed salesperson or snotty cashier are over. Anyone that wants to get and keep a job in real world retail has to think of themselves as a partner in the business where they work.

Real world stores can add to their appeal by offering everything from snack stations and free refreshments to supervised child play rooms or areas and free product demonstration classes or seminars. Customer service experts should always be available to instantly answer questions or handle and solve any problems that pop up. Gift wrapping, local delivery and other customer amenities can also help to boost sales, cement consumer loyalty and bring in new customers through word of mouth.

Part of serving the customer well and profiting from creativity is linking up with other local businesses by offering them the opportunity to market their services or non-competing products in your store for a fee or commission. The more reasons you give a consumer to enter your store, the better chance you will have to sell something and keep the lights on while making a profit and growing your business.


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