Harmonic Retail™ Truth #1

HARMONIC RETAIL â„¢

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TRUTH

E-commerce needs brick & mortar like beer bottles need koozies on hot summer days.

TRUTH#

E-commerce needs brick like beer bottles need koozies on hot summer days.

For the first time in history, the total U.S. market share of online retail sales was higher than in-store general merchandise sales, according to the 2019 U.S. Commerce Department report.

But by no means does this herald the death of brick and mortar.

On the contrary, a physical presence is essential to all aspects of retail, especially online sales.

SEEING IS BELIEVING:

Stores are a critical piece of a Harmonic Retail™ ecosystem. Consumers are more likely to purchase a product or service if they can put a “face” to the brand.

A physical presence enables people to see a brand or retailer in real life, gaining a level of trust not often attained through online only interactions.

EXCELLING AT UPSELLING:

Casper brick and mortar: Co-merchandising accessory products like sheets, pillows and glow lights.

Brick and mortar helps to demonstrate and sell complex products, such as mattresses. Companies like Casper have done an excellent job getting consumers over the “I need to try it” hurdle.

But Casper is discovering it is easier to sell the pricier models and get shoppers to buy into lifestyle products such as sheets and home goods from a physical store. Online is notoriously bad with product upsell while real world stores excel.

A LIVING LAB:

Stores also offer brands and retailers an important face-to-face assessment of how merchandizing drives sales and a regular forum to speak with customers about their experience — an ongoing focus group with the benefit of real-time product interactions.

Brick and Mortar

& mortar SYMBIOTIC RELATIONSHIP:

Most importantly, brick and mortar creates a halo effect that drives online purchases.

“Customers find having a physical store near them gives all the confidence they need to purchase online,” said Joe Alexander, founder and CEO of Nest Bedding, who saw a 15 percent increase in online sales in the cities that host its 10 stores, over cities without stores.2

Nest Bedding: Redesigned brick & mortar to mimic website.

Italian leather shoe company M. Gemi saw a 20% lift1 in online sales in Boston and New York, where it owns three shops, compared to cities with no physical presence. Fashion accessories store Cuyana saw a 50% uptick in digital sales in cities where it has stores and pop-ups over sales in digital only markets.

M. Gemi & Cuyana online sales spike in cities with brick & mortar presence.

Cuyana

Conversely, online sales decline in markets where stores close. The Gap saw a 9.5% decrease in online sales where stores were closed. A department store chain’s web traffic fell 7.9%2 after a store closure; and local traffic to a home-goods retailer’s website fell 16.4%2 after a location went dark, according to an ICSC market report.

And T he positive effects of brick and mortar can think be achieved through myriad forms – small large stores, showrooms, pop-ups, outside stores, shop-in-shops and vending kiosks all attain the box. similar trust benefits and online lift.

M.Gemi

Harmonic Retail™ means adding to, refining and connecting the tools in your retail toolbox to create a responsive shopping ecosystem. Where omnichannel asks customers to adapt their journey to fit the channel, and changing channels often means starting over, Harmonic Retail™ flexes to stay in tune with each shopper’s unique needs.

r is one of the most important harmonic tools in retail.

SOURCES: 1Digiday: Shoppable Billboards, 2018.

International Council of Shopping Centers, 2020

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DeAnn Campbell VP, Research & Design About DeAnn: With a degree in Architecture and 20+ years of experience in retail strategy, design and implementation, DeAnn’s role is to maintain long-term, forward-looking knowledge of the retail industry to align Harbor’s solutions with the industry landscape, the consumer, our clients’ competitors, and to support and advance client strategic goals. DeAnn has worked with a wide range of global Fortune 500 Brands and retailers, including Unilever, Pfizer, Aramark, IBM, J&J, Canadian Tire, Hudson Bay Co., Loblaws, Walgreens, CVS and more.

You can read DeAnn’s insights and provocative point of view on the future of retail often in Forbes, Retailer Insider, Total Retail, Retail Customer Experience & Internet Retailer.

www.HarborRetail.com

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