Brick-And-Mortar Retail: Death Or Resurrection By Technology?
Evidence mounts that brick-and-mortar retail is in decline. Recent news from three of the nation’s largest retail chains seemed to confirm this: JC Penney announced the closure of 33 stores and the elimination of 2,000 jobs, and Best Buy, after raising hopes with improved performance, saw a punishing 35% stock value decline in the last two days of the week after disappointing sales figures, and most recently Sam’s Club announced the elimination of 2,000 jobs. These damning results follow bad news from Barnes & Noble (sales decline), Macy’s (layoffs), and Loehmann’s (going out of business).
Is it time for traditional retailers to throw in the towel?
Not so fast, says tech giant IBM. In the annual 5-in-5 report — which predicts the five industries that will be most impacted by technological advances in the next five years — IBM claims that in five years, buying local will beat online.
“Local stores will merge digital with the instant gratification of physical retail to offer a more immersive and personalized shopping experience” said Sima Nadler, the IBM Researcher who authored the report. The report goes on to say, “Local stores will bring the web right to where shoppers can touch it, by enhancing the immediacy of physical retail with a magnified digital experience.”
In other words, IBM predicts that physical retail is going to take the technology ball back from e-Commerce and seize the lead.
Let’s go back to what many think of as the beginning of the internet, the 90’s. Back in the 90’s, brick-and-mortar retail stores were much more sophisticated than online channels. In the shopper’s mind, stores understood their needs and catered to them.