Retail Isn't Dead … But Digital Marketers Still Need to Adapt
Debates flare and facts fly when talking about brick-and-mortar retail. Some experts say it's reached its end. Within the past year alone, 18 retailers have declared bankruptcy. National brands from Ralph Lauren and BCBG Max Azria to Payless and Sears have closed thousands of stores across the United States.
Others, however, say brick-and-mortar sales are going strong, despite a slowdown. Even in the face of bankruptcies and store closures, the retail sector has seen positive growth this year. Revenues are up about 4 percent in 2017, and the holiday season has yet to arrive. Brick-and-mortar store revenues are projected to grow by 2.8 percent by the end of this year. Within the totality of retail sales, e-commerce still only makes up less than 10 percent of a company’s revenue.
So, has retail truly died, or has the rise of online shopping simply overshadowed brick-and-mortar retail’s previous claim on American shoppers?
Although physical store sales are predicted to increase this year, e-commerce sales are expected to rise an overpowering 8 percent to 12 percent this year. Within this growth, mobile shopping comprises 20 percent of purchases. From 2010 to 2016, Amazon.com's sales rose from $16 billion to $80 billion. Looking at the grand picture, nearly half of all physical purchases have been impacted in some way by the digital shopping sphere. While in-person retail has undergone a steady rise, online shopping has soared.
The convenience of online shopping has garnered more and more loyal customers. People no longer have to battle crowds at a mall or wait in long lines at big-box stores to purchase items. With the rising popularity of consolidated platforms like Amazon, easy-to-use mobile apps and online-exclusive brands, consumers can purchase everything they desire with a few simple clicks (or taps). And the goods come within hours or days.
What does all of this mean for that quaint brick-and-mortar store on the corner of your street?
Retail ads — more specifically, location-targeted mobile ads — now hold a tremendous amount of importance in bringing customers to physical stores. In 2016, Facebook announced a locally driven ad that lets individuals know what stores are in their current area. Facebook is tailoring retail ads for the user and brick-and-mortar store’s location. These dynamic ads showcase a store’s proximity along with available products at that specific location. Included in the ad is the offline conversions API tool, which measures the rate of online to in-store purchases. Abercrombie & Fitch, Macy’s, Pottery Barn, Argos and Target have been testing these dynamic ads in an effort to increase sales.
Given this industrywide shift, digital marketers may feel caught in the middle of trying to boost a client’s website traffic and encouraging a consumer to make an in-store purchase. But we can't forget the ultimate goal: having a shopper buy a product or service. Whether it's in-store or online, we can do that by using analytics from digital intelligence platforms to build strategies for pay-per-click advertising, social media and email campaigns.
So, is brick-and-mortar retail dead? The answer is no. However, with the meteoric impact of online shopping, a new question has surfaced: How soon will it be before e-commerce becomes consumers’ primary way to shop?
Michael Mothner is the founder and CEO of Wpromote, the largest independent marketing agency in the U.S.
Michael Mothner is the Founder and CEO of Wpromote, the largest independent marketing agency in the US. Along with founding Wpromote in 2001, he has also ventured into other enterprises such as ScanDigital and CouponPal, which was spun off of Wpromote’s performance marketing division into an independent company. A regular industry speaker and commentator, he has been featured by Inc. Magazine as one of "30 CEOs under 30 To Watch" and was the recipient of the PricewaterhouseCoopers Entrepreneurial Spirit Award.