Amazon vs. Brick-and-Mortar Retail: Who Wins the Future?

Introduction: The Retail Landscape Shifts

Cyber Monday came and went this week in America — and it was the biggest shopping day of the year. More people logged onto their computers to make purchases than went out on Black Friday, the traditional day for shop-till-you-drop purchasing. The torch was passed: online retailer Amazon's stock soared, as reported by Durden at ZeroHedge, with the finding that the online retailer had trounced its brick-and-mortar competition. Brick-and-mortar store traffic fell by 1% from the previous year, while online purchasing rose by 17% (Durden). If anyone had any doubts about it, brick-and-mortar retail is on the ropes, and the online giant Amazon is poised to defeat its competition with a stunning knockout.

Why Online Shopping Is Winning

The specific problems plaguing traditional brick-and-mortar stores stem from the simple fact that it is easier for consumers to log on and check out with the click of a button. Amazon Prime has given consumers the option of fast delivery — anywhere from two days to one hour, depending on the item purchased. Consumers are willing to pay a premium for this service because there are additional incentives to Prime membership as well: access to films, television shows, and music that can all be streamed online.

Furthermore, Amazon delivers more than just products like movies, televisions, computers, and books — it is also in the grocery-delivery business. With the online giant's recent acquisition of Whole Foods, the go-to destination for online shopping expanded into the grocery industry as well. This leaves consumers with little incentive to leave the house: one must face traffic, crowds, the possibility that a desired item is out of stock, the hassle of finding a parking space, and the burden of braving the weather. In the digital age, where virtually everything can be purchased online and delivered straight to the door, there is less and less reason for anyone to choose a brick-and-mortar retailer.

The Experience Economy: A Path Forward for Physical Stores

As Freedman points out, brick-and-mortar stores must rethink the way they appeal to consumers. Since online retailers offer products with greater convenience, physical retailers must offer something that Amazon cannot: Freedman calls it "the experience." For brick-and-mortar retailers to renew consumer interest, they must sell not just a product but an experience — a compelling reason to get up and leave the house. Whether this means installing a coffee or bourbon bar in the store, hosting live music, or treating every customer like royalty upon entry, brick-and-mortar retailers must be unique in their approach to shoppers. Simply offering a product that can more easily be purchased online is no longer enough to drive foot traffic. Consumers want to be wined and dined.

Conclusion

In conclusion, Amazon appears to have disrupted brick-and-mortar stores by offering consumers a far more convenient way to shop. However, if physical stores can offer consumers a richer, more engaging experience, they may be able to win back a portion of their lost market share. Then again, if brick-and-mortar retailers ultimately find themselves in the business of selling services rather than products, it may be that Amazon has already won the war for product retail.

Works Cited

Durden, Tyler. "Amazon Soars On Report Of 'Unbelievable' Online Sales As Channel Checks Show Store Traffic Down 1%." ZeroHedge, 27 Nov. 2017. http://www.zerohedge.com/news/2017-11-27/amazon-soars-report-unbelievable-online-sales-channel-checks-show-store-traffic-down

Freedman, Daniel. "Bricks, Mortar — and Experiences." Editorial. Wall Street Journal, 20 Aug. 2017. https://www.wsj.com/articles/bricks-mortarand-experiences