E-Commerce Needs Real Store Locations Now More Than Ever

From The Wall Street Journal:

After losing ground to e-commerce, bricks-and-mortar stores are back in style.

Retailers this year are expected to open more stores than they close for the first time since 2017, according to an analysis of more than 900 chains by IHL Group, a research and advisory company. Most of the growth is coming from mass merchants, food, drugs and convenience chains.

Department stores and specialty retailers, which experienced the biggest shakeout over the past five years, are still closing more stores than they are opening. But the pace of closures has slowed from record levels.

Behind the shift are changing views about the value of physical stores, industry executives and analysts said.

Stores have become integral in fulfilling e-commerce orders. They serve as distribution hubs and convenient places for shoppers to pick up and return online purchases—services that will be key this holiday season as orders once again threaten to overwhelm shipping carriers.

As the cost of acquiring customers online has skyrocketed, stores also are a less expensive way to attract new shoppers. And as landlords have become more willing to accept shorter and more flexible lease terms, retailers are less likely to wind up locked into unproductive locations, the executives and analysts said.

“Five or six years ago, there was lots of discussion about whether e-commerce would gobble up bricks-and-mortar retail,” said Toni Roeller, senior vice president of in-store environment and visual merchandising at Dick’s Sporting Goods Inc. Instead, she said, the online and store experience became more closely linked, which translated into a need for more stores.

The stores that retailers are opening today are different. Some are smaller, and more of them offer experiences beyond browsing.

Dick’s is adding to its fleet of more than 800 stores by opening newer concepts that include House of Sport, Public Lands and Golf Galaxy stores that have interactive features such as batting cages, rock-climbing walls and putting greens. It also has added some of those features to its namesake Dick’s stores.

Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)

8 thoughts on “E-Commerce Needs Real Store Locations Now More Than Ever”

  1. “Retailers this year are expected to open more stores than they close for the first time since 2017,”

    How much of that is because of 2020 shoving pretty much every store that was teetering on the edge over the cliff?

    • 100%. 😀
      But the desperate grasp at straws.

      The pandemic isn’t over. The worst part–the fear of the unknown stoked by fear peddlers–is over. We have data now. We have treatments. And in places where IdiotPoliticians™ didn’t *create* resistance with heavy handed policies, vaccination is approaching 90%. And the processes to manage the disease are emerging: early detection of mutants, travel restrictions when in doubt, and above all, the mRNA vaccines. Both develops havd recently announced they now have in-house methodology in place to get updated vaccines out in 100 days *if* a resistant strain should emerge. Which hasn’t. Not yet.
      All good news.
      But the OP folks are pining for a “normal” that isn’t coming back.
      People have adapted and learned.
      From the lockdowns. From the fits-and-starts restarts. From the results of IdiotPoliticians™ ideological strategic overreach.

      Online shopping can be reliable. Cheaper than B&M. With more varied inventories.
      Just-in-time logistics are fragile, at both the business and the consumer level.
      And, regardless of the FUD from thd ideologically driven, size is a *plus*. The other piece hefe listing how Amazon has worked around the (avoidable) supply chain issues aren’t unique to Bezos-land; most of the big, successful chains have done most, if not all, the same and similar things. Leasing dedicated shipments, rerouting shipments, adjusting production, diversifying the supply chain? Absorbing bonuses, inflation, and higher pay? Not cheap. Not easy. Amazon did it. Costco. Home Depot. The dozen or so big players with smart agile management. Small fry? Not an option.
      The retail apocalypse is ongoing, cheerleaders notwithstanding.

      (Now add higher security and insurance costs.)

      • My informal survey noted overflowing parking lots on Black Friday. Last year, the same survey saw dismal usage. This is in a state without any virus restrictions. So, I wonder if people just want to get out. Football games, stores, etc. Is it possible there will be a new appreciation of the total shopping experience?

        • Sure, it is possible.
          Especially during peak shopping season.
          With USPS reliability in doubt.
          Let’s see how the pent up demand holds up after the new normal settles in.

          For example…
          Omicron is coming. With an infection ratio of 2.0. (Each infected spreads it to two.) Good news is it appears to be less deadly to the young and healthy. But the way the media hyperventilates…

          And among the latest smash and grab flash crowds, they hit HOME DEPOT. They’ve expanded to suburbs. And several of the mobs featured minors. And a couple used chemicals on staff and bystanders. Plus they killed a security guard.
          They’re evolving.

          Let’s wait a bit to see how retailers respond. Shatterproof windows? Airlock doorways with metal detectors? And how shoppers respond to that. It’s a fluid environment.

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