Why Are Online Retailers Adding Brick And Mortar Stores?

We assume that online shopping is convenient and customer friendly. However, surprisingly, in 2018, online sales represented only 11.9% of the world-wide retail market. 82.5% of all sales are still predicted to take place in brick-and-mortar stores.

Now, isn’t easy to understand why stores like Amazon, Alibaba, Pepperfry and Myntra have been opening offline stores that complement their e-com offerings? There are a number of advantages this omnichannel experience can offer to retailers.


According to a recent study, 90% of all online shoppers do not complete a purchase because of high shipping fees and delivery timeline that stretches beyond 2 days. To make shipping more cost-effective and give customers the convenience they’re looking for, many retailers have turned to the Buy Online, Pick Up in Store (BOPIS) model.

Through this model, customers can complete purchases online and pick up their merchandise at their preferred retailer outlet. If the product is already in the shop’s inventory, shipping is not needed at all. If it isn’t in the inventory, the delivery distance is shortened and thus shipping costs are reduced. For the customer, the convenience is maintained as she/he can walk into the store, pick up the order, and go back home without wasting any time.

Cross Marketing And Returns

When it comes to fashion, footwear, and lifestyle accessories sizes matter. For you, as a customer, it can be frustrating to get a delivery, find out it doesn’t fit, send it back and then have to order a different size and wait for it to be delivered. From the retailer’s perspective, the shipping and return costs affect the profit margin.

By offering an omnichannel experience, this issue can be tackled quite effectively. Customers can walk into their neighborhood outlet and pick a different size and try it on before making the exchange. For retailers, this helps control shipping costs and creates an opportunity for cross-marketing. When customers walk into the store to make an exchange, they might see something else they like and make an additional purchase.

Deeper Customer Connect

Online shopping lacks human interactions. Customers don’t get a chance to ask in-store stylists for advice, it’s a solitary experience and customizations aren’t as easy to organize. These are experiences that a brick-and-mortar store can achieve quite easily. Having a salesperson who greets you, tells you what looks good on you, gives you the right size, and offers a better color scheme can help brands build a deeper connection with the customer.

Shorter Break-even Timelines

It takes time and quite a bit of financial investment before an online retailer can reach the mark. On the other hand, it’s easier for brick-and-mortar stores to prove their quality standards and become a recognizable brand name. From a break-even point of view, physical stores can turn Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) positive within 6–12 months while online companies can take years before they start showing a profit. Opening offline stores can also reduce customer acquisition costs. Walk-in customers have almost no acquisition cost.

Boost Sales

Offline or online, sales are the bottom line for every retailer. Though customers can order something online and return if they don’t like, many still prefer the touch and feel experience before making a purchase. This is seen more often in the case of customers making their first purchases on a website. Offline stores may hold a smaller inventory than the online branches but they give customers a chance to experience the quality of the product range. In turn, it can lead to more sales.

Similarly, online sales can influence offline sales as well. For example, say you shop for shoes from a particular website and the website also has a store in your neighborhood. If you need a pair of shoes urgently, aren’t you more likely to shop at this outlet rather than other stores?

A Final Word

Once upon a time, e-commerce was seen as a threat to brick and mortar stores but that isn’t the case anymore. The future of retail lies in the omnichannel experience. This is where Nucleus Vision comes in. as an Internet of Things enabled platform it offers offline stores an insight into their customer’s online behavior. Thus, it helps the sales team understand the customer’s needs and preferences to promote cross sales and increase conversion rates. It also helps the store offer personalized incentives. In the long run, it builds loyalty in the brand value and helps stores offer a superior shopping experience.

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Disclaimer: This is not an investment advice. Please do your own research before investing in any avenue. The information contained in this post is for informational purposes only. You should take independent advice from a professional or independently research and verify, any information that you find in this post and wish to rely on, for the purpose of making any decision. Through this post, you may be able to link to other websites which are not under the control of Nucleus Vision. We have no control over nature, content, and activity on those sites. The inclusion of any links does not imply a recommendation or endorsement of the other website, its products or views.





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