It seems like brick-and-mortar retail is on its way out, so you might be surprised to find that physical retail is thriving in late 2018. Find out what 2019 will bring for entrepreneurs interested in opening a retail space.
One of the great myths of the late 2010s is that brick-and-mortar retail is as dead as paper napkins, canned tuna and golf. The craze of online shopping – exacerbated by "holidays" like Cyber Monday – has created the sense that people don't shop in physical retail spaces anymore. Seemingly, we're living in an entirely digital retail era, and e-commerce giant Amazon holds the rulebook in this complicated new landscape.
As with most myths, there are nuggets of truth that inspired the belief that physical retail is no longer a profitable way to run your business. It's true that there are more online shoppers than ever. So what does that mean for new entrepreneurs looking to launch their physical stores in real life? Let's take a deeper look.
The way things were
Five years ago, an easily navigable e-commerce platform with good inventory and a robust Instagram following was enough to secure relatively consistent business. Unique companies filling ultra-specific niches – like eyeglass designer Warby Parker, mattress company Casper or straight-to-your-door men's apparel brand Bonobos – were popping up everywhere, and creativity and innovation were the names of the game. As long as you had the tools to get your name out there, physical retail space was irrelevant – if not detrimental – to your fiscal success.
Fast forward to late 2018, and all those special niches are suddenly overcrowded with virtually identical companies. Everyone has an amazing brand, strong social media presence and a killer product. The reality of this new world is that there is very little to distinguish these companies from one another, and thus, one or two naturally emerge as leaders of the pack and the rest are left in the dust.
As a result, even those big-name digital native retailers that began with a bustling online business have turned back to physical retail spaces. Warby Parker alone now has over 64 locations in the U.S. Even Rent the Runway, a brand whose entire purpose is predicated on the convenience of shopping online, has seen great success by strategically opening brick-and-mortar showrooms. So why does shopping in real life matter if consumers agree that online shopping is generally more convenient?
Experiences vs. objects
Shoppers today are prioritizing experiences over objects, which makes sense in the great migration from e-commerce to physical retail. While digital commerce platforms can be customized and personalized to a certain extent, most successful companies follow a strict template of simplicity, making it difficult to hammer home your brand in a saturated market.
Brick-and-mortar retail spaces, on the other hand, are free to customize every detail of their space, from the obvious aesthetic choices like paint, furnishings and flooring to subtle, experience-defining details like music and scent. Ultimately, it's these details that allow companies to distinguish themselves in a crowded market.
In addition, convenience simply doesn't stack up to the tactility needed for shoppers in the late 2010s to secure confidence in their purchases. Physical retail spaces allow shoppers to physically see and touch the objects of their consideration. For a generation of shoppers that cares more about how it spends its money than any other before it, being able to critically consider a physical product as opposed to analyzing a product page online makes all the difference.
What to consider when opening your retail location in 2019
Not only is physical retail not dead, it's on the rise. If you're an online retailer or an entrepreneur looking to jump on the brick-and-mortar bandwagon in 2019, here are some things to keep in mind:
Opening a physical retail space doesn't mean you should abandon your online presence. One can aid the success of the other, and many companies are reaping the benefits of having both.
If you're starting from scratch, do your homework. You need to be certain that your business idea is relevant, both generally and to your community. Be specific and intentional about your location, your product offering, your branding, and your social media presence.
If you're not sure what kind of retail store you want to open, consider purchasing an existing business. An already-operating retail location has the benefits of an existing clientele and an established presence in the community. For many new business owners, this is a much less risky investment. There are excellent resources available to help you identify an existing retail business available for purchase.
While opening a retail business – or any business, for that matter – is never a risk-free venture, physical retail locations are thriving and will continue to thrive in 2019. If your apprehensions are built on the assumption that e-commerce is the new and singular shopping reality, you can rest assured that brick-and-mortar has a long future ahead of it.