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The drama unfolds: Brick and Mortar vs Ecommerce

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You can do your Christmas shopping by clicking on direct links from the nymag.com gift guide, as you simultaneously watch a Netflix Original Series and bake a pecan pie, all while in your pajamas. There is no need to deal with long lines or crowded malls. With three clicks and an extra $2.99, you can pay for everything to be wrapped and personalized. You can even guarantee a “by-Christmas Eve delivery” to ensure the gift’s place under the tree. As the holiday season inches closer and closer, we are taking a look at the value of brick and mortar stores vs. ecommerce, and specifically how it affects Birmingham.

We all know that the human race has become rapidly tech-obsessed. As the Internet takes over, we all scramble to keep up. Ecommerce has turned many industries on their heads; newspapers, book publishing, record labels, music sharing, and even travel agencies. Like the others, consumer behavior defines the game in commercial real estate. When the indoor shopping mall concept lost its luster in the mid 90s, the outdoor shopping center was born. Currently, the market is set to decrease in physical, or brick and mortar stores, but not everyone is convinced. Commercial brokers must forecast these behaviors and constantly analyze the modern consumer.

Principal Len Shannon, III, CCIM, takes a look at the conflict of brick and mortar vs. Ecommerce:

“Both camps have statistics to back up their claim. On one side, brick and mortar sales have remained the same, as a percentage of overall retail sales. The other side has stats too, foot traffic during last years Holiday season was down half of what it was three years prior, and online companies like Amazon had its best year ever during the holidays, selling over 36 million items. So who is right? Could it be both? Macy’s reports that when it closes a store, Internet sales in the trade area plummet,” Shannon said.

Should retailers be worried? You can still get the high tech experience while shopping in a brick and mortar store, and little can top the instant gratification one receives after making an in-store purchase. “Bazaars were around thousands of years ago and human nature still enjoys the shopping experience,” said Shannon. The development of portable point-of-sale gadgets and secure online payment systems allows customers to buy a fresh loaf of bread at the farmer’s market with the tap of your card and swipe of your finger- no clunky cash register or long line in sight.

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World-famous Grand Bazaar in Istanbul- Photo by Pascal Sebah

Consumers are guilty of “showrooming,” or testing merchandise in stores before eventually purchasing items online, usually for a cheaper price. This terrifies local retailers, but lately retailers are noticing the reverse effect— customers will enter the store completely educated on their options and ready to make a purchase. This can be helpful with eliminating anxiety and buyer’s remorse, especially with big-ticket items.

Birmingham retail owner, Michael Gee, of The Pants Store, acknowledges the need for an Ecommerce website. Gee says, “It’s important to have an online presence. Many people will shop your website before deciding whether or not to shop your brick and mortar business.” Even though his stores’ physical locations do a considerable amount more than his online business, he understands that the website serves as a preview to what customers will get in the store. “A lot of people still like to try on clothes or shoes before purchasing,” Gee said.

The days of the one-trick pony are long gone. To keep up in today’s competitive retail world, you have to do it all: Ecommerce, brick and mortar, around-the-clock customer service assistance and even live-chat services.

Shannon believes that there is one group who will define this issue in the near future. “Competition, while unpleasant, stimulates change. The key will be for retailers to adapt to an ever-changing environment and prepare themselves to embrace the largest demographic buying group we have ever seen, the Millennials,” Shannon said.

The International Council of Shopping Centers (ICSC) advocates brick and mortar sales with its #BricksBeatsClicks campaign. Here are a few of their Instagram infographics (@icsc) arguing that in-store shopping is still hot:

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On one side, brick and mortar sales have remained the same, as a percentage of overall retail sales. The other side has stats too, foot traffic during last years Holiday season was down half of what it was three years prior, and online companies like Amazon had its best year ever during the holidays, selling over 36 million items. So who is right?

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by Suzanne Echols
10.13.2014