Brick and Mortar Stores and the Amazon Effect
Illustration By Jesus Arango
As more and more Brick-and-Mortar stores, or physical stores in a building location, are being threatened by increased online shopping by consumers, retail companies are coming up with new concepts to draw in customers. From stores without any inventory to places that serve wine and beer, retail companies are finding new ways to fight off the ‘Amazon Effect’ and changing the face of the in-store shopping experience.
Amazon is leading the assault on Brick-and-Mortar stores by offering continuously quicker and cheaper delivery options. The effect Amazon is having, also known as the ‘Amazon Effect’, is staggering. Global services provider Credit Suisse predicts that by 2022, 25% of the malls in the US will close. With traditional anchor stores such as Sears, JCPenney, and Macy’s closing locations at an alarmingly rapid pace, malls are having to find new ways to fill empty retail spaces. At the Opry Mills Mall in Nashville, visitors can visit Madame Tussaud’s wax museum, the first in this type of location in the country. Other malls are offering anything from miniature golf to aquariums in an attempt to lure shoppers away from their computers. Malls are not the only places changing their concept, many retailers are coming up with their own ideas on how to fight the war on internet shopping.
Nordstrom’s, a chain of luxury department stores based out of Seattle, opened their new concept store, Nordstrom’s Local, on October 2, 2017 in West Hollywood on Melrose Place. According to a press release made by Nordstrom’s on September 11, 2017, the new store, which will be significantly smaller than their normal department stores at only 3000 square feet instead of their usual 140,000 square foot stores, will have no physical inventory. Instead, they will have personal shoppers who will help consumers pick out merchandise that can be ordered and shipped to the location that same day. Shoppers will be offered wine and champagne as well as manicures to indulge in while waiting for their purchases to arrive. They will also offer onsite tailoring and alterations and curbside pick-up for online orders. Nordstrom’s is just one of many retailers trying out new concepts to get customers into their stores.
Bonobos, a men’s fashion store recently purchased by Walmart, opened a similar concept store in Detroit which is dedicated to online sales and a high-end personal shopping experience. Other retailers are trying their own concepts. Shinola, a Detroit based company which specializes in selling watches, bikes, and leather goods, shares its downtown Los Angeles location with a tattoo parlor owned by Scott Campbell, a renowned New York artist who has inked everyone from Howard Stern to Sting. Outdoor clothing company Patagonia offers yoga and sewing classes and hosts environmental discussions. The Kohler Experience Center in New York allows customers to try out their showers and faucets at their location. American Eagle Outfitters even has its own beverage bar called DRINK at their Times Square location which has become an Instagram favorite. Retailers continue to try new and creative ways to get shoppers into their stores and off of their computers.
While the Amazon Effect is changing the way stores sell their goods, Amazon itself is opening their own Brick-and-Mortar stores. Amazon Books, which sells books that were given 4 and 5 star ratings on Kindle, opened its seventh location and first in New York City this past May at the Shops at Columbus Circle. The company is set to open several more across the country in 2017. They also offer about twenty locations to pick up online purchased textbooks and dorm room accessories for college students. Amazon’s recent acquiring of Whole Foods is another way the company is trying their hand at physical store selling. Though experts are torn on how this acquisition will affect the retail world as well as grocery delivery and the possible repercussions to the restaurant business, most will agree that the shopping experience will be irreversibly altered.
While some will still prefer to shop in the comfort of their own home, others will be curious to try out these new concepts. Whether it’s getting a tattoo while shopping for watches or getting a manicure while waiting for your order to be delivered, companies are quickly jumping at the chance to salvage their businesses in any way possible from the Amazon Effect. According to a February 2017 article in Forbes magazine by Adam Hartung, Amazon has conquered the online business world and has become the leader in Ecommerce sales. The company now wants to take their business offline in an attempt to take over the physical shopping world as well. Retailers are not giving up without a fight though, so expect to see your shopping experiences to continue to change in new and inventive ways. Whether these ideas will save Brick-and-Mortar stores, only time will tell.