The future of brick-and-mortar business
Oct 28, 2016 11:47AM
● By Neighbors Magazines
by Ben Scott
The business world is changing at an astounding pace, with some experts predicting that about 65% of children entering grade school today will later work in roles that don’t currently exist. The evolution of technology and online shopping has left many people feeling nostalgic for the experience of patronizing small, locally-owned brick-and-mortar businesses. What does the future hold for such businesses in communities like Darien? Will brick-and-mortar stores still exist in the future?
“You have to change with the times,” says John Gorgol, owner of RoofTech Systems in Darien. (See cover).
Business owners like Gorgol understand that all businesses need to be adaptable in order to thrive. A lot has changed since Gorgol started RoofTech Systems in Darien 21 years ago. E-commerce has a bigger footprint than ever, with about 40% of all sales happening online. The last few years in particular have seen a rise in online shopping figures, facilitated in part by a 4G network that allows consumers to shop on the go.
Consumers are also savvier than ever, using sites like Yelp to rate and compare businesses. Gorgol takes pride in the fact that RoofTech Systems has kept up with new innovations in the roofing industry.
“I think we’ve grown since we first started,” Gorgol says. “We are more conscious of changes in the application of shingles and materials.”
Because most people can buy most of what they need online, it’s possible to imagine e-commerce closing the doors on many small, brick-and-mortar stores one day. Surprisingly, however, experts like NYU Marketing Professor Scott Galloway say this won’t happen anytime soon.
“The future of retail looks more like Macy’s than Amazon,” Galloway says. “Pure-play e-commerce doesn’t work for anybody. The world looks more like a multi-channel future.”
Some small businesses try to keep their overhead low with a solely online presence, but these businesses often have too much competition in a digital domain that has become overcrowded and expensive. Businesses today are involved in a costly game of “bidding on keywords against the likes of Amazon and large retailers to land on the first page of search results.” (visenze.com)
“It’s very hard to launch a brand these days that’s just online-only. It’s an incredibly difficult and crowded e-commerce environment,” says Sucharita Mulpuru, a retail analyst at Forrester Research. Mulpuru also notes that there are more than 800,000 online stores competing for customers through the gateway of Google.
Business owners who open brick-and-mortar stores alongside their online presence are able to increase brand awareness and develop a customer base in a space where retail options aren’t infinite. According to Galloway, businesses will need to focus on this kind of omni-channel approach to target their customers and remain relevant in the years ahead. For their part, consumers also want a variety of choices when shopping for a product, and an omni-channel approach gives them more options by seamlessly combining digital and physical shopping experiences.
Even roofing contractors like Gorgol understand the importance of maintaining an online presence. Gorgol’s website RoofTechsystemsinc.com gives a detailed overview of his business’ services and specializations, and includes an advertisement that his business is GAF-Certified Master Elite, a certification Gorgol is proud of because it means he can offer enhanced warranties to his customers. At the end of the day, however, Gorgol says RoofTech Systems remains successful because of his continued focus on customer service as the most important aspect of his business.
“Customer satisfaction is the key,” Gorgol says. “We do a lot of work from referrals, and we have always stood behind our work.”
Luckily for Gorgol, RoofTech Systems won’t need to adapt as quickly as some brick-and-mortar businesses that are struggling for survival in an increasingly digital world. Small businesses offering products that can just as easily be purchased online need to do something extra to bring customers through the door.
“Consumers aren’t coming to brick-and-mortar stores for the prices or the selection,” writes Chris Wadsworth in an article on trafsys.com. “They’re coming for an experience.”
A visenze.com article points to men’s clothing retailer Bonobos as an example of an omni-channel business that offers their consumers a unique experience; Bonobos customers get fitted by “guides” at brick-and-mortar locations, place their order online and get their fitted clothing delivered to their homes. Traditional brick-and-mortar businesses will need to follow the lead of retailers like Bonobos to remain viable in the future.
According to Wadsworth, businesses need to provide “personalized retail” experiences that are tailored to each visitor. Regardless of what they’re shopping for, today’s consumers expect businesses to know their interests and preferences. Businesses have the ability to gather this information through predictive analytics, which involves the study of current and historical consumer data that businesses use to launch personalized marketing campaigns. Through predictive analytics, business owners can learn the demographics and interests of the people who shop for their product.
In the future, artificial intelligence may play a bigger role in gathering this predictive information, even for small, community businesses. In an article titled “Future Trends From NRF: A Brick & Mortar Disruption,” marketing expert Tamara McCleary talks about the possibilities of IBM’s artificially intelligent Watson and how its “cognitive computing abilities allow it to look at vast amounts of data, much of which is unstructured…allowing for companies to understand their customers in profound new ways.” For instance, businesses in the future may have Watson scour social media sites to quickly understand how customers feel about their product.
And while the integration of A.I. like Watson might be a few years off, small businesses already have access to some fairly advanced technology.
“Formerly enterprise-only solutions like touch-controlled office kiosks, interactive point-of-sale terminals and even sophisticated employee inventory systems are now within reach of the smallest small businesses,” writes Jonathan Blum in a story for entrepreneur.com.
Looking further ahead, robots might one day replace humans in some office and administrative roles, with the ability to do everything from ordering stock to managing employees’ schedules and payroll. But most experts are confident there will still be plenty of jobs for humans in the future, and in a recent interview with wired.com President Obama showed optimism regarding the development of robotics and A.I.
“Historically, we’ve absorbed new technologies, and people find that new jobs are created, they migrate, and our standards of living generally go up,” Obama said.
Technology will also play an important role in the experience of shopping at brick-and-mortar stores in the future. Engadget writer Chris Burch points to the ways in which many brands have already incorporated technology into the brick-and-mortar shopping experience. Some stores use Beacons, for example, to send coupons okr product recommendations to consumers’ phones when they enter a store. Other technology like Radio frequency identification (RFID) allows businesses to track their retail inventory digitally. Even more futuristically, some brick-and-mortar stores have embraced augmented and virtual reality to enhance their customers’ experience. Burch predicts that storefronts of the future will use augmented reality to demonstrate to customers the various ways products can be arranged and used: “Someday, you can expect to see virtual fitting rooms, interactive window displays and augmented reality-assisted navigation through larger stores,” Burch writes.
It’s interesting to think about brick-and-mortar businesses in Darien one day using augmented reality to demonstrate their products. And it’s fun to think about the ways consumers will benefit from technology that streamlines the process of buying goods and services. But, even 50 years in the future, some aspects of running a business will remain the same. Business owners like John Gorgol know that both brick-and-mortar and online stores will always need to offer quality products paired with excellent customer service.
“I want my business to maintain our standards at a reasonable price,” Gorgol says. “If there’s ever a problem we take care of it, and quality matters to us.”
Any business aiming for success would be wise to follow Gorgol’s lead.