As I’ve Been Saying… E-Commerce Needs Physical Stores
I’m feeling kinda vindicated right now. As many of you know, I’ve been sounding the drumbeat for years about the enduring value of physical stores, both to consumers and retailers. Well, it seems like received wisdom might finally be approaching a tipping point on the matter. Not only is Amazon introducing a new department store concept, but now Macy’s is saying that it will be pausing store closures upon the realization (which many of its peers have understood for some time) that such locations actually help to increase digital sales. And then, the Wall Street Journal comes out on Thanksgiving day with a lengthy piece (below) entitled “E-Commerce Needs Retail Store Locations More Than Ever.” For those who cannot get beyond the paywall, here’s a few particularly interesting tidbits: 1) costs to acquire customers online have grown nearly 50% in the last five years; 2) the role of bricks-and-mortar in providing options for curbside and in-store pickup is becoming increasingly critical as major carriers use their leverage to charge higher shipping costs; and 3) landlords are readjusting expectations and the market for retail space is finding a new equilibrium, which bodes well for A and B+ locations. Of course there is a long way to go before this story reaches its conclusion, but at the moment, the prevailing consensus seems to be shifting.