Why Brick-And-Mortar Is Still Relevant Despite An E-Commerce Future

It has been over a year since the Covid-19 pandemic ravaged the world, and a new digital standard appears to have emerged over the past year. Singaporeans work remotely, attend classes and order groceries online.

The pandemic has also exposed the opportunities and limitations of Singapore’s e-commerce sector. Most retailers realized that going digital was one of the best ways to reach their customers and developed an e-commerce strategy.

According to Statista, the e-commerce market revenue is expected to reach US $ 2,793 million (S $ 3,762.67 million) in 2021.

On the flip side, data from Singstat showed that the recovery in retail sales moderated in the second half of 2020, improving 0.2% month-over-month in October. However, the index was still down 11.2% year over year.

With a general downward trend in retail sales, e-commerce appears to be the solution to boost the retail business.

Despite this, some brands still choose to set up physical stores. Is it a quirk or is brick and mortar the future of retail?

From e-commerce to brick and mortar

Love Bonito Funan
Love Bonito store / Image credit: SGMagazine

Last October, fashion brand Love, Bonito dared to open its fourth point of sale in Singapore at VivoCity despite the Covid-19 pandemic.

Covering over 4,300 square feet, it is designed to bring elements of outdoor serenity for an indoor respite amid the hustle and bustle of human traffic in the mall.

Another brand that has joined Love, Bonito in growing physically is French sporting goods retailer Decathlon, which has opened its fifth experience store, Decathlon Orchard, at Centrepoint shopping center.

Online fast fashion retailer Pomelo also opened a second store at the Nex Mall in Singapore last November.

Over the years, there has also been an upward trend of Singaporean blogshops opening physical stores. For example, Fayth, Runway Bandits, and Shop Sassy Dream have all set up physical outlets, although they started out as blogshops.

Improve the customer experience

Centrepoint Decathlon
Decathlon Centrepoint / Image Credit: Time Out

Opening a physical store can give a brand’s customers a seamless and integrated online and offline experience.

With the online marketplace being so saturated, better in-store experiences can help attract and retain customers more effectively. That’s why brands have gone the extra mile to improve the interiors of their stores and deliver specialized experiences.

For example, Love’s VivoCity store, Bonito features materials and elements typically used in exterior finishes such as granite, terracotta, hints of bamboo and greenery. The space allows women and mothers shopping with children to feel relaxed as they get their retail therapy solution.

The store also has family-friendly features like extra-wide aisles and modular changing rooms that combine to fit a stroller, as the outlet adopts a family concept.

On the other hand, the Decathlon Centrepoint store offers modern technological systems and virtual reality (VR) test areas, a first for the brand. According to Timeout, the VR test area includes an area where buyers can simulate an immersive camping experience in Decathlon’s tent options, day or night.

Another first is a 3D morphological machine that allows customers to obtain precise and personalized 3D measurements of the size and gait of their foot in order to buy the right shoes.

These strategies implemented by brands to improve the customer experience are difficult to replicate if brands were to stay completely online, and customers who shopped online only can now enjoy a tailored experience.

Bridging the gap between online and offline

nasty cookie
Nasty Cookie’s Khaki Bukit Flag Store / Image Credit: Daniel Food Diary

While shopping online offers great convenience, there are various needs that fully online businesses cannot meet.

In the fashion business, it is important that customers can buy good quality and good quality clothes. Physical sites allow customers to try or test new products before they commit to buying them.

According to retail industry expert and former CBRE director Chan Yee Yin, “Customers still appreciate elements of a traditional retail experience, such as the physical touch and feel of the product.”

Having a physical store also makes it easier for businesses to connect with their customers. About a year ago, decadent cookie brand Nasty Cookie opened their first store at Funan Mall.

Even though the business was doing well online, founder Regine Sum wanted to create a brand that could connect people, which is why she opened a retail store.

Today, the brand has three points of sale, including a cafe at Kaki Bukit.

With the pandemic forcing consumers to shop at ease online, we understand the increased need to provide them with a great experience in our physical stores.

We believe that ultimately nothing will replace human interactions. Customers expect convenience, but they crave connection – a meaningful connection, a sense of community.

Love co-founder Rachel Lim Bonito in separate interview with Vulcan Post

It is also a good way for brands to have a point of contact with their customers, allowing them to receive feedback that could be decisive in product development.

Additionally, having a physical store creates greater visibility for a brand, which can translate into more sales, both online and offline.

A balance must be struck

While the benefits of moving an online store offline are obvious, not all brands can afford to create a physical retail space.

While this approach may work for brands that already have a large following, newer, smaller brands with less capital may not have the capacity to run a physical store.

In addition to investing heavily in a physical store, brands may consider selling in flea markets and pop-up stores in the meantime.

Pop-up stores offer the opportunity to provide fine service in many different markets without the risk of unsold inventory or the expense of the cost of permanent store space.

“Because pop-ups create their own spaces and return those spaces to their original shape when they leave, there is very little maintenance required, which lowers the costs of owning vacant real estate,” said said Yee Yin.

In other words, pop-up stores are a nimble plug-and-play concept, and it can be set up with minimal fuss and manpower.

This can be another way for brands to invest more in marketing and brand recognition before moving to a retail store.

Featured Image Credit: Construction Plus Asia

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Jothi Venkat

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