Frost & Sullivan: Brick and Mortar Businesses Can Level the Playing Field with E-commerce

Brick and mortar retail is in a state of disruption. As e-commerce gradually erodes physical retail – effectively commoditizing the routine shopping experience – retailers are finding it hard to survive.

Competition based on price alone is a prescription for failure; and e-commerce sites, based on their massive scope and scale, are capable of underselling any local merchant. Yet, brick and mortar commerce has an advantage over e-commerce that most retailers are not leveraging, personalized experience.

The Frost & Sullivan whitepaper titled, “Leveling the Playing Field: Leveraging Brick and Mortar Advantages to Compete with E-commerce,” reveals that by 2020, e-commerce will account for nearly 18 percent of the total retail market.  

As a continuing trend, this is troubling to physical retail, but with hyper-competition pressing margins, many brick and mortar retailers may not be able to survive an 18 percent decline in potential business.

Nonetheless, the natural advantages of physical retail ensure that brick and mortar can not only survive, but can actually retain and build on its dominance in the consumer space.

Cutting edge technology is required

In today's hypercompetitive retail market, providing the personal touch cannot be done cost-effectively when a consumer can decide to shop at any one of many store locations.

To deliver a personal shopping experience, cutting edge technology is required; yet attempting to implement such technology on a single solution basis will guarantee a less than economical outcome.

What is needed is a retail vendor that can deliver an end-to-end point-of-sale automation solution, one that enables seamless and flexible customer interaction but which also remembers consumers, and  their shopping preferences.

"There are few retail technology providers that can do this. NEC is one of them," noted Stratecast | Frost & Sullivan Consumer Communications Services Research Manager Michael Jude.

"Empowering the smart enterprise with its smart retail solutions, the company is pushing the boundaries of retail technology, to level the playing field between brick and mortar and e-commerce. By embracing the smart enterprise, retailers can utilize technologies to optimize business practices, drive workforce engagement, and create a competitive edge – all while 'Knowing Your Customer.'"

Purpose rather than place

Building a retail experience, rather than a transaction exchange, requires that retailers begin thinking in terms of purpose rather than place.

If the purpose is to engage with customers and to provide them with an experience rather than a purchase alone, then it is essential that the retailers treat every customer uniquely, providing an experience that is defined by each customer's buying habits, preferences and past service experiences.

In practice this means deploying POS technology and ERP systems that deliver customer specific information to sales personnel, in near real time, rather than delivering aggregated date on store traffic at the end of the week.

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