Brick and Mortar Making a Comeback

I have my doubts,  but there will always be specialty examples, new kinds of channels.

Brick-and-Mortar Stores Are Making a Comeback in HBS Working Knowledge

Left for dead alongside the retail highway, physical stores are suddenly finding new ways to compete, say Jill Avery and Antonio Moreno.

While legacy companies like Sears are shuttering their doors, a growing number of online-first companies—from Amazon to Rent the Runway—are opening new storefronts and transforming the shopping experience. Senior Lecturer Jill Avery and Associate Professor Antonio Moreno discuss the new rules of retail.

Q: What’s different about the physical storefront in this renaissance of retail?

Jill Avery: There’s a lot of experimentation around what a store is and what it could do. In this new worldview, a store has to create a branded experience that goes beyond the purely transactional—one that aims to build a relationship with the customer and communicate the brand in an experiential way. There’s still a purpose for physical shopping in today’s environment; it just has to feel different from what we’ve gotten used to as consumers.

Antonio Moreno: People still like going to a physical store to have an experience and learn about products, but now that can be decoupled from the act of taking possession of a product because there are better and cheaper ways of doing that. Malls are going to increasingly transform into places for experiences, not just for taking inventory home. What probably will not survive are the retailers that are more like a warehouse, or just physical repositories of goods. Real estate is too expensive for that purpose. The opportunity to think about online and offline as complementary channels has opened up possibilities that would not have been imaginable with the more traditional, siloed approach. 

Avery: I would give the example of Glossier, which is a digitally native, direct-to-consumer cosmetics company. They have one permanent showroom in New York, but everything else that they’ve done, from a physical retail perspective, has been a pop-up. The whole point of the retail experience is not to sell the product, but to introduce you to the brand in a way that can be shared with others through social media. There are special areas in the store that are set up for selfies, where you can take a picture of yourself in Glossier pink and share that on social media. They might serve a small number people during a pop-up experience, but if those people send that message out on social media, the effect is an exponential multiplier. Glossier’s expectation is that you will move your purchasing to the digital space after visiting the pop-ups, so it’s not meant to be a channel of distribution; it’s an acquisition engine and a way to make a brand splash in a particular market. ... "