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The Future of the Brick & Mortar Retail Store

March 12, 2013 Featured, Planning & Design, Retail 13 Comments

Many of us think of a big chain store first when we need to purchase something but the retail landscape is changing as many big chains face financial difficulty:

ABOVE: Garage-level entrance to the Best Buy in Brentwood

ABOVE: Garage-level entrance to the Best Buy in Brentwood

Retail is an industry in decline—but only for traditional retailers. For companies that have become successful doing something else, opening a chain of stores can bring millions of new customers and the profits that go with them. This paradox of the retail marketplace is evident in some of the biggest names at the mall. Traditional retailers such as Best Buy, J.C. Penney, Sears, and Kmart are struggling to reverse losses, turn themselves around and give shoppers new reasons to think they’re relevant. The recently announced merger of Office Max and Office Depot is just the latest example of a retail glut that has already sunk Borders, CompUSA, Circuit City, and many others. Yet Apple, a technology company and newcomer to the retail scene, operates a network of more than 200 U.S. stores that have created a new paradigm for brick-and-mortar success. Microsoft, a software company, runs about 60 U.S. stores, with plans to open more. Even Google, an information company, is rumored to have retail ambitions. (US News)

Even giants like Walmart are doing good to get 5% growth:

That sluggish curve is clearly one reason the Arkansas-based company has started devoting so much time and attention to its Silicon Valley operations. Headquartered just south of San Francisco, Walmart.com is heavily recruiting tech talent. And in some ways its investment is starting to pay off. The company’s wide-ranging experiments in “clicks-and-mortar” retail have put it at the forefront of merging online, offline and mobile commerce. (Wired)

Are retail stores doomed as more of us shop online? Thankfully, no.

Just because more people shop online, though, doesn’t mean they’ll stop shopping at stores completely. Indeed, for most retail sectors, a physical store can serve a fundamentally different function, giving consumers the ability to see, taste and touch the products in a way that is impossible online. The challenge for retailers in the future, industry analysts say, will be to figure out a way to play up the strengths of the bricks-and-mortar store while incorporating new technology into the experience. (The Street)

The changing retail landscape does mean everyone involved in city development needs to rethink what “retail” means. For many the word conjures up images of 2-3 massive big box (50,000-200,000sf) stores connected by numerous small (5,000-15,000sf) stores.  Those who think of this when they hear retail don’t understand how I can advocate for street-level retail in commercial districts. How will it fit? Parking?

ABOVE: Retail operations pop up all over the city everyday

ABOVE: Retail operations pop up all over the city everyday

They fail to realize retail doesn’t even need a box. The point is “retail” comes in all shapes & sizes, it’s ridiculous to try to put all retail into the same box. We also can’t fool ourselves into thinking people will ever buy stuff the way they did decades ago. Downtown will never again be the retail center of the region.

– Steve Patterson

  • JZ71

    Agree and disagree. You’re right, retail continues to evolve and to use many different methods to attract customers. The internet is the future, and newspapers and show windows are so last century. With infinite online inventory, the need to have and stock big boxes is reduced. In exchange, the need for huge, centralized distribution centers and large logistics operations goes up, resulting in big, windowless warehouses and more trucks on the highways. Bottom line, each retailer needs to figure out what works, for them and their customers, and cities will continue to adapt their regulatory environments to respond to these trends. In the end, each of us will continue to buy what we’ve always bought, we just may buy it differently than we did 5 or 25 years ago . . . or we could still pull into the gas station to put gas in the car, buy that Big Gulp and make our weekly trip to the supermarket to stock up on groceries, things that really don’t work online . . . .

    • moe

      And then there will always be those that shop on-line on Mondays and then complain to all on Tuesday that there are no brick and mortar stores anymore. You know the people….they go to Walmart for the cheapest prices, then complain nothing is made in America anymore.

      • tom jacobs

        I fully agree with the point you are making. I do, however, disagree that Walmart offers the cheapest prices. I find that, in general, Walmart’s everyday prices are equal to the prices offered by their competition. Just because their employees hang signs everywhere declaring that a particular item is a “great value”–doesn’t mean that it is. And Walmart seldom if ever offers substantial sales, or “deals”, both of which the competition offers. If you shop smartly, I think you’ll find that fewer items in your refrigerator will bear the ‘Great Value’ brand! Plus, Walmart’s St. Louis business plan appears stuffy and uppidy in that they avoid establishing city-based stores…..and depending on your perspective on that issue, you may find that you have even fewer reasons to shop at Walmart.

    • http://urbanreviewstl.com/ Steve Patterson

      This just demonstrates how out of touch you are, the online grocery business is booming these days as traditional stores are now offering online ordering with delivery to compete with online only retailers. http://www.csmonitor.com/Business/Saving-Money/2013/0309/Is-online-grocery-shopping-right-for-you

  • guest

    Tech stuff, media related, gadgets, these things make sense to be purchased online. Pets, musical instruments, clothing, food, furniture, consignment items, alcoholic beverages, ice cream, these things make sense to be purchased out of a retail store. Point being: there will always be IKEA stores.

    • http://urbanreviewstl.com/ Steve Patterson

      I agree there will always be IKEA stores, but I’ve ordered clothing, food, & furniture online.

  • JoeBorough

    but what happens when same day shipping becomes the norm?

    • http://urbanreviewstl.com/ Steve Patterson

      Same day shipping is the norm, same day delivery is just around the corner!

      • JoeBorough

        sorry, yes, I meant same day delivery.

  • moe

    “Just because more people shop online, though, doesn’t mean they’ll stop shopping at stores completely. Indeed, for most retail sectors, a physical store can serve a fundamentally different function, giving consumers the ability to see, taste and touch the products in a way that is impossible online”
    So most readers here are against big box retail, so soon we’ll have a lot of small mom and pop stores full of items that people can come see, taste, and touch so they can go home and buy it on line. Great profit motive there.

    • http://urbanreviewstl.com/ Steve Patterson

      I see local retailers filling in various niche markets, like http://www.rambles.com does both online and the physical store.

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