Will physical stores survive the digital onslaught?

Since the beginning of the pandemic, much like everyone else I’ve mostly made purchases via digital channels. In the last few weeks, I’ve been looking to buy a webcam and wasn’t able to find anything relevant online. So I started looking for webcams in physical stores in and around where I live.

I reached out to a few stores and here’s what happened

– Some stores had run out of stock but promised they would get back in 1-2 days. They never did.

– A few of them asked me to reach out on Whatsapp, which I did. They stopped responding when I asked for more information on a product.

– A couple of them had it but refused to ship it to me using Dunzo or any other vendor. They wanted me to stop by and pick them up.

– None of them were able to explain to me which webcam I should pick up and why (they were all electronic stores)

Contrast that with what happens on Amazon or most other digital storefronts. It’s no surprise why everyone is bullish on digital storefronts taking over a larger percentage of purchases. But we desperately need a good balance of digital and physical. We need a balance of Amazon/Reliance/Tata and independent vendors. We need a more diverse pool of vendors.

I’m still very optimistic about physical stores and independent, smaller stores not succumbing to the digital onslaught and even thriving in it. But for that to happen, they need to adapt and adapt fast.

As a consumer, here’s what I think will help physical stores differentiate and thrive.

1. Build a local community – For decades, we as a family have purchased our groceries from the same set of stores. That’s true with most of our neighbors as well. These stores create a sense of community. To take it further, as the farm to table revolution intensifies, it would help for more stores to source locally (vegetables, fruits etc) and use that as a differentiator. Do everything possible to bring in a local flavour.

2. Double down on creating a delightful experience – Not enough stores focus on creating differentiated experiences. When was the last time you went to a store and were wowed by the experience? If the stores stick to adding no value beyond stocking and selling a product, more consumers will gravitate to digital storefronts. The ability to help customers make the right choice is important. As technology evolves, the idea of an augmented human, somebody who can leverage technology to help customers make informed choices without losing the “humanness” of a transaction will become a key differentiator. This will require upskilling of customer service professionals (a scalable idea for a startup to tackle).

The post purchase experience, especially repair/replacements is another key differentiator that stores can focus on. The current experience is a nightmare (both online and offline). This presents a great opportunity for stores to innovate in this space.

3. More Curation – Given the sheer number of choices consumers have these days, curation becomes important. More stores will end up pivoting to having an opinion on what consumers should buy. As consumers become more discerning, stores will have to adapt and cater to their tastes (sustainable products, products that last etc). Curation can have a local element to it as well, with more local talent being featured.

A combination of doubling down on end to end customer experience, using available technology to augment that experience and helping customers make the right choices can help physical stores hold their own. I’m rooting for them.