Digital Natives Will Change the World of Brick-and-Mortar Next

It’s tempting to examine digitally native retailers like some alien creatures to which the regular rules of retail don’t apply.

They are, after all, considered the wave of the future, the path to success, the new way to do business. But as FitForCommerce’s John Bancroft points out, the flashy newcomers are increasingly embracing an old-school channel: brick-and-mortar stores. Now before you break out your “back to the future” references, take a listen to the video interview below to learn how Bancroft, a senior consultant, sees the trend.

So, to hear Bancroft tell it, it’s not as if digital natives, are suddenly realizing that their lean ecommerce model with a strong connection to consumers is all wrong. It’s more that they are seeking to disrupt physical retail in the same way that they’ve upended ecommerce.

Moving into stores, and taking their digital-first thinking with them, is actually a natural progression, Bancroft says. You may recall an earlier post in which Cathy Halligan, an independent director at Ulta Beauty, made a complementary point.

Most retail sales still happen in physical stores

Physical stores give digital natives an opportunity to grow. And they provide a way for customers to form a deeper bond with a brand. Stores not only provide a customer experience, they provide a place to have and recall that experience.

Oh, and, stores are where shopping happens.

In our extended conversation, Bancroft pointed out that despite ecommerce’s torrid growth, about 90 percent of retail sales still occur in stores. He pointed to ecommerce leaders like Warby Parker, with some 30 physical stores and Amazon, which is branching out into brick-and-mortar and into new verticals, like grocery. (Think Whole Foods Market.)

What’s important, as Bancroft noted, is that these aren’t old-line stores that digital natives are opening. Instead, they are staying true to their digitally native retailer roots. In general, digital natives are retailers that got their start selling directly to consumers online. They favor farming out to tech partners many of the ecommerce operations duties that pre-digital-transformation retailers built themselves.

Having tasks such as order management, fraud protection, fulfillment, customer support, tax management and the like handled often by software as a service vendors means digital natives remain agile. They can scale up and shift strategies instantly. It also means they can focus on merchandising and marketing — selling to the customers they’ve built relationships with.

Digital natives are bringing their retail philosophy to brick-and-mortar stores

Bancroft sees digital natives applying the same kind of thinking into physical stores — their “leapfrog technology,” he calls it.

No doubt bringing a penchant for testing and iterating, for relying on the data for direction, will provide many upstart retailers with the kind of advantage they’ve found online.

It should also bring inspiration to traditional retailers who have been undertaking their own digital transformation to draw themselves closer to their customers while providing them with the kind of experience they’ve come to expect in the ecommerce era.

Photo courtesy of Amazon

Mike Cassidy

Mike is lead storyteller at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at mike.cassidy@signifyd.com; follow him on Twitter at @mikecassidy.

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