How Can Brick and Mortar Retailers Fight Competition from Online Retailers?

I came across an interesting article in recently which brought back some  thoughts based on the work that I did earlier in this area:

Often, we look at the challenges faced by brick and mortar retailers from price perspective especially in the wake of the increased success of online stores. Yes, price definitely is a factor, especially for so-called commodity products. However, there are few things that brick and mortar retailers can pursue to be profitable.

‘Not just a place for product display, but it’s a place we get advice on right products for us’

Don’t just make the outlet look like an exhibition of products and their specifications. Create an environment where customers/visitors to the store can contemplate and obtain right advice on what to purchase. The role of product advisors along with services that they offer make a big difference. So look at changing the role of sales executive to service advisor.

‘Customer loyalty goes beyond price difference’

Create loyal customer base through consistent quality and value delivery. Creating loyal customer base and maintaining it is a very sensitive area as one small negative experience (when not handled properly) can make people move away and never come back again. Many loyal customers don’t mind paying slightly more as they value the relationship with the store. However, there is always a threshold beyond which ‘price’ becomes an influencing factor than loyalty. Analytics help in finding the threshold for the price difference.

‘Showrooming – An opportunity to convert display into a sale’

Many people research online and visit showrooms to validate before going back and ordering online. This is a moment of opportunity for converting such visitors into customers by leveraging following:

  • instant gratification
  • close pricing (not necessarily price matching, offset the slightly higher price with instant gratification)
  • flexible delivery options
  • bundled services

‘Increase order value by suggesting add-on products or services’

Take this as an opportunity for being an advisor to customers in enhancing value from their current purchase, by suggesting relevant products/services. Of course, looking at what the customer needs are, and those that fulfill customer needs in a better manner. Such an approach will help customers in enhancing the value from their purchases, and in turn, help retailers improve their business.

‘Leverage technology to drive sales’

Have online presence for the convenience of customers. Offer hybrid options like between online and showroom. Try to create ‘showroom’ experience while purchasing online. For example, let’s take an example of a customer who is trying to make an online purchase. But he/she needs some more details before making a purchase. The Retailer can provide an option to connect (preferably through video) with one of the service advisors in their stores. One may want to create a virtual reality zone for some products in the showroom to simulate the experience of using certain products. There are multiple things that one can do innovating technology.

In summary, brick and mortar retailers should shift focus from competing just on prices to:

  • Converting sales executives to service advisors
  • Flexible pricing and delivery options
  • Loyalty program customized to individuals, not just a ‘standard across the board’ approach
  • Leverage technology and innovation to enhance overall experience


All we are saying is don’t make products look like ‘commodity items‘ (either through direct or indirect actions) that make visitors/customers to purchase from anywhere. Create differentiation; create bonding with the retailer; and get a mindshare of customers. Also, let’s agree that there are always some products that customers see as ‘commodity’ and go for cheaper options.

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