Real-World Retailers Have an Ecommerce Advantage

Smart retailers are using brick-and-mortar as a springboard for digital success

By Remington Tonar, Chief Commercial Officer at Cart.com 

Online retail was supposed to spell the end of brick-and-mortar stores, with shoppers clicking to buy on Amazon instead of heading to the mall. The pandemic only reinforced that narrative, with digital retail racking up a decade’s worth of growth in just a few months, and real-world merchants facing enormous challenges as people hunkered down at home.

The real story of the past year and a half, though, isn’t one of ecommerce conquering everything. In fact, physical stores have shown incredible resilience — and while many stores did close during the pandemic, many more found ways to survive and thrive by creating hybrid business models that incorporate the best elements of digital selling, but retain the robust infrastructure and experiential, hands-on magic of real-world retail. The result: many real-world stores are still going strong, and even Amazon is now branching out by opening department stores of its own. 

The reality is that while it’s never been easier to start an ecommerce business, in-person retailers often have much stronger fundamentals than digital commerce startups. That means building a traditional retail business can serve as a highly effective launchpad for ecommerce success, and a potent proving ground for establishing a brand and honing market fit — if founders have the vision and courage to experiment, evolve, and expand their operations into the digital world.

A steeper on-ramp

The data is clear: about nine out of 10 digital commerce startups fail within 120 days of launch, while just a fifth of conventional small businesses fail during their first year. That doesn’t mean it’s easier to launch a real-world business, though. In fact, the opposite is true: these days, just about anyone can throw up a website and start selling widgets online, but opening a real-world store takes serious planning, significant up-front investments, a willingness to tangle with red tape, and far more sweat equity.

That steeper on-ramp goes a long way toward explaining why real-world businesses tend to outlast digital ventures. You don’t open a store unless you’re committed to doing what it takes to make it work, and all the investments you make while setting up your business — from business licenses to decorations for your store — become sunk costs that lock you into the path you’ve chosen, and make you more likely to persist when the going gets tough.

But it isn’t just determination that drives brick-and-mortar success. In order to survive, real-world retailers are forced to solve hard problems — from managing cash flow, to figuring out product fit, to handling fulfillment and logistics — and they gain important skills and knowledge in the process. That’s not to say that growing an ecommerce brand is simple -— quite the opposite. It often requires skills that can’t necessarily be learned just by selling things on Amazon. This knowledge can be gained, however, by mastering the nuts and bolts of running a real-world retail business.

A new mindset

I’m not trying to suggest that it’s necessarily better to own a physical business than a digital brand, or that real-world retail is somehow inherently superior to ecommerce. But I do believe that we need a new perspective on commerce that acknowledges the synergies between real-world and digital selling, and encourages brick-and-mortar businesses to leverage their hard-won expertise to unlock success in the digital sphere. 

It’s already commonly understood, after all, that digital sellers can benefit from using retail as a value-add for their digital-first brand. DTC success story UNTUCKit, for instance, now operates 80-plus retail locations and gets about half its revenues from in-person sales channels. From Amazon’s new department stores to smaller pop-up shops, real-world selling provides online brands with a crucial experiential component that drives awareness, enables hands-on product testing, and bolsters customer retention. 

Unfortunately, many real-world sellers — especially smaller, independent brands — still view ecommerce with suspicion, or assume they’ll be overwhelmed if they try to branch out into online selling. That might have been true once, but the rise of Ecommerce-as-a-Service (EcaaS) platforms such as Cart.com has taken the sting out of adding an ecommerce layer to an existing brick-and-mortar business. Today, it’s easier than ever for sellers to plug digital tools into their real-world operations, leveraging the branding and infrastructure they’ve already built while opening the door to huge new markets.

Going the extra mile

As we move into the post-pandemic era, these kinds of hybrid approaches will be incredibly important, especially for real-world retailers that are looking to ride a new wave of consumer appetite for in-person shopping experiences. Returning customers are eager to shop in person, but also expect in-person experiences to be as quick and convenient as the online shopping they’ve grown used to. That means retailers of all types and sizes will need to offer hybrid options — enabling in-store customers to quickly go online to order out-of-stock product sizes or variants, say, or offering services such as in-store pick-ups and returns that blur the line between online and offline shopping.

Retailers that get this right will also find that they’re able to rapidly expand their operations with online sales. As consumers rediscover their love for real-world brands, they’ll spread the word online, enabling merchants with smart ecommerce components to rapidly reach new markets and scale up their sales and revenues. As we look to the future of commerce, it’s clear that what lies ahead isn’t just a world of digital selling — rather, it’s a blended approach, with digital sellers leaning into and learning from real-world retail, and traditional sellers using digital tools as a force multiplier to extend customer relationships and reach new markets.

All this makes an expansion into digital commerce a logical next step for real-world retailers that have weathered the turbulence of the past 18 months. They say that whatever doesn’t kill you makes you stronger, and over the past year-plus, many brick-and-mortar brands have proven that they are true survivors. Now, they need to take their hard-won experience and expertise, and use it to unlock growth at the kind of scale that only digital commerce can deliver.