Customer Service Gives Brick-and-Mortar Edge

The news gets a little tiring. eCommerce has taken retail by storm and brick-and-mortar had better look over its shoulders. But as with all news, the headlines tell only part of the story. They underplay the brick-and-mortar edge over pure-play eCommerce.

Clearly, eCommerce continues to pressure traditional retail and rearrange the commercial landscape. The US Commerce Department in May reported that first-quarter eCommerce spending grew faster than overall spending compared to the same period last year.

Total consumer spending came in at $1.25  trillion, a 5.1%  increase, while online spending reached $106 billion, a 14.7% increase.

Growth leans heavily toward eCommerce, and as customer research indicates, this comes down to choice and availability. The brick-and-mortar edge, however, comes with customer service and handling returns. Meanwhile, some of eCommerce’s advantages may not be that great after all.

The Perceived Advantage to eCommerce Providers

eCommerce relies on technology for a cost-advantage over traditional brick-and-mortar. In other words marketplaces, websites and third-party logistics providers eliminate the need for showrooms and reduce the cost of warehousing, bringing their overhead down.

But, as Seeking Alpha writes, this operational advantage to pure-play eCommerce has its limits.  Online shopping doesn’t change the volume or speed at which goods move. Online-only sellers still must pay for the space, equipment and people to warehouse and move their products somewhere along the value chain.

What’s more, nothing stops brick-and-mortar from reducing overhead themselves. This isn’t just about outsourcing their warehouse, but about becoming omnichannel sellers. Omnichannel sellers can enjoy the same efficiencies pure-play eCommerce enjoys.

The Brick-and-Mortar Edge in What Customers Want

As alluded to above, research shows brick-and-mortar has a distinct advantage over eCommerce. For fashion, home improvement, and electronics, customers prefer shopping in stores.

According to a retail industry survey report by analysts at Trendsource, 74% of customers want to shop in store for apparel. It’s 76% for home improvement and 66% for electronics.

While availability and variety give eCommerce an upper hand, the report concludes that in-store dominates in terms of customer service. Through all three industries, overwhelming majorities of respondents felt returns and exchanges were far easier in-store. Furthermore, the report gives eCommerce only a slight advantage in terms of pricing. Just over half those surveyed believe fashion prices were better online, and only 55% believed the same of home improvement prices.

Ultimately, it’s the person at the POS that makes the brick-and-mortar edge real.