Why Brick & Mortar Stores Are Not Going Away

Have you noticed that major online retailers are investing in brick and mortar?

If we needed any more proof that there is an inherent advantage in brick and mortar, we got more evidence this month.

According to Reuters, Alibaba has announced plans to purchase a stake in Sun Art Retail group which is the largest chain of supermarkets in China for 2.9 billion dollars.

This mirrors moves from Amazon earlier this year when they purchased Whole foods in order to compete with Amazon’s chief rival, Wal-Mart. While Wal-Mart has lagged behind Amazon in total online market share, it is working to leverage the more than 6000 international brick and mortar stores to add value that a wholly online store cannot match.

This trend aligns with what we have seen in the HME retail space. Specifically, that brick and mortar stores can out-compete online retailers if they focus on their competitive advantages (see our article “How You Can Compete With Amazon”). Right now, luckily, the focus of the large online retailers is on consumables and household products like groceries, batteries, and other items like clothing.

HME retailers are in a better spot within their specialized niche, where the value of employee expertise is high (see our article “Importance of Sales Training for HME Stores”). It will probably be quite a while before the large retailers make the move into HME products with any dedication, and when they do, they’ll still struggle with “big box” employee attitudes instead of knowledgeable experts.

It will be interesting to see what happens as these internet giants realize that their real potential is maximized when they invest in brick and mortar locations.



Leave a Reply