Panicked headlines have circulated among the nation’s most notable news outlets, all concerning long-running brick-and-mortar retail stores closing their doors for the last time. As continuous chants claiming “the end is nigh” ring through the industry, a stigma has been applied to owning or starting a retail branch in this decade.

The truth is, as loud as the echoing of in-store retail failure sounds, there is no apocalypse on the horizon. Rather, there is a digital evolution at hand that is refurbishing the possibilities and expectations of the brick-and-mortar retail industry. Keep reading; you’ll see what I mean.

A Quick Refresher On Retail

Retail relates to the sale of consumer goods to the public. These goods can be anything from everyday groceries, to the newest smartphone, and even to that trendy clothing item you just had to add to your closet. Today’s retail industry consists of two sectors: brick-and-mortar and e-tail. Brick-and-mortar retail, also called in-store retail, relates to retail companies that primarily offer consumer goods to the public from a physical store location. While e-tail companies can have physical store locations, the majority of their sales happen online since internet consumers purchase goods within their digital web stores.

The Growing Crack in the Brick-and-Mortar Foundation

Think: what do most brick-and-mortar retail brands facing bankruptcy or foreclosure have in common? Their heavy dependence on sales happening within their store locations. Retail, both its brick-and-mortar and e-tail segments, is a trillion-dollar industry, but the trajectory of its brick-and-mortar sector is slowing. E-tail is set to account for 69% of total retail sales growth in 2020, experiencing a 12.8% sales growth, while traditional in-store sales are only expected to rise by 0.7%. 

 These days, e-tail brands tend to gain the upper hand with total sales during the holiday season thanks to the popularized shopping traditions such as the sales rush of Black Friday. In-store sales reached over $868b in 2019 yet its growth from the prior year was only 1.9%. Retail ecommerce achieved a 13.4% sales growth in the same time frame, despite reaching $133.57b. In terms of year-over-year sales growth, brick-and-mortar stores are losing the game against e-tail.

The Gen Z Uprising

The shift toward e-tail is no coincidence when the current state of the market is considered. Previously, baby boomers were general retail’s biggest players. Their impact on the industry undoubtedly empowered the industry to reach its trillion dollar mark in today’s market. Boomers grew up when brick-and-mortar was the sole sector of the retail industry, thanks to the internet not coming to fruition until 1983 and digital stores not gaining public momentum until the late 90s/early 2000s.

However, boomers have begun to actively adapt internet-driven tech into their lives. 75% of internet-savvy boomers carry a smartphone, while another 65% have taken a liking to laptops. Boomers even found their niche on social media platforms with 50% of 2020 social network users being over the age of 50. In the world of e-tail, boomers’ progression as modern consumers is evident. 68.5% of digital buyers penetrating the 2020 e-tail market are aged 55-64; that’s over 6% more than shoppers aged 14-17. Additionally, shoppers aged 65+ represent 48.9% of 2020 digital shoppers. Boomers’ e-tail presence is expected to continue, with an estimated 71.7% of digital buyers being 65+ and 84.5% of shoppers aged 55-64 expected to penetrate the market by 2023.

Who’s Doing The Buying?

Despite embracing the e-tail market, boomers’ consumer record is no match for Gen Z’s distinct reputation of being the market’s most prominent e-tail generation. True, millenials have a strong stance in e-tail today, set to represent 64.8m digital buyers by 2023. However, Generation Z was the first generation accustomed to the Internet’s existence since birth. Consequently, this young generation has immersed itself within the e-tail world. This year, over 86% of people aged 18-24 and nearly 62% of people aged 14-17-year-olds will be digital buyers. Additionally, the e-retail giant Amazon is considered the top shopping site by 52% of teens. Gen Z’s digital reliance will undoubtedly cause brick-and-mortar buying to decrease in popularity as their market impact grows.

The Convenience of Accessibility

E-tail continues to outperform in-store retail by offering instantaneous, all-day customer experiences. The power of digital lets e-retail offer transparency about major inventory changes like out-of-stock/sold-out inventory, which has been dubbed a leading in-store shopping nuisance by 48% of adult consumers. The pressure of store operation times are removed thanks to the Internet being open 24/7. Best of all, e-tail eliminates burdensome checkout lines, offering a solution to the 60% of in-store shoppers annoyed by long checkout lines. The accomplishment of digital stores adopting an experience built on individually catering to customers explains why 83% of internet users are praising e-tail over brick-and-mortar experiences.

The Power of the Cyber Cart 

The age of digital has also upgraded the importance of a shopping cart. At brick-and-mortar store locations, carts are simply the holders of items. Wanted items are kept inside, while items glimpsed at but not taken go unnoticed by store owners. Plus, no alerts exist for selected items returned to the shelves before a purchase is complete. Once an item is removed from a cart, it stays out of the cart. 

Online carts are different. There are over 201m digital buyers and over 229m digital shoppers interacting with the online market this year. Brands need to stay aware of these audiences to pinpoint and attract the right customers for their offerings. Luckily, digital has converted carts from item holders to lead generators. With enhanced data algorithms, online-optimized brands can see which items are being browsed or carted by their customers. Even if the item isn’t bought, e-tail stores are given knowledge of potential buyers’ interests. This knowledge can empower every aspect of a campaign strategy, from audience targeting to messaging to ad outreach.

Brick-and-Mortar’s Beacon of Light

Modern-day e-tail’s rise in consumer popularity does not mean brick-and-mortar retail’s doomsday is at hand. Instead, this market change is a wake-up call for retailers to invest more effort into adapting digitized retail attributes without forcing the complete abandonment of in-store retail. One such e-tail method brick-and-mortar brands are utilizing is BOPIS purchasing, or the consumer’s option to buy online, then pick up in-store. Today, 41% of online consumers plan to use store-pickup options for their online purchases. Major e-tailers like Amazon and Walmart as well as brick-and-mortar stores like Kroger are experiencing grocery sector growth thanks to BOPIS. Curbside grocery pickups alone are set to become a $35b business by 2020 in the U.S. Brick-and-mortar brands are also investing resources in store-to-door deliveries. From e-tailer Amazon planning drone deliveries to everyday brick-and-mortar businesses dropping off online orders to local buyers, brands are making efforts to satisfy the 69% of U.S. internet users who prefer home delivery options when buying online.

Success over merging e-tail capabilities with brick-and-mortar traditions has been proven, but deciding which digital direction best compliments a brand dynamic can be daunting. Fortunately, a multitude of existing digital solutions can elevate a brand’s digital standing. Use geo-sensitive mobile ads to drive more in-store foot traffic. Analyze distinct data captured from local audiences, and adapt a cohesive product campaign based on those insights. Leads can even be directed to store locations by digitally advertising store sales and offers across OTT formats. By incorporating these e-retail solutions to create cohesive, personalized experiences that encourage customer visits and purchases, brick and mortar retailers can remain relevant and successful players in their market. 

IP Zone: Leverage the relationship between users and the location of their IP addresses in a cookie-free, safe and scalable way.

Behavioral: Combine first party with network analytics and enormous scale to define custom audience channels that are optimized to sites with high brand engagement.

Demographic: Reach the right audience based on demographic characteristics such as age, gender and income.

Mobile Device: Target users by mobile device type (Smartphone, tablet, etc.), carrier and operating system.

Geo-Location: Target your audience residential cluster, proximity to retail locations, campaign level DMAs and more.

Contextual: Place a relevant ad in front of a user who is reading content that contains specific terms.

Buying Power and Quality

Let’s be honest. Your ad ops are limited by your access to only a handful of channels and DSPs. You want more reach and better prices, but don’t want to sacrifice quality in order to achieve those goals. Digital Remedy has access to a vast multitude of channels based on relationships we’ve cultivated over nearly 20 years in business. That means we get the best prices, have personal relationships, and don’t get sent to voicemail when we call.

It also means that we can execute omni-channel ad ops for better prices than an internal team, while ensuring the quality is up to industry standards. On top of access to all sorts of specific audiences we’re able to to leverage first- and third-party data across all your campaigns and pivot across platforms based on results. Any campaign, any budget, any platform, any audience. Digital Remedy backed by AdReady is restriction free ad ops….and what could be better than that?

Resources, Time, and Overhead

When was the last time you enjoyed balancing budgets, reading resumes, dealing with aggressive sales teams, or wasting years of time for small gains in performance. By partnering with Digital Remedy you get the full support of $30m in OPEX including marketing teams, sales teams, and a dedicated 24/7 ad operations team. No hiring new employees for media optimization, business development, or account management. No months of training and on-boarding. No long meetings crafting sales materials. Just your team focused on making deals, and our teams and tech focused on supporting and executing those deals in a tech-enabled, digital ecosystem designed to get the most out of any KPI.

Reporting and Support

How nice would it be to have all of your data and insights in one location. We don’t mean an excel sheet sent out once a week with complicated charts, or an XML file with pages and pages and pages of tables (what is this, 2003?). We mean a fully customizable dashboard reporting in real time, or as real time as possible. You get to decide the how, what, and when of the reporting you’re seeing. And that’s ALL of the how, what, and when’s. If you want to see breakouts of all of the individual campaigns in your system, done. If you want broad scope comparisons of all of the campaigns in the last year, done. If you want to see CTR’s for specific audiences and compare them to CPM for your best performing advertiser but limit the scope to campaigns greater than 30k, done. All of this is at your fingertips with the AdReady Dashboard, all in one place.

Jessica Cortapasso

With more than a decade of experience in human capital management, Jessica Cortapasso serves as VP of Human Resources at Digital Remedy. After graduating from Muhlenberg College, she quickly recognized her passion for people and entered the workforce in Human Resources where she gained expertise in employee relations, designing strategic benefit plans, and the development, implementation, and curation of corporate engagement initiatives for big-name brands and small companies alike. Becoming a member of the Digital Remedy family in 2013 while simultaneously acquiring her Masters Degree in Human Resources Management and Development from New York University, Jessica has steered company culture through significant events ranging from acquisitions and a rebranding, to the development and application of our Core Values that shape our daily business practices. Cortapasso resides in Brooklyn, plays competitive volleyball, and loves spending time with her nieces.

Erez Feld

Responsible for the financial and legal practices of Digital Remedy, Erez brings 22 years of experience in precision financial analysis, growth management practices, strategic acquisition, and investment leadership. A graduate of Hofstra University, Erez began his career modeling for corporate finance, and expanded his accounting prowess in the real estate sector. Erez joined Digital Remedy in 2008 as a senior accountant, and helped to create and build an accounting department that could support the rapid growth of the company and aligned with those needs. Over the past 12 years he has evolved through various positions at the company within the finance discipline, supervising and mentoring additional finance personnel, while growing under the tutelage of Michael Fleischman, former CFO of Digital Remedy. Today, he leads the Finance Department by supporting high-level projects such as acquisitions and restructuring, and is responsible for overseeing all financial assets, establishing financial procedures, controls, and reporting systems.

Michael Fleischman

After a successful career as an accomplished Fortune 500 financial professional leading Corporate Finance and Strategic Planning at Cablevision Systems Corporation and its programming subsidiary Rainbow Media Holdings, Michael currently plays a role in the overall management of Digital Remedy including direct responsibility for all financial-related activities including accounting, financial planning, M&A, legal, insurance, real estate and banking relationships. Michael brings more than 25 years of media experience at Cablevision and Rainbow Media and during his career was instrumental in the launching and managing of a number of cable television networks including 10 Regional Sports Networks across the US, American Movie Classics, Bravo, and the Independent film channel as well as the structuring of corporate partnerships with companies including Liberty Media, NBC, Fox/NewsCorp and MGM. Additionally, he was the finance lead on a number of professional sports team acquisitions including Madison Square Garden, the successful IPO of Cablevision and a tracking stock at Rainbow Media.Michael was involved in the creation and launch of Rainbow Advertising Sales which was one of the Cable Industry’s first Local Advertising Sales Divisions.

2020 Industry Trends Newsletter

2020 Industry Trends Newsletter

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