Marcus Brendl, Division Manager Hardware

It is common knowledge that more and more people are buying their products on the internet. Now, however, it has reached the stage that more and more bricks-and-mortar stores are having to close. Even the German Association of Towns and Municipalities is now warning against the demise of town centres. 

BRICKS-AND-MORTAR RETAIL UNDER PRESSURE

“Thanks to the boom in online trade, up to 50,000 stores in the town centres are in danger” states the managing director of the Association, Gerd Landsberg. “Empty shop windows in our town centres lead to a downwards spiral, the town centres become less attractive” he explained. The Association is not the only one to express warnings of this nature.

The Association of German Retail (Handelsverbands Deutschland, HDE) and the Cologne-based Retail Research Institute IFH are also sounding the alarm. According to the managing director of the HDE, Stefan Genth: “It is predominantly small and medium-sized retailers who are increasingly feeling the pressure. By 2020, up to 50,000 premises could disappear from the market as a result of structural change.” The IFH came to the conclusion in a study already published in August that almost one in ten bricks-and mortar retail stores would be threatened with closure by 2020. This would be equivalent to approximately 45,000 stores. 

CONNECTED STORES PROTECTS RETAILERS FROM CLOSURE

We have developed our cross-channel concept of the connected store in order to give bricks-and-mortar retailers a helping hand in view of this precarious situation. Our kiosk technology connects online to offline trade, helping bricks-and-mortar retailers continue to have a future. In their local store, they can display 200,000 products thanks to the kiosk (including products from the long tail range) and provide customers with expert advice.

Customers can order products directly in store and arrange to have them delivered directly to their home or to the store for collection. The online kiosk, which is part of the concept and is the retailer’s online shop on the internet, allows customers to select and order items at the weekend or public holidays as well. Retailers can therefore act as “Local Heros”, using all their options at their disposal - whether online with their online shop or offline with the kiosk and competent expert advice in store - to create a position on the market for themselves, taking the competitive advantage away from the online pure players. 

The connected store helps bricks-and-mortar retailers become “local heroes”.

OPPORTUNITIES FOR LOCAL STORES

The fact that bricks-and-mortar retail does still have opportunities is also shown by a current survey commissioned by the management consulting company Porsche Consulting from the market research institute Forsa. According to this survey, every second consumer thinks it is important to be able to try goods on or test them before purchase. “This is a clear vote in favour of the local retailer” according to the Porsche Consulting expert David Blecher. 

Approximately 85 percent of Germans also appreciate personal advice when they are planning larger purchases such as furniture, a computer or electronics goods for more than 500 euros. According to the survey, eight out of every ten customers were also prepared to pay a little more for this service. Good service begins long before the actual purchase: Approximately 85 percent of Germans also appreciate personal advice when they are planning larger purchases such as furniture, a computer or electronics goods for more than 500 euros. 

What is most important for customers: Personal advice in store or at home. Source: “Graphs: Porsche Consulting".

After the purchase is also before the purchase, as HOW advice is given is important for customers: 74 percent predominantly want specific answers to their specific questions and 58 percent find it easier to decide on a purchase if they are also offered the option of having individual requirements met. Eight out of ten customers would even be prepared to pay more money for a particularly good consultation. With a price of 500 euros, most would accept 20 euros or even more for receiving customer-friendly information from the manufacturer or the retailer. 

SERVICE AS A UNIQUE FEATURE

Once a purchase has been completed, good suppliers have an opportunity to score even further according to the survey by turning new customers into regular customers, if they provide the right service: 81 percent of those asked aged 25 and above would like a designated contact person for warranty issues. If manufacturers or retailers do everything right before and after the purchase, then the chances are that the customer will recommend them to others. “The results of our survey reveal that customers punish indifference after the purchase is made more than anything else.

There are so many openings retailers and manufacturers can use to gain customer loyalty in the long term. It doesn’t even have to cost a lot of money. The best advertising is to listen attentively and provide customers with the service they need. A long relationship can be created as result, benefitting both sides” says Blecher.

SERVICE CARDS AS A FACTOR FOR SUCCESS

We recognized this early on through our own personal experience and discussions with our retailers, inventing and developing our physical service cards as a result. These make the value of services such as installing apps, transferring data or repairing mobile phones tangible and transparent. 

Local retailers can use service cards to deliberately mention service and services to customers in store.

If they are to be used successfully it is crucial that services are actively offered, and that a conscious effort is made to mention them to customers. Physical service cards itemise services individually, letting end customers see the monetary value or added value of each specific service straightaway. This allows retailers to stand out from pure online players, who are hardly in a position to offer service and advice directly in store.