Sleeping with the Digital Enemy: Salvation for Brick-and-Mortar Shops?

While many brick-and-mortar consumption sites are going bankrupt (Radio Shack, Payless), dying (Sears), or are long gone (Circuit City, numerous dead malls [see deadmalls.com]), several late 2017 articles in the New York Times suggested that it is premature to sound the death knell for brick-and-mortar stores.

Some brick-and-mortar consumption sites, most notably fast food restaurants, are not dying. In fact, they will continue to exist, if not prosper, at least until the day when technology is advanced enough to deliver burgers and fries to our homes digitally (e.g., that can be produced on our 3-D printers, or by even more advanced technologies of the future).  Many other kinds of stores (e.g. supermarkets) will survive for many of the same reasons. Furthermore, still other brick-and-mortar stores will continue to exist if for no other reason than the fact that many people will continue to feel the need to get out of the house and away from their computers, at least some of the time. Since consumption is, for many people, their major form of recreation, this will undoubtedly lead them to updated brick-and-mortar shops, malls, amusement parks, and the like.

There are also hopeful, but contradictory, possibilities for other brick-and-mortar sites such as, making them smaller (more focused, more personal and intimate) or more multi-functional. However, there is general agreement on the need to make such sites more experiential (for example, malls that have fewer stores and more restaurants and movie theaters; showrooms offering more personalized services and an array of amenities such as manicures and a glass of wine). Beyond that, such sites can move beyond a focus on brick-and-mortar shops and, among other things, transform themselves into “event spaces, classrooms, community centers”. While there is some promise in these changes, they seem, at best, dim hopes. The chief executive of Oscar de la Renta is quoted as saying that brick-and-mortar stores are no longer necessarily advantageous and in the second-tier markets they might be considered “millstones”.

The main source of salvation for brick-and-mortar stores is said to be augmentation with that- digital consumption sites- which have been, are, and will continue to be the greatest threat to them. The major hope for many of the brick-and-mortar consumption sites that continue to exist is in synergistic relationships with digital sites. While this will keep some brick-and-mortar locales alive, they will clearly be subordinated to the digital and on life-support. Further, that which is keeping them alive, at least faintly, is the very digital force that has been killing them and will continue to be fatal to them in the future. Brick-and-mortar stores are eagerly climbing into bed with their mortal enemy. If the alliance with the digital world does not kill brick-and-mortar sites, it will reduce them to insignificant appendages to the digital.

Also not offering much hope to the brick-and-mortar world are the material sites Amazon has created (bookstores, convenience stores) or purchased (the Whole Foods chain of over 460 supermarkets). They are destined to be an infinitesimal part of Amazon’s total business. They may be useful for experimentation, the application of the massive amounts of data collected by Amazon.com, and for new bodies of data on consumers, but they are not going to contribute much to Amazon’s bottom line. On the other hand, Wal-Mart will gain much more by its move away from its massive number of brick-and-mortar stores and in the direction of becoming a greater presence in the digital world.