Brick-and-mortar stores fight to survive as some embrace online shopping

Amazon settled into a building and opened doors to Commonwealth Avenue in August 2017 to provide customers with a location to pick up orders and make returns. Situated on Boston University’s West Campus, the giant online commerce company moved into a store as many big department and other brick-and-mortar stores are closing doors as they face financial instability.

Sears, once America’s largest retailer and employer, filed for bankruptcy earlier this month. The household retailer has closed hundreds of stores in the last decade.

However, the company’s fall was foreshadowed for several years. In July, it closed its last store in Chicago, its hometown. Sears’ downfall follows a wider trend, with 2017 giving way to more major retail bankruptcies than 2008, when the U.S. economy was in the midst of a recession.

Rachel Nierengarten, a freshman in Questrom School of Business, said the shift comes as no surprise to her as a younger consumer and that the convenience of online shopping outweighs the benefits of going to brick-and-mortar stores.

“A lot of stores like Sears that sell the majority of their items in-store and don’t excel in online sales will experience the same thing, especially with Amazon and other online delivery services growing,” Nierengarten said.

Nierengarten said she believes younger generations have been at the forefront of online retail since its origin, and the market is only increasing for digital retailers as the years go on.

But brick-and-mortar stores are not completely replaceable by online options, as reported by Forbes article, and successful retailers have been embracing the shift toward the online shopping experience rather than continuing to put efforts toward brick-and-mortar sales.

Home Depot, for example, has recently targeted the in-store use of its mobile app. With the app, customers can have their phones out to look up product information in the store or use the “toolbox” for measurement conversions.

Monic Sun, a professor of marketing at Questrom, said she sees this cooperation between physical and digital sales as the next step for retail innovation.

“If you look at how Whole Foods has partnered with Amazon, you can see how they are starting to be used as a distribution channel, and instead of online and offline platforms being competitive, I can actually see them working together,” Sun said.

Sun explained that service-oriented sellers, such as restaurants or hair salons, are not going anywhere, but that physical retailers like Sears are much more likely to be replaced. Some physical stores, however, such as grocery stores, are less subject to extinction.

“Groceries defer from other products in the sense that timing is really critical and distribution is very time-sensitive,” Sun said. “You can see grocery stores almost as distribution channels as opposed to regular stores that are more sales outlets.”

Pnina Feldman, a professor of operations and technology management in Questrom, expressed similar expectations for brick-and-mortar shops. She pointed out that while the online and offline industries affect each other, they do not define each other.

“The definition of what a brick-and-mortar store is may change given the big online presence, but I think they will survive,” Feldman said.

Companies such as Amazon could be causing the fall of brick-and-mortar retail, but Feldman said it is a likely a combination of online competition and stores’ failure to keep up with modern innovation, and several companies with roots in brick-and-mortar strategies have shifted gears to adapt to technology and have thrived.

“To be successful, only companies that can innovate and think about new ways to do business can actually survive,” Feldman said.