Jerry Storch: Bricks and Mortar Stores Not Dead

For those who believe that ecommerce will be the downfall of the bricks-and-mortar store, you better think again, according to Toys R Us Chairman and CEO Jerry Storch.

Follow US!

Multichannel Merchant
Multichannel Merchant
Multichannel Merchant
O+F Operations and Fulfillment

Check out
Multichannel Merchant’s Facebook page for more videos and original content.

In his keynote address at the National Retail Federation’s Summit in Denver, Storch debunked the myth that Internet shopping means the demise of the brick and mortar store due to the fact that traditional retail stores just don’t make a lot of money.

“Today is a call to action to take back our manifest destiny. Retail is not dead,” Storch said during his. “Stores make money and they make a lot of money.”

If you close a traditional store in order to focus more on that ecommerce site, you are closing your doors on a core audience of brick-and-mortar shoppers, Storch said.

“While there has been much focus on online only shopping, and our own ecommerce sites have grown to a $1 billion business, the reality is that the vast majority of sales will still occur in physical stores,” Storch said.

Shipping is expensive
While shopping online is convenient, it is actually cheaper to do it in store. Ecommerce shipping, or as he called it, “Direct to Home”, is much more expensive than retail stores. In fact, Storch said, the pick and pack costs that a direct-to-home ecommerce company has to endure are nearly 2% higher than a brick-and-mortar store.

For those shipping freight, Storch said, it is 30%-40% more expensive than fulfilling that order in an actual store.

Don’t expect free shipping to automatically boost sales either, Storch cautioned, “Somehow, somewhere and someday” that shipping bill has to paid and it will be at the cost of the ecommerce company.

Bricks-and- mortar experience
The experience inside a store just like Toys R Us trumps the environment of shopping online. “Stores have the advantage and they have the store experience,” Storch said.

Bricks-and-mortar stores are local; it offers the customer a sense of immediacy and can boost that beloved impulse buy. The traditional retailer store can give customers something etailers never can: the ability to actually touch, look and test out a product before it’s purchased.

In order to be a thriving brand in general, Storch said, you will have to offer the best products and services across all channels.

In fact, he said, the future of successful retail cannot just be about the power of the web, instead, retailers need to focus on integrating stores, internet, mobiles and social components together.

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.