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If we're living through a “retail apocalypse,” why are e-commerce leaders like Amazon, Alibaba, and JD.com so focused on building brick-and-mortar stores? (AMZN, BABA, JD)

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence,  click here. Current subscribers can read the report  here

If we're living through a “retail apocalypse” that spells doom for brick-and-mortar retail, as many have suggested, why are e-commerce leaders like Amazon, Alibaba, and JD.com so focused on building their own brick-and-mortar networks?

US Consumers Who Made an Impulse Buy Due to Personalization in the Past 90 Days

It's because they want to revitalize physical stores by introducing features associated with online shopping like personalization — and a whopping 65% of consumers said personalization and promotions are most important to their shopping experiences, according to a report from Oracle cited by Chain Store Age.

Brick-and-mortar retailers have the opportunity to reap the same benefits of personalization that e-tailers do, like repeat visits and impulse purchases, but they need to invest in the right technologies and techniques to do so because they currently don’t meet shoppers’ expectations. For example, 41% of consumers expect sales associates to know about their previous purchases, but just 19% have experienced this, according to a report from Segment.

In this report, Business Insider Intelligence analyzes how physical retail’s personalization is being outperformed by e-commerce’s, and examines the value personalization holds for brick-and-mortar in particular. We also look at what techniques and technologies are available to help retailers identify and track consumers in-store, and how they can be used to bolster their personalization capabilities. Finally, we examine the different channels through which retailers can reach consumers with their personalized offerings in-store.

The companies mentioned in this report are: Amazon, Alibaba, JD.com, Intel, Mastercard, Target, Velocity Worldwide, RetailMeNot, b8ta, Nordstrom, Saks Fifth Avenue, Sitecore, Oak Labs, Calabrio, and Alegion.

Here are some of the key takeaways from the report:

  • Consumers say that a personalized shopping experience can inspire loyalty and increases in spending.
  • But brick-and-mortar retailers aren't meeting consumers’ in-store personalization expectations.
  • The nature of online shopping gives e-commerce the upper hand when it comes to personalization.
  • Physical retailers can close the gap in personalization by identifying consumers when they enter, tracking them throughout their journey, and then using that information to inform individualized offerings.
  • To make the most of personalized offerings, retailers must consider how content is being presented to consumers in-store, and what the strengths of each channel are.
  • If physical retailers fail to improve their in-store personalization, they risk losing sales and market share to e-commerce companies, both online and in-store.

In full, the report:

  • Identifies the values of personalization to physical retailers.
  • Details the reasons e-tailers currently offer better personalization than brick-and-mortar stores.
  • Outlines the technologies and processes that can bolster in-store personalization.
  • Discusses how retailers can best present personalized offerings in-store.

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