Five ways brick and mortars can compete

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Bondi Junction Shopping Mall © by Charlie Brewer (2005)

Recently, I received a nice postcard from a friend who was explicitly trying to prop up her favorite dying U.S. agency — a beautiful, thought though likely futile effort. It made me wonder about the future of businesses that primarily operate offline.

The Internet, through the spread of email, has permanently disrupted the main business of the U.S. Postal Service, and the uptick in shipping packages to homes from e-tailers hasn’t quite made up for the lost business. That fact surprises me as I consider my last Black Friday experience seeing many retail spaces remaining empty, big box stores appearing desperate, and online stores doing better than ever. The future of retail feels like it will be largely online with offline delivery for anything that doesn’t have to be consumed or used immediately. Such a future feels a little bleak when you try to imagine all the empty street windows.

That said, I don’t think that could really come to pass since some equilibrium will be reached. I have started to wonder what would keep retail spaces filled and bustling with business. I’ve come up with five ways this would be possible:

  1. Experience-based retailing. I believe either offline retailers are going to have to be like Walmart or be like Apple in the future. They won’t be able to charge a 20-50 percent markup on a pure commodity shopping experience; instead they must produce an amazing retailing experience or they must simply have cheaper prices than the Internet has to offer.
  2. Pop-up retailing. Internet companies have already begun this season to create pop up stores in cheap, empty retail spaces. These pop up stores enable online stores to have a real-world face.
  3. Online sales tax. Federal enactment of such a tax would remove the uneven playing field that sites like Amazon enjoy right now. This would certainly help make offline prices more comparable to online prices.
  4. Better online-to-offline advertising. If there was a way to use the Internet to better market and direct customers to offline locations, then bricks and mortars would have a chance. Right now, most online advertising focuses on online-to-online conversions (something I’m trying to change through PaperG).
  5. Advertising retailing. It’s possible that retail spaces will get so cheap that they become effectively three-dimensional advertising spaces. Brands can rent out the space and fill it with their goods supplemented with representatives to answer questions.

Some or all of these will likely to come true. I hope so because I would hate to live in a world of empty windows.

Victor Wong is the CEO and co-founder of PaperG, a local online advertising technology company. PaperG powers the online advertising of 10,000+ local businesses and partners with leading online publishers including AOL Patch, Hearst, The Boston Globe, and more to better monetize their sites by capturing untapped ad revenue in the local markets they serve.

The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. The YEC leads  #FixYoungAmerica, a solutions-based movement that aims to end youth unemployment and put young Americans back to work.

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