Why online retailers are getting physical

For years in retail, the story has been about brick-and-mortar retailers losing business to pure-play online retailers, which can offer the same product for less due to lower overhead costs.

Now, however, it seems that e-tailers are awakening to the advantages that having a physical presence can afford, such as instant gratification for the consumer and, for the retailer, the chance to get to know their customers.

On July 4, The New York Times published a story online illustrating how brick-and-mortar stores, including Walmart, Macy’s and Sears, are attempting to stave off competition from e-tailers such as Amazon by adding in-store pickups and returns, payments booths and even drive-through customer service centers for customers who buy merchandise from their websites but want it immediately.

In the last three paragraphs, the author examines the other side of the equation, what online-only retailers are doing to counter these moves by brick-and-mortar competitors.

Interestingly, the article mentions that Blue Nile is now shipping to physical locations as part of its affiliation with online network ShopRunner. Consumers pay a yearly fee to belong to ShopRunner in order to receive free shipping and special offers from the network’s member brands and retailers. (Blue Nile didn’t respond to request for comment on this, but, according to the Times, they are shipping to locations that also are ShopRunner members. Feel free to hazard a guess as to where they might ship by looking at ShopRunner’s complete list of participating stores.)

The article goes on to make a bold prediction: online-only retailers will begin opening stores.

The day after the Times story ran, I spotted this article about Groupon opening a concept store in Singapore. There, customers of the geo-centric deals site can instantly pick up physical goods purchased via Groupon, exchange merchandise or submit it for repair and/or try products and ask questions.

It’s also, according to the story, a way for the company to get to know its customers.

In addition, online retailer Whiteflash Inc. just announced it is opening a showroom in Sugar Land, Texas in order to “better serve this significant market,” the company said.

What’s next, Blue Nile reaching out to a regional mail chain to open a shop-in-shop, or an Amazon store? These days, neither seems out of the realm of possibility.