How Omni-Channel Retail Increases Efficiency

LOS ANGELES—Smart retailers are realizing that  consumers do their research online before entering the store, so they're tweaking their digital and physical sales processes to provide a more efficient experience for both the retailer and the consumer, Matthews Retail Group's Chairman and CEO Kyle Matthews tells GlobeSt.com. We spoke with Matthews exclusively about brick-and-mortar leasing trends as well as creative ways retailers are using omni-channel retailing to increase sales.

GlobeSt.com: How do you explain increased brick-and-mortar leasing at a time when so many retailers are scaling back their physical stores?

Matthews: You have an improving economy, cheap debt and an overall lack of new development coming out of the recession. All of these factors serve to increase retailers' brick-and-mortar presence. Retailers are reinventing themselves in omni-channel retailing. Also, available large big-box space is being taken up by retailers serving specific demographic groups.

GlobeSt.com: How do the elements of omni-channel retailing work in concert to create increased sales for retailers?

Matthews: MIT came out with a report about a year ago called “Beyond the Checkout Cart.” It examined what was shaping brick-and-mortar stores and Internet sales. Today's consumers expect everything to be available at their fingertips, and the report said some 80% of consumers check prices online while accessing a mobile device in store. It allows the customers to approach their shopping experience from multiple angles, which is what they want. Shoppers want to be able to identify what they want via the web, often before they go into a store.

Retailers have to have a digital presence; it allows them to prequalify the purchase. Consumers think, “I've figured out what I want to buy and the specific brand.” Prequalifying the purchase increases the probability of the sale in a brick-and-mortar store. It makes the customer feel confident about making the purchase inside the store since they've done their due diligence. It provides the shopping efficiency that many shoppers are looking for.

GlobeSt.com: What are some creative ways retailers are using omni-channel retailing to increase sales?

Matthews: One is using coupons in-store that are only available on the store's website or on a smartphone app. But the biggest two are price-matching and prequalifying. My recent experience was going to Best Buy looking for a TV for my family room. I had the size and brand picked out before I even walked into the store. Ten years ago, you walked into an electronics store and looked at brands, and you needed a tech person to tell you all about the different features of each model. Today, most people have already done that online. But we don't have time to go to three or four different electronics stores to find the best price, so price-matching does that for us. Price-matching has allowed us to be incredibly efficient in finding the best price while still going to the store that's most convenient for us. The consumer feels exponentially better about the purchasing experience when the lowest price is guaranteed. It creates a comfort level that we're not overpaying. Additionally, since price matching makes having the lowest price less of an advantage, retailers can focus on winning through customer experience, customer service and store brand loyalty. Omni-channel retailing is all about efficiency shopping for buyers and efficiency selling for retailers. 

GlobeSt.com: What else should our readers know about the overall retail leasing market?

Matthews: The market is strong. Some people hear about Sears or OfficeMax downsizing, and they have concerns, but overall retail sales have increased and there's a strong leasing market where vacancies are going down. This has been unlike other historical recessions in that we haven't seen the wave of new retail construction space coming online that typically accompanies a rebound. As new tenants come into the fold, they don't have tons of new space to choose from, so they're backfilling vacant space. That's why we're seeing the national vacancy rate falling in concert with the cheap debt available to borrowers.