Brick and Click Missing the Boat

In their new book The Human Brand, Chris Malone and Susan T. Fisk report on a study showing that top retailers who also offer e-commerce, including Walmart, show a surprising pattern when it comes to brick and click shoppers. The people who shop online with these major retailers are the ones who feel most loyalty to the retailer’s physical stores.

That is, it’s not online shoppers who choose to shop at — it’s Walmart shoppers branching out. While e-commerce companies like Amazon are able to gain customer loyalty without physical locations, major IRL retailers see traffic going only from the physical store to the e-commerce store, not the other way around.

For these retailers, online shopping is a convenience for their current customers, not a way to compete with the legions of online merchants. It’s not a way to bring people into their stores, either.

Does this mean that brick and mortar stores are still the most important part of retailing and e-commerce is a flash in the pan — or that brick and click retailers are, as Malone and Fisk suggest, doing a bad job online?

Deloitte recently reported that CPG companies are missing out on e-commerce opportunities. Their study checked how aware CPG leaders were of consumer feelings about shopping in brick and mortar stores and online. The methodology was simple: Deloitte surveyed thousands of consumers and then checked in with executives to see how well they could predict the consumers’ answers — sort of like a retail Newlywed Game. 

The executives’ estimations were wildly off base on all these metrics:

  • number of consumers planning to buy groceries and personal care products online
  • number of consumers who dislike shopping in grocery and discount stores
  • factors other than time that caused consumers to dislike IRL shopping for CPG products
  • number of consumers who were “indifferent” about shopping in physical stores rather than online
  • number of consumers who buy products for the first time online
  • importance to consumers of in-home delivery

The executives surveyed were aware of the value of online marketing in driving brand awareness and repeat purchases of their products, but they were largely stuck in their belief that brick and mortar is where it’s at.

What’s more, even though 92% of the executives were aware that e-commerce is an important sales channel, fewer than half their companies had any clear plan for getting in on it.

CPG companies often rely on mass market retailers to set the bar. If consumers are bypassing big box retailers in their online shopping — unless they already feel loyalty to the physical store — then CPG companies who rely on those retailers for their information and worldview are relying on bad data.

How’s your company doing? Consumers expect their online purchases to triple in the coming years (the executives in the study predicted a 35% increase). More than half of them report that they dislike grocery shopping. 84% love home delivery. Most CPG executives in the study were not prepared. Are you going to be one of the companies that misses the boat?






6 responses to “Brick and Click Missing the Boat”

  1. Jonathan Nunez Avatar
    Jonathan Nunez

    For me it’s simple; I will bypass a brick and mortar in favor of Amazon or eBay because there is more competition on those sites and thus I can get better deals. Wal-Mart may be the home of low prices, but It can’t compete with some dude on the internet trying to sell his used iPad on the cheap and in a hurry.

    1. Jonathan Nunez Avatar
      Jonathan Nunez

      And that is just looking at electronics (something they already dominate), but what happens next year when Amazon launches next year?

      1. Jonathan Nunez Avatar
        Jonathan Nunez

        edit: Pantry

      2. Rebecca Haden Avatar
        Rebecca Haden

        I’m already an Amazon grocery shopper, so I’ll definitely be using Pantry (if and when…) Check out what they’re already doing through Quidsi, too —,, etc. Next day delivery on a lot of CPG products.

    2. Rebecca Haden Avatar
      Rebecca Haden

      For sure — and Amazon’s prices are usually lower than Walmart’s on the same item, according to folks who chart that kind of thing. But it’s not always just about price, right?

      1. Jonathan Nunez Avatar
        Jonathan Nunez

        Agreed. It’s not always about price. Like you mentioned in your post, sometimes it comes down to loyalty. And sometimes loyalty not to a brand but to a set of values. If a store contradicts my principals then I can’t pledge loyalty to them can I?

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