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Foundation for success: Restoring and leveraging the physical store’s competitive advantage


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Before the advent of ecommerce, the real estate industry’s mantra of “location, location, location” held particular relevance for retailers, who leveraged a store’s “convenient location” as a competitive differentiator. As consumers have increasingly embraced the benefits of online shopping – 24-hour access, an unlimited array of products and compelling prices – convenience has become commoditized.

Retail real estate that once was an asset is becoming a liability, with significant risk of further decline. Some big box retailers, particularly those in segments with little product differentiation, have been among the first to feel the fallout: In the past few years, Circuit City, Borders and CompUSA have gone bankrupt. As traditional retailers view the exponential growth of online competition they may wonder: Are traditional brick-and-mortar stores doomed to become quaint, irrelevant relics; outflanked by the immediacy, economy and ubiquity of digital storefronts?

Deloitte proposes a different scenario: Physical stores are here to stay and they are more important than ever in their ability to connect the customer to the product and deliver the full brand experience. However, retailers must reconsider how to most effectively use their store footprint to regain omni-channel competitiveness and restore financial performance.

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