Aurora Magazine

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Bricks-and-Mortar in 2021

Updated 13 Sep, 2021 11:36am
Was moving online a solid move for retailers post Covid-19?

The term ‘bricks-and-mortar' refers to a traditional street business offering products and services to customers face-to-face in an office or a store that the business owns or rents. The local grocery store or bank are examples of bricks-and-mortar companies. The last year saw significant changes in the fortunes of such businesses as Covid-19 accelerated digital adoption.

The increasing use of technology to work, play and stay connected during the pandemic shaped new digital habits and intensified existing ones. As a result, most businesses have gone online in some capacity. As for those that did not adapt to online and somehow still survived… well they are not dead yet. Right?

Not exactly…

Although “online or dead!” is the popular mantra of the moment, this notion is flawed. In fact, many businesses that did move online ended up shutting down, while many that did not, are still surviving, if not thriving. And I don’t know if you heard, but the world’s largest online business adapted to become an offline business as well. Yes, I am talking about Amazon… the world's largest e-commerce company, which in the past few years has started to make its way into the world of bricks-and-mortar retail. Amazon acquired Whole Foods in a $13.4 billion deal, allowing Amazon to own 460 stores across Canada, the UK and the US almost overnight.

Every business needs to be online; there are no two ways about it. The key is getting the basics right - and I don’t mean the basics of e-commerce only; rather the basics of running a business. According to an article in Forbes: “Amazon sees that the future of retail is blended.” In my opinion, this has hit the nail on the head. Customers may have different preferences in terms of their online and offline purchases, but in reality when it comes to how they make the purchase, the majority do not exclusively shop online or exclusively in store. They marry the best of both worlds. So should the business.

After speaking to hundreds of business owners in the past few months, here is a list of top five reasons why businesses fail in Pakistan:

Cashflow Problems

Pakistan is a cash-based economy and as the lockdown started, many economic sectors were adversely affected. Raw materials were either not available or manufactured and the lack of transportation and storage facilities further hindered these businesses. Also, when commodities are not stocked there are no sales. The worst hit sectors were textiles in Pakistan and globally, tourism.

Lack of Growth

As the pandemic hit, a lot of commodities experienced minimum to low demand and people turned towards stocking their kitchens with basic necessities. Businesses, especially small and medium-sized enterprises, were affected because the supply chain came to a stop. The stores that populated the malls were directly affected.

Outcompeted by Bigger/International Players

Ever heard of someone shopping via a Facebook or WhatsApp group, ordering four beanies, four tracks suits along with matching shoes and accessories? Many international brands are available in Pakistan via these mediums and the value proposition is great; the quality is amazing, the colour and fit are perfect and exactly as shown in the picture and most of all, if it does not fit, it can be returned or exchanged, no questions asked. Now, these businesses are not even big but imagine competing for quality when it comes to electronics or consumer goods. The ticket price may be high but the buyer is not sceptical when ordering international brands.

Missing Out on the Right Team

A great team not only needs to have the right experience and leadership skills, it also needs cross-functional capabilities. The right team must include self-taught and self-motivated individuals willing to learn, unlearn and re-learn until they get it right.

Digital Failure: Video and music stores have gone out of business because they failed to adapt to the digital transformation. When the lockdown started, big stores like Agha’s and Ebco went digital, taking orders through WhatsApp, but several kiryana stores went out of business because they were unable to take their business online.

When it comes to digital transformation, the majority of companies fail not only because they lack the experience to go digital, but because they do not have a clear goal. They fail to launch their digital transformation with a purpose, as result their management and team are lost, customer needs are not kept in mind and competitors are not properly evaluated. Adding to this, sometimes the transformation is so fast that the various processes fail to work in harmony. Digital organisation is essential and customers must be kept in mind and listened to.

As consumers continue to move towards online purchasing, the environment for the brick and mortar retailers is becoming more challenging by the day. The trick is find the balance between online and offline. Jomo, a fashion store is a perfect example of online and offline connect. The store allows customers to order shoes online and at the time of delivery brings additional sizes in order to ensure a perfect fit.

Mehwish Aslam is Project Manager,