Online retailers open brick and mortar stores

KUALA LUMPUR: While many traditional retail stores have embraced technology by having an online presence, online retailers are now opening physical stores (mainly concept stores) in Malaysia, in line with global trends, to gauge feedback on products.
Retail consulting firm Retail Group Malaysia (RGM) managing director Tan Hai Hsin (pix) said there are still many customers who want to see, feel and touch the products before they decide to buy.
"They cannot do this online. Customers do not want the hassle of returning products and re-ordering again. To meet this need, online retailers open physical stores," he told SunBiz.
"Also, you can get better feedback on your products and services when you interact with your customers face-to-face. It is easy to give feedback online, but it tends to be short and not comprehensive," he added.
Tan said this is not just a trend in Malaysia, but also around the world, with the trend becoming common in the US, the most matured market for online retail.
Online fashion retailers that have opened physical stores in Malaysia include Christy Ng (five stores), FashionValet (four stores), Bawal Aidijuma (22 stores), Poplook (three stores), Imaan Boutique (six stores), Reebonz (one store) and Finelycup (one store).
Online foods & beverage retailers that have physical presence here include Fatbaby ice cream (one store), Foodmarket (one store) and Epic Fit Meals Co (three stores).
Other online retailers that have joined the bandwagon include online grocery store Redtick (three supermarkets), electronics company Xiaomi (five Mi stores) and online jewellery store Jeoel (four stores).
Tan pointed out that the main difference between (stores of) brick-and-mortar retailers and online retailers is that customers can order online while they are in the physical stores of online retailers.

"Some customers may like a fashion item but the colour is not available in store but online.
"They can order online immediately after they have inspected the product. Some customers do not want to carry the products with them after payment as they still want to walk around and visit other places. Some are buying the products for others and instead of carrying the items themselves, they can arrange for it to be delivered directly to the recipients," Tan explained.
In terms of locations, he said online retailers open their physical stores anywhere, with some choosing quality shopping malls to build their brand image. Some choose to open in shoplots that can be used as their office, distribution centre, central kitchen and/or storeroom. Some opt to open in locations where most of their customers are residing. Some select locations near their homes.
"For traditional brick-and-mortar stores, the opening of physical stores by online retailers is seen as new competition to them. If they (brick-and-mortar retailers) do not offer e-commerce facility to their existing customers, they will be left out in the near future," Tan said.
Online retailers are setting up physical stores in shopping malls, but the number is still relatively low, he noted.
"Retail trends change over time. Retailers need to change with time. Or else, they will be phased out."
Just like grocery trade in the last 50 years, Tan said it all started with provision shop, then evolving to mini-market, supermarket, overseas supermarket, foreign hypermarket, gourmet food hall, to today's online grocery store.
He pointed out that e-commerce would not be replacing physical stores anytime in the near future. In recent years, both sides of the retailing formats crosses over each other's territory and this trend will continue.
"The future of retailers should be multi-channel. A retailer is no longer able to operate solely based on physical store, they need to sell their products via other channels as well. Thus, winning retailers are those who are able to offer not only physical stores, but also online shopping sites," said Tan.