Brick-and-mortar stores remain king amidst digital shift

Still, these brands should boost their online presence amidst the digital revolution.

E-commerce giants like Amazon and Alibaba continue to invest in physical stores, which remain crucial to the retail ecosystem in the age of digital transformation.

“One is the unique customer experience that online can’t exactly replicate,” Shaakir Siraj, managing director at Kuala Lumpur-based Tri Shaas Sdn Bhd, which operates Mydin Mart, told this year’s Retail Asia 2024 Summit in Singapore when asked about why brick-and-mortar stores remain king.

“To capture interest, you need to engage the senses,” he said. “Whilst online shopping can offer sight and sound, it cannot provide the same experience of walking into a grocery store and smelling freshly baked bread.”

Global brick-and-mortar store revenue is expected to hit $21.8t this year — nearly three times that of online retail, according to German data platform Statista. It is projected to hit $25.1t by 2028.

Siraj noted that while online platforms offer convenience, being in an actual store allows customers to buy and use a product right away. “There’s immediate gratification.”

These stores also provide a more personal connection. “Social media has tapped into this need by allowing people to connect without speaking.”

“However, believe it or not, humans like interactions. Brick-and-mortar stores capture both the verbal and nonverbal cues of customers who walk in,” he added.

Siraj, who has been managing director since 2012, noted how one of their mini-markets has become a regular place for the elderly. “We started with a small number, but due to word of mouth, the number of visitors grew, and we began to cater to more of them at that store.”

He noted that whilst some would argue that brand visibility might be better online, e-commerce sites could be overwhelming, making it difficult to get noticed. Algorithms may also lead to brands appearing on the pages of unrelated industries.

“Brick-and-mortar stores offer you the chance to control the story and narrative of your brand,” Siraj said. “You can also connect with partners who share your values.”

“This is why many brands still set up exhibitions, booths, and roadshows — they help communicate what your business stands for.” Still, these brands should strengthen their online presence and evolve amidst the “digital revolution,” Siraj said.

He said building an online presence involves developing apps and tools for better customer engagement. “I’ve seen brands where their physical stores are beautifully designed. Meanwhile, their website is nothing more than a basic landing page with minimal information.”

He said brands often resist going digital because they fail to recognise its value. “Legacy businesses feel it’s just for information’s sake, which spoils the brand image.”

Siraj said artificial intelligence and new technologies could help businesses become more efficient. “Chatbots, for instance, can handle level-one queries quickly, giving people the information they need. This allows human staff to focus on more personalised and complex interactions,” he added.